Exploring the Interplay between Business Regulation and ... · PDF fileExploring the Interplay between Business Regulation and ... RCPA: Retail Chemist Prescription Audit RDC: Raman

Exploring the Interplay between

Business Regulation and

Corporate Conduct in India

The BRCC Project

State Level Report on Status of

Business Responsibility in

Pharmaceutical Sector in Gujarat

Draft Report on Pharmaceutical Sector in Gujarat Under BRCC Project

RDC : CUTS: October 2012 Page 2 of 67

Index

Abbreviations 03

1. Executive Summary 04

2. Introduction 09

3. Methodology 11

3.1 What is responsible business

3.2 Research Questions, Data Collection and Analysis

4. Situation Analysis of the Sector in the State 17

4.1.1) Evolution of the Sector in the State especially enabling factors

4.1.2) Sectoral Collectives

4.1.3) Government Departments

4.1.4) Sectoral Regulatory Framework vis-à-vis Business Responsibility in the State

5. Results related to issues pertaining to environmental responsibilities in the Sector 44

6. Results related to issues pertaining to social and economic responsibilities of the Sector 60

7. Conclusions 74 8. Recommendations 76



Abbreviations

ASSOCHAM : Associated Chambers of Commerce and Industry of India

BRCC: Business Regulations and Corporate Conduct

CSR: Corporate Social Responsibility

CME Continuous Medical Education

CPCB: Central Pollution Control Board

CUTS Consumer Unity and Trust Society

CDSCO: Central Drug Standard Control Organization

CGoPDT: Controller General of Patent Design and Trademark

DoIP&Pr: Department of Industrial Policy and Promotions

DoP: Department of Pharmaceuticals

DTAB: Drug Technical Advisory Board

IDR: Industrial Development and Regulation Act, 1951

IDMA: Indian Drug Manufacturers’ Association

DoC&P: Department of Chemicals and Petrochemicals

DPCO: Drug Price Control Order

IPRs: Intellectual Property Rights

GCP: Good Clinical Practices

GDP: Gross Domestic Product

GIDC: Gujarat Industrial Development Corporation

GMP: Good Manufacturing Practices

GoI Government of India

GSMRA: Gujarat State Medical Representative Association

MoI&C: Ministry of Industry and Commerce

MoE&F: Ministry of Environment & Forest

MSR: Medical Sales Representative

MCI Medical Council of India

MR: Medical Representative

MoC&F: Ministry of Chemicals and Fertilizers

NABL: National Accreditation Board for Laboratory

NDPS: Narcotic Drug and Psychotropic Substances

NPPA: National Pharmaceutical Pricing Authority.

NVGs: National Voluntary Guidelines

RCPA: Retail Chemist Prescription Audit

RDC: Raman Development Consultants Pvt. Ltd.

RUD : Rational Use of Drug

SEIAA: State Environment Impact Assessment Authority

GPCB: Gujarat Pollution Control Board

UCPMP: Uniform Code for Pharmaceutical Marketing Practices

USD: United State Dollar



1. Executive Summary

India’s pharmaceutical industry looks set for a solid long-term growth. It already ranks fourteenth in

the global league table, with sales of almost US$19 billion in March 2009. It is estimated that it will

rise to approximately US$50 billion by 2020 – a 163% rise in the space of eleven years.

PriceWaterhouse Cooper in their report, Pharma 2020: The vision, anticipate that India will be one of

the industry’s top 10 markets by 2020. In such a promising scenario the growth of Pharmaceutical

sector is concentrated in different states of India including Gujarat where the industry is growing

very fast.

Pharmaceutical companies do pose environmental threats to human being and society as such.

Different steps from clinical research to proper disposal of outdated drugs – at each step there is

possibility of environmental hazards. There are many governing regulations in India for

pharmaceutical sector. However, socially responsible business and related conducts among

pharmaceutical firms play a major role.

Gujarat leads India in pharmaceuticals and enjoys the share between 35% and 46% of the national

share in pharmaceutical production over the last two decades. Ahmedabad and Vadodara are

leaders in the production of generics while Ankleshwar and Vapi produce much of India's bulk drugs.

The history of the pharmaceutical industry in Gujarat begins in 1907 when Alembic Chemical Works

Co. Ltd. was formed by taking over distilleries in Baroda (Vadodara) with a view to manufacturing

alcohol and tinctures primarily for pharmaceutical products.

To initiate discourse on the business regulations and corporate conduct in India, CUTS International

in collaboration with Raman Development Consultants Pvt. Ltd. (RDC) implemented a research

project to understand these dynamics. In line with that a study of 100 pharmaceutical firms were

contacted by RDC in Ahmedabad, Vadodara, Bharuch and Valsad cities of Gujarat state. The research

covered small, medium and large size pharmaceutical firms. The study is a facilitative questionnaire

based study. This report contents analysis of data collected by consultations with decision makers

and management staff of pharmaceutical companies. The study is conducted in three phases i.e.

phase I: study of pharma firms, study of medical representatives, phase II: study of associations

related to pharma sector and industry sector and phase III: study of government departments.

95 % respondents of pharma firms stated that they were aware of Good Manufacturing Practices’

(GMP) norms set under the Schedule M of the Drugs & Cosmetics Act, 1940 while 5 % were unaware

of it. Among this, the awareness level about GMP is little higher among medium and large firms as

compared to small firms. Though, being a regulatory requirement, this shows high level of

adherence to GMP. In Gujarat there are 460 units as per FDCA who have WHO GMP while 191 firms

have Gujarat state GMP certificate. The medium sized pharma firms seem more active as compared

to implementation of different elements than small and large size pharma firms as per pharma firms

as well as their association - IDMA.

Nealry one third (35.02 %) pharma respondents stated quality of product as a benefit due to GMP.

No significant difference in term of perception about benfits due to GMP was observed according to

the size of firms. Of the total pharma firms covered under the study, financial constraint is the main

difficulty for compliance to GMP as per 39.07% respondents and surprisingly it is almost same



irrespective of size of firms. On an average, 25 to 30% expect all support from state/ central

government i.e. financial support, keeping firms interest in mind while formulating regulations and

conducting awareness programs for firms on GMP.

In term of help expected from Pharmaceutical Associations, nearly half (44.76%) of the respondent of pharma firms believe that pharma association should have regular interactions with government regarding problems faced by firms on following GMP. The small sized pharma firms (66.67 % respondents) have a strong belief that non-compliance to GMP will not create more environmental hazards as compared to medium and large size firms. Gujarat Food & Drug Control Administration (FDCA) respondent accepts that pharmaceutical firms in the state have adverse environmental impacts. The FDCA respondent believes that issues pertaining to compliance by pharmaceutical firms (pertaining to manufacture, marketing and distribution) are better solved in the long run on the basis of consistent and better informed government regulations, strict enforcement of regulations, active role-play by the Pharma associations and self – regulation by firms themselves. 28% pharma respondents graded air pollution and hazardous waste due to pharma firms between 6 to 10 ranks1, while 38 % gave same rank to water pollution contribution by pharma firms. As per the IDMA representatives, the contribution of pharma industries to air, water and land pollution as well as health problems in the community is low. The department of environment respondent stated that surface water pollution is the main environment related problem due to the pharma sector in the state rather than air pollution, ground water pollution and land pollution (solid/hazardous water). 33.54 % respondents of pharma firms stated that their firm has inlcuded it in board room discussions to bring the environmental concern on the priority list. More than half (50%) respondents of pharma firms were not aware of actions taken by GPCB on any of the pharma firms on account of environmental impact. Of those who were aware of such actions 91.67 % firms find action of GPCB justifiable. To bring environmental concern on the priority list of pharma companies, the IDMA raises awareness of firms, interact with members and engages with government/GPCB. IDMA encourages member firms by framing regulation to initiate activities in the direction of minimizing the adverse effect on environment, interacts with GPCB for devising methods for minimizing impacts, and conducts awareness programs on different guidelines related to environmental concerns. 85% respondents stated that they did not receive any assistance from state/central government or association to set up an environment department in their firms. While 12 % respondent of pharma firms stated they they received some support from the Association for the same. Majority (72 %) of the respondents think that the implementation of regulatory laws should be done differently depending on the nature of the unit (formulation, bulk) and size of firms (large and SMEs). The same view is reflected by IDMA as well. In term of role of different stakeholders, FDCA respondent stated that that pharma firms need to have qualified staff; industrial association need to organize training and awareness programs; State Government need to play strong and regular role for enforcement of regulations, GPCB need to have strict control over the industry and civil society need to give continuous feedback to all stakeholders to design a proper roadmap to address the challenges in state.

1 Where 1 denotes least impact while 10 denotes maximum impact.



As per the GPCB representative, the environmental performance of the pharma sector in Gujarat is “fair” and the performance has changed towards “better” in last 10 years. GPCB does not have a separate bifurcation for show cause notices given to pharma companies as they maintain general figures. As per GPCB respondents the main enabling factors for firms motivation to undertake the good practices includes size/turnover of the firm, location of the firm, initiatives taken by pharma/industry collectives, approach of the environmental regulator towards pharma firms, initiatives by the CEO/Board Members and push from the consumers/community. The department of environment respondent shared that a State of Environment Report is not prepared for the entire state but the report is prepared for industrial clusters under CEPI. No report specifically for the pharma sector in the State was prepared. Of the firms surveyed, 60 % do not havea dedicated Environment Management Department in their firms but 80 % pharma firms have environmental infrastructure in place in their firms to reduce the negative environmental impacts of their firm. In term of budget for environment department, 14 % pharma respondents stated less than 10 lakh INR as budget, 3 % respondents stated 10 to 20 lakh as budget and 10 % respondents stated that they have budget between 20 lakh to 1 crore. While 12 % respondents were not aware of the budget for environment management and 59 respondents did not answer. Only 22 % of the pharma firms surveyed had a CSR policy in their firms. Out of these, 58.97 % respondents feel that CSR is necessary as it was felt by the proprietor/governing body of the company. Majority of the respondents of pharma firms (88%) were not aware of NVGs while 12 % were aware of it. The ASSOCHAM respondent was aware of NVGs and he heard about it from the ministry itself. The GSPCB and Department of Environment respondents were aware of NVGs, while the DoHFW respondent was not aware of the same. The respondent of Department of Environment opined that NVGs helps in better environmental management and addresses the issue more precisely. According to the respondents, the challenges in NVG implementation are lack of skilled manpower, financial constraints and environment is not on the priority agenda of the firms. The study covers approximate 37 % bulk drug manufacturing companies and 62 % in the business of formulating the drugs. One company did not respond about its marketing channel. 37 companies do not have any marketing and distribution channels as they are bulk drug manufacturers. Out of 60 % formulation companies none have their own marketing and distribution system. Only 32 companies have this type of system. The rest have a system of distributors’ channel called propaganda cum distribution, franchise system etc. They do not need to have MRs, they sell the medicines direct to distributors. So, marketing and distribution related responses came from only 32 % visited companies. The main strategy adopted for marketing and distribution of drugs in Gujarat as per around 52 % respondents is through Medical Representatives (MR) visiting doctors, chemists and hospitals. Highest number of pharma respondents (40.30 %) mentioned that area of specialization is the key criteria for selection of doctors. As per Gujarat State Medical Representative Association (GSMRA) respondent, usually MRs fix visits with doctors directly to identify themselves and it is part of marketing strategy of firms. While as per Medical Representatives, 71.42% reported fixed visit to doctors every week or month. 37.14% MRs respondents reported ‘Retail Chemist Prescription Audit’ method is used for identification of doctors. Majority of MR added that they have to attend the call at the specific place on demand from the doctors. 56.82 % respondents stated that their firm doesn’t sponsor any event (meeting, workshop, seminar, etc.) for the doctors among which the contribution of large firms is 72.73 %. While those



respondents who cited not sponsoring events, of them, 39.13 % stated that it as because their firms does not have such policy. The GSMRA respondent stated that the pharma firms have provisions for organizing events. Spread of information about firm’s product is the main benefit (38 % respondents) expected by sponsoring such events by firms. Nearly 34% pharma respondents accepted that doctors ask for gifts from MRs when they visit doctors while 56 % respondents did not answer the question at all. GSMRA respondents consented that doctors ask for gifts/incentives from MRs and these are distributed on regular basis and not on only some special occasion. While 85.7% MR respondents reported that doctors asked for gifts or incentives. 40% MR reported that gifts/incentives are distributed on regular basis by pharma firms. Half of the pharma respondents (50%) stated that expenses related to gifts and incentives are booked under promotion head, while as per GSMRA respondent such gifts are booked by pharma firm under “Gratification” head. MR has to fill the gratification form for doctor in the company. The ASSOCHAM and GSMRA representative were aware of Code of Medical Ethics Regulations but neither did they express satisfaction nor made any recommendation for amendments. 80% of MR responded that they were aware about Medical Code of Ethics. The DoHFW respondent was aware of Code of Medical Ethics Regulations. Only 9% pharma respondents stated that their firm took initiatives to comply medical ethics code. 56.25 % respondents of large firms, ASSOCHAM representative, representative of FDCA and 54.28% MR were aware about UCPMP, while representatives of GSMRA and DoHFW were not aware of the same. The main reason as per 31.43% respondents for indulging in unethical behavior by pharma firms is to survive in the sector. As per IDMA and ASSOCHAM, the factors responsible for “incentive regime” in pharmaceutical industry in Gujarat, are incentives by pharma firms and business strategy of private hospitals. While as per GSMRA representatives, “incentive regime” in pharma industry is contributed mainly by business strategy of pharma industry, commercial motivation of doctors, and weak regulatory framework. FDCA and respondent of DoHFW acknowledged that there are certain ethical concerns related to marketing and distribution chains of the pharmaceutical firms. FDCA agreed that some firms have been found indulging an in unethical way of promoting their products but did not mention any steps taken. Overall 67.65% pharma respondents did not answer about salary structure of pharma firms for MR, 24.51% respondents stated “fixed+based on target” as the main criteria which is also confirmed by the GSMRA representative. 71.42% MR respondents stated that they are paid on the basis of target achieved. Those from pharma firms who answered about salary structure, 24 % were not in favor of fixed salary. GSMRA representatives think “fix remuneration” would be a more stable option for MRs, while 57.14% MRs were in favor of fixed salary. 72 % respondents did not give any opinion on whether focus on sales target to assess performance of MR may result in unhealthy interaction with providers (doctors, hospitals) and only 5% pharma respondents think it is discussed in association meeting. While GSMRA respondent stated that they have taken steps like meeting with pharma association to raise the matter and also discussed the same with government bodies besides conducting awareness program for MRs.



2. Introduction

The importance of business in improving the quality of life is well recognized. However, there is

growing awareness that in an increasingly complex world, businesses also have significant and long-

lasting impacts on people, society and the environment. This calls for businesses being thoroughly

aware and conscious of their social, environmental and economic responsibilities, and balance these

different considerations in an ethical manner.

When businesses are supported by an appropriate Government policy regime that encourages

systematic movement towards responsible thinking, decision-making and a progressive movement

towards sustainability, the trajectory of overall growth and development takes a positive turn. Such

a responsible approach on part of the business should be duly supported by the Government, so that

businesses continue to make surpluses that can be re-invested for the growth of the economy.

Thus there is a need to initiate a discourse at the state and the national levels that can enable

regulatory instruments aimed at promoting economic growth to also facilitate responsible business.

In this backdrop, the Business Regulation and Corporate Conduct (BRCC) Project was conceptualized.

BRCC Project will thus delve into the interplays between business regulation and corporate conduct

and raise awareness thereof. It is being operationalized by undertaking research to comprehend

business regulations at the national, state and local levels, and find ways to best motivate corporate

entities to emerge as champions of responsible conduct.

The project has focused on research on pharmaceutical firms and on their impact on environment

and marketing and distribution practices towards responsible business.

Project Goal:

The project goal is to stimulate better business to achieve sustainable development objectives in

India

Project Objectives:

Address the regulatory and operational constraints faced by businesses in India.

Motivate firms to adopt ‘responsible’ corporate conduct.

Evolve a policy discourse between business community and policymakers to facilitate a policy environment that promotes business development in a sustainable manner.

Project geographic focus:

The project has been implemented in four Indian states, Gujarat, Himachal Pradesh, West Bengal

and Andhra Pradesh.

Gujarat continues to occupy a distinctive position in the Indian economy. With 5 percent of the

country’s population and 6 percent of the country’s geographical area, Gujarat contributes to about

16 percent of industrial production in India. The State has witnessed an annual average growth of 9

percent in the last three years (GDP is estimated at USD 38.4 billion) and an average industrial

growth of 15 percent for the same period. The state of Gujarat accounts for 40 percent of India’s

total pharmaceutical production and 17 percent of its exports. Gujarat’s pharma industry is valued at

USD 3.6 billion. There exist more than 3500 drug manufacturing units in Gujarat.

This report contains the finding of the reseach conducted on pharmaceutical firms in Gujarat by

Raman Development Consultant Pvt. Ltd. (RDC) team with the support of CUTS International.



3. Methodology

3.1 What is responsible business:

The Ministry of Corporate Affairs, Government of India had released Voluntary Guidelines on CSR in 2009 as the first step towards mainstreaming the concept of Business Responsibilities and further revised and published the same (National Voluntary Guidelines) in the year 2011. The Guidelines emphasize that businesses have to endeavor to become responsible actors in society, so that their every action leads to sustainable growth and economic development. Accordingly, the Guidelines use the terms Responsible Business' instead of Corporate Social Responsibility (CSR) as the term 'Responsible Business' encompasses the limited scope and understanding of term CSR.

The Guidelines are designed to be used by all businesses irrespective of size, sector or location and therefore touch on the fundamental aspects – the 'spirit' - of an enterprise. It is expected that all businesses in India, including multi-national companies that operate in the country would adhere to the Guidelines as they raise the bar in a manner that makes their value creating operations sustainable. All principles are equally important and non-divisible – this implies that if a business endeavors to function responsibly, it would have to adopt each of the nine (9) principles in their entirety rather than picking and choosing what might suit them. It urges businesses to embrace the “triple bottom-line” approach whereby its financial performance can be harmonized with the expectations of society, the environment and the many stakeholders it interfaces with in a sustainable manner. The reporting framework is designed on the 'Apply-or-Explain' principle, which is also the fundamental basis of these Guidelines.

Summary of 9 principles is as below:

Principle Focus

Ethics, Transparency and Accountability: Ethical conduct in all its functions and processes is the cornerstone of responsible business.

Goods and services that are safe and contribute to sustainability

All stages of the product life cycle, right from design to final disposal of the goods and services after use, have an impact on society and the environment.

Well being of employees Well being of all categories of employees engaged in activities contributing to businesses, within or outside of its boundaries and covers work performed by individuals, including sub-contracted and home based work.

Responsive towards stakeholders While appreciating that all stakeholders are not equally influential or aware, the principle encourages businesses to proactively engage with and respond to those that are disadvantaged, vulnerable and marginalized.

Respect and promote human rights: The principle recognizes that human rights are the codification and agreement of what it means to treat others with dignity and respect. This holistic and widely agreed nature of human rights offers a practical and legitimate



framework for business leaders seeking to manage risks, seize business opportunities and compete in a responsible fashion.

Environment: The principle encourages businesses to understand and be accountable for direct and indirect environmental impacts of their operations, products and services and strive to make them more beneficial.

Influence public and regulatory policy in a responsible manner

Businesses operate within the specified legislative and policy frameworks prescribed by the Government, which guide their growth and also provide for certain desirable restrictions and boundaries. The principle emphasizes that policy advocacy must expand public good rather than diminish it or make it available to a select few

Inclusive growth and equitable development Reiterates that business prosperity and inclusive growth and equitable development are interdependent.

Provide value to customers and consumers Recognizes that customers have the freedom of choice in the selection and use of goods and services, and enterprises would strive to make available goods that are safe, competitively priced, easy to use and safe to dispose of, for the benefit of customers.

CUTS International with Raman Development Consultatns Pvt. Ltd in Gujarat implements the project titled as Business Regulation and Corportate Conduct in Pharmaceutical and Private Health Sector. The project has defined Business regulation as “ Business regulation entails different regulatory instruments like policies, laws, rules, orders, procedures and praxis that influence how business operates in a particular setting and/or sector.”

The concept of corporate conduct i.e. business responsibility involves business being throroughly aware and conscious of their social, enviormental and economic responsibilities and balances these different considerations in an ethical manner. The corporate conduct can be seen through various facets such as

Corporate Social Responsibilities

Creating Shared Value

Corporate Governance

Business Responsibility

Sustainability in Reporting etc.

This research has tried to explore on business responsiblities in two sectors i.e. Pharmaceutical with specific focus on its environmental impact and marketing and distribution aspects.



3.2 Research Questions, Data Collection and Analysis

3.2.1 Research Questions:

The study was structured on two main factors of research questions: one dealing with environmental impact of pharmaceutical companies and the other marketing and distribution practices which fuel malpractices in pharmaceutical sector.

Following are the key research questions related to ENVIRONMENTAL ISSUES:

RESEARCH PROBLEM: What is the level of adverse environmental impact (especially in terms of pollution) from pharmaceutical companies in the state? Why have the available regulatory safeguards not worked in places where impacts were found to be significant? What should be done to make these regulations work so that there are no such adverse environmental impacts in future?

The second set of questions related to MARKETING & DISTRIBUTION practices in pharmaceutical sector are as below:

RESEARCH PROBLEM: What is the current status of incentives (cuts/commissions) provided by pharmaceutical companies to doctors and chemists in the state? What impact does it have on ‘Rational Use of Drugs’? Why have these incentives continued to be provided by the companies, in spite of regulatory safeguards being in place? What can be done to ensure that companies undertake their marketing activities keeping in view the principle of ‘Rational Use of Drugs’

RESEARCH PROBLEM: What is the current status of presence of expired drugs in the market in the state? If they are present, why have they continued to be present in the market, in spite of regulatory safeguards in place? What should be done to make betterments in the drug supply chain in the market?

3.2.2 Data Collection

The data are collected mainly through two sources:

Desk research ( secondary data)

Interviews with Stakeholders i.e respondents of pharma firms, associations, medical representatives and relevent government departments

The data includes both qualitative and quantitative aspects. The data collection tools were designed, field testing was done and then final tools were implemented to obtain primary data from the pharmaceutical sector. The data is collected from Ahmedabad, Vadodara, Bharuch and Valsad cities/districts of Gujarat state.

Following is status of data collection till this stage:

a) From Pharmaceutical firms:

Sr. No. Name of District Sample Size of Pharmaceutical firms visited

Nature of Firms Size of Firms

Formulation Bulk Small Medium Large

1 Ahmedabad 48

2 Vadodara (Baroda) 21



3 Bharuch 18

4 Valsad 13

Total 100 100 100

This study covered 48 % small firms, 26 % medium and 26 % large pharmaceutical firms from the above areas. It covered both formulation and bulk drug companies.

b) From Medical Representatives: 35 medical representatives were interviewed based/working in Ahmedabad and Vadodara.

c) Industrial Association : 1(Associated Chambers of Commerce and Industry of India) d) Medical Representative Association: 1( Gujarat State Medical Representative Association) e) Pharmaceutical Association: 1 (Indian Drug Manufacturer’s Association)

3.2.3: Data analysis:

Data was entered into MS Excel 2007 software and verified. Data was analyzed using E.p.i-info 3.5.1. Software. Percentage and average methods have been applied to analyze the data.

3.3 Phases of Project Actitivies in Gujarat state:

The research study is implemented in three phases as below:

Phase I Phase II Phase III

Survey of Pharmaceutical Firms Data collection from Chemist Association

Data Collection from State Food & Drug Control Authority

Survey of Private Hospitals Data Collection from Medical Representatives

Data Collection from State Pollution Control Board( SPCB)

Survey of Medical Representatives

Data Collection from Association of Pharmaceutical Firms ( IDMA, BDMA, Local Pharma Manufacturing Association)

Data collection from State Environment Department

Prescription Analysis Data Collection from State Medical Associations and Local Branches of IMA

Data Collection from State Department of Health & Family Welfare

Data Collection from State/ Local Industry collectives (CII, FICCI, ASSOCHAM)



BRCC Project Partners Meeting:

The meeting was convened to bring all the four state partners to one platform and intimate them about their roles and responsibilities in the project in the times to come after taking them through the evolution of the project. The meeting clarified concepts related to current status of CSR actions, national guidelines, regulations, project objectives, plan, sample selection, research methodology etc. The meeting was conducted in Jaipur (13 April) and was attended by all four partners from different states. The meeting was facilitated by CUTS International.

Fact Finding Visit:

A fact finding visit was conducted during 13th to 17th March 2012. The fact finding visit was participated by two team members from CUTS internatinoal and two RDC representatives. The team visited different stakeholders like government departments, academic institutions, NGO Associations, NGO members, Industry asscociations, pharmaceutical companies and private hospital staff located in Ahmedabad, Gandhinagar, Vadodara and Bharuch. The objective of Fact Finding Visit was to understand first hand situation from the experts in the field.

State Inception Meeting:

At State level an inception meeting was conducted by RDC with CUTS International team members on 20th April 2012 in Ahmedabad. The inception meeting was attended by 20 representatives from government, industry and pharma association, NGO representatives, acedemic experts and industry peoplefrom Gujarat. The participants were briefed on the importance of the project and its content. Participants shared their experiences/perspectives in brief about the current practices and made suggestions for improvement in functioning of both sectors.

State Level Stakeholder’s Dialogue:

A state level dialogue on primary findings of the study was conducted on 11th September 2012 where in different stakeholders from state and central level government departments, NGOs, representatives of associations and members of pharma companies, media representatives shared their views.

Following is a list of chronological events of the project implementation at RDC level till date:

Sr. No Event Date

1 Initial Contact with CUTS International

(By Suresh Parmar with Sameer Chaturvedi)

02/03/2012

2 Fact Finding Visit for understanding the scenario in the Pharma and Health Sector (Ahmedabad, Baroda, Bharuch and Ankleshwar-Panoli)

13/03/2012 to 17/03/2012

3 Meeting of CUTS with RDC Team 18/03/2012

4 Partner’s Workshop in Jaipur

(Participated by Suresh & Ajay)

13/03/2012

5 MOU Signed between RDC – CUTS 28/03/2012

6 Sharing of Guidance Note about field work from CUTS 04/04/2012



7 Partners’ Workshop at Jaipur 13/04/2012

8 Sharing Questionnaire for field work from CUTS 19/04/2012

9 State Inception Meeting at Ahmedabad of all stakeholders. 20/04/2012

10 Starting of Pilot Field Work 25/04/2012

11 Revision of MoU from CUTS 07/05/2012

12 Sharing of BRCC Glossary 10/05/2012

13 Identifying Team Members for BRCC Field Work 10/05/2012

14 Sharing Filled Questionnaires of Pilot Basis Field work by RDC to CUTS

15/05/2012

15 Comments (preliminary) on questionnaires by RDC 17/05/2012

16 Telecom with Gujarat BRCC team on experiences of field work 17/05/2012

17 Sharing of Prescription Analysis Protocol developed by RDC 21/05/2012

18 Meeting/Visit of CUTS team for field work in Gujarat (Ahmedabad and Vadodara)

23 and 24/05/2012

19 Sharing Data Entry format of Prescription Analysis by CUTS 29/05/2012

20 Sharing Data Entry format of first phase field work by CUTS 05/05/2012

21 Sharing presentation structure and agenda for PAC meeting and partners workshop at Delhi (Project Advisory Committee on 26th June 2012) by CUTS

11/06/2012

22 Started data entry of filled questionnaires in formats 15/06/2012

23 Comment on data entry formats on telephone with CUTS 18/06/2012

24 Sharing second phase questionnaires and ToR for state level report 22/06/2012

25 Preparation of Interim Report on Prescription Analysis and MRs interviews by RDC

25/06/2012

26 PAC meeting and partners’ workshop at Delhi 26/06/2012

27 Sharing data entry formats of second phase questionnaires by CUTS 23/07/2012

28 Starting of second phase field work 25/07/2012

29 Sharing third phase’s questionnaires by CUTS 31/07/2012

30 Sharing guidance note of second phase analysis 03/08/2012



31 Finalization of Date for State Level Focus Group Dialogues at Ahmedabad

05/08/2012

32 Sharing Data entry formats for 3rd phase questionnaires 07/08/2012

33 Finalization of all dates of submission of BRCC project to CUTS by RDC

13/08/2012

34 Sharing of preliminary findings from field work by RDC to CUTS 15/08/2012

35 State level stakeholder dialogue 11/09/2012

36 National Policy Forum with all the key stakeholders at New Delhi 08/10/2012

4. Situation Analysis of the Pharma Sector in the Gujarat State

4.1.1) Evolution of the Sector in the State especially enabling factors

In the pre-independence era and until emergence of pharmaceutical industries in Gujarat, India was not self-sufficient in medicines and was a net importer of the most of bulk drugs and many formulations. In 1947 the year of Independence, India's pharmaceutical production was to the tune of Rs. 100 million only. The synergistic efforts of Central/State Governments and Indian pharmaceutical industry resulted in the increase of production of bulk drugs (API) and finished formulations targeting the goal of self-reliance in the pharmaceutical sector.

Gujarat leads India in pharmaceutical sector and enjoys a share between 35% and 46% of the nations production over the last two decades. Ahmedabad and Vadodara are leaders in the production of generics while Ankleshwar and Vapi produce much of India's bulk drugs. The history of the pharmaceutical industry in Gujarat begins in 1907 when Alembic Chemical Works Co. Ltd. was formed by taking over distilleries in Baroda (Vadodara) with a view to manufacturing alcohol and tinctures primarily for pharmaceutical products.

During the 1940s and 50s, companies like Sarabhai Chemicals, The Gujarat Pharmaceutical and Chemical Works, Atul Products Ltd., Allied and Cadila Laboratories were established in the post-World War 2 period, referred to globally as the 'therapeutic revolution'. An important landmark in the industry's history was the establishment of LM College of Pharmacy at Ahmedabad in 1947. This college has provided many entrepreneurs, technocrats and drug controllers to the pharmaceutical industry in the state.

The pharmaceutical industry grew rapidly after Gujarat was declared a state with Dr. Jivraj Mehta as its first chief minister in 1960. The number of manufacturers in Gujarat grew from 117 in 1962 to more than 900 in 1985 with a major share in the country's pharmaceutical production. There are many production houses of MNC pharmaceutical companies in Gujarat. In addition there are two big MoUs signed with Gujarat by MNCs and they are going to establish their production units in next few months. One of them is the biggest pharmaceutical firm of the world. The revisions in the Patent Act also benefited the domestic industry in India. Another development that impacted the pharmaceutical sector during this period was the establishment of pharmaceutical machinery manufacturing unit, Cadmach in 1967 by Shri Ramanbhai Patel with products catering to various needs of the pharma industry.

During the 1990s and 2000s, Gujarat's companies saw a quantum leap in production and exports with a strong focus on regulated markets as they geared up for globalization. The large



manufacturers successfully entered the capital markets to make the most of the stock market boom to raise resources for increasing production and research facilities. During the last decade, Gujarat's pharmaceutical companies like Sun Pharma, Zydus Cadila, Torrent and Dishman have been expanding their global footprints through acquisitions, mergers and alliances with international companies and setting up subsidiaries and marketing offices overseas. Gujarat's pharma companies have also been increasingly working towards getting their facilities approved by USFDA and other international regulatory bodies to augment their market presence across regulated and semi-regulated markets.

There are currently approximately 3,500 drug manufacturing units in Gujarat. Over the last few years Gujarat’s contribution in the growth of India’s pharmaceutical sector has been significant. The state contributes 42 % of the country’s pharma turn over and 22 % of exports. Approximately 52000 people are employed in Gujarat’s pharmaceutical sector which has witnessed 54 % CAGR (Compound Annual Growth Rate) in capital investments over the last three years. 2

Valued at US$ 4.4. billion in 2005-06, Gujarat’s pharma industry has grown at a stupendous CAGR of almost 88 % between 2003-03 and 2005-06 as against the 18 % growth registered by Indian pharma Industry in the corresponding period.

In the export segments too, Gujarat’s pharmaceutical industries performance has been exemplary. In the year 2005-06, of the state’s total exports of bulk drugs constituted 40 % and formulations 60 %. As a precursor to growth, capital investment in the pharma industry in Gujarat has also increased at an amazing CAGR of about 54 % between financial year 2003 and 2006 – as reflected in the increase of number of units –from 1964 in 2003 to 3462 in 2007.

2 Food and Drug Control Administration (FDCA)



Gujarat is set to witness tremendous benefits from the development of SEZs such as it already has an established pharma ecosystem with excellent infrastructure facilities.

Gujarat's pharmaceutical industry is now ready for sustainable growth, major capacity expansions and an increasingly important role in global consolidation process. In India, there is an increasing spend on healthcare as an emerging economy creates higher incomes, improved health insurance penetration, and lifestyle-related diseases.

On the international horizon, there are abundant opportunities for Gujarat pharmaceutical companies. The outsourcing of R&D with more and more products going off-patent and declining R&D productivity in many countries offers considerable possibilities for India, a preferred off-shoring destination for many countries, especially for companies involved in contract research,



manufacturing and clinical trials to leverage their potential. The growth of the generic sector, in which Gujarat already has a substantial share of India's production and exports, also offers much scope of sustainable growth and production expansion.

Gujarat's pharma companies have also started scaling up their R&D operations to tap the huge potential of therapeutic categories that offer opportunities for those who take the lead in becoming global, innovative research-based pharmaceutical companies.

Modern and well developed infrastructure: Guajrat boasts one of the best infrastructure facilities in India whether it is road, ports, power or other logistic facilities. The Rajiv Gandhi Institute for Contemporary Studies has adjudged Gujarat as the best state in India for “ Economic Freedom”. Proactive government policies and investor friendly environment are main factors. One of the key challenges the state is facing for growth of pharma industry is inadequate talent pool as the pharma industry growth is dependent on that.

4.1.2) Sectoral Collectives

4.1.2.1): Associations:

In Gujarat following are the types of associations involved with pharmaceutical industry:

i) Indian Drug Manufacturer’s Association (IDMA):

There in only one association Indian Drug Manufacturers Asscociation (IDMA) which is is active with 200 membership based in Gujarat. There is Indian Pharmaceutical Association which is not so active though they have an office in Vadodara. Basically people from the pharma academy are on the governing body of this association, besides some students. Only a few pharma industrialists are joined with IPA, so there is not much activity in/by this association. Apart from this, there may be more than one association in the pharma cluster. But its role may not be more than IDMA. So, IDMA is the main pharma association in Gujarat. Also there is no bulk drug association (BDMA) in Gujarat.

The mandate of IDMA includes providing member firms with a platform where they can discuss their needs and problems, provide technical suppport to members for improving their production and marketing methods as per norms, act as a medium of interaction with relevant government authorities and other associations, keep member firms updated on policies and regulations. The



main criteria to become member is the type of drugs produced by the firm. In term of the membership base it has 170 members in 1970 which has increased to 200 in 2012.

The issues taken up by IDMA in Gujarat include the issue of Food Safety Act for amendment, bar coding (to introduce barcode in the product and fix dose combination). The Chairman and Joint Secretary of the association are aware of National Voluntary Guidelines on Social, Environmental and Economic Responsibilities of Business.

The assocication meets the state/health administration once in two months mainly to discuss issues related to membership and if there is need for improvement in that. The association meets state/local level collectives once in six months but neither improvement nor outcome is experienced by them. With state pollution control board, meetings are organised once in six months. Usually it resulted in 25 % outcomes.

ii) Gujarat State Medical Representatives Association (GSMRA)

In Gujarat at state level there is Gujarat State Medical Representative Association (GSMRA). It is a branch of Federation of Medical Representative Associations of India (FMRAI). The GSMRA mainly provides a common platform to MRs to share their needs and problems, to act as a medium of communication between MRs and pharma firms, to keep the MRs updated about good practices and important information. It does not play role of acting as medium of communication between MRs and other stakeholders associated with pharma sector. The other thing to note is that the state level MR association is not active. In fact there is no MR association which is active in Gujarat. On the other hand there are more than 30000 MRs are working in the sector in Gujarat. The state level MR association has only 50 members. Till date not many MRs are willing to join this type of association. Many MRs reported in the questionnaire that they are fearful in joining such associations, unions as there is a watch and open action from companies. Although, at district level there are many districts in Gujarat where MR associations are working and are active/powerful in comparison with state level association.

The GSMRA does have guidelines to be followed by MRs but it does not specify number of doctors/hospitals to be visited by MR in a certain period. As stated other than doctors, MRs meet procurement officers, administration departments, nursing departments and purchase departments in private hospitals. To visit doctors usually random visit is the procedure followed by MRs and usually MR fix visit directly. The minimum requirement for getting MR job is graduation as per the GSMRA respondent. Some MRs also said that now there is no criteria for getting job as MR. Many companies started to recruit candidate who have passed 10th or 12th standard.

iii) Associated Chambers of Commerce and Industry of India (ASSOCHAM)

The rationale behind the constitution of the ASSOCHAM is to improve business environment in the state leading to the rise in the profit for various industries, to develop adequate guideline, policy/regulation in coordination with government agencies for industries in order to ensure responsible conduct from the part of business, to act as a medium of communication between industries and government agencies, to provide industries/firms doing business in the state with a proper platform where they could discuss their problems and other relevant issues having direct bearing on business, to encourage industries in state to adopt ethical way of producing goods and services and to keep industries/business updated about the recent policies, regulations, laws etc.

This association does not maintain numbers of pharma membership, which is with its Head Office at New Delhi. The association does not have any state/locality-specific regulatory instruments (code/manual/guideline etc.) put in place by themselves for its members to follow; neither they play a monitoring role. Usually the members meet once in a month with different agenda such as recent issues having direct bearing upon the business environment, any industry specific issues but issues are taken up on priority especially related to formulation of policies and regulations.



With State/health administration, state/local level collectives, state industries department, state/local level IMA, state local private health care sector association, GPCB, the ASSOCHAM have meetings every month either in research conferences or other events to discuss and resolve issues. They find need for improvement in form of submitting recommendations and regarding the outcomes of such interaction.

4.1.2.2) Government Departments:

i) Food & Drug Control Authority (FDCA):

FDCA carries out regular inspections which includes regulating the manufacturing and supply of

drugs in the state, ensuring effective implementation of policies framed by the Central and State

governments, regular monitoring of drug producing units, capacity building of pharmaceutical firms

for better adherence of rules and regulation and providing technical/financial support (partly) to

pharmaceutical firms.

FDCA has staff of 1271 with 500 technical professionals and has an annual budget between Rs40-45

crore. The organogram of FDCA shows District level Assistant Commissioner and designated officers

appointed for food safety and standard act at every district.

ii) Department of Health and Family Welfare (DoH&FW)

The respondent shared that functions which falls under the mandate of DoH&FW Gujarat includes developing state level policies for improving healthcare and capacity building of state level regulators for better implementation of polices and regulation. The respondent mentioned that in addition to above functions, DoHFW mandate also includes framing polices related to prevention/control of epidemics such as sickle cell anemia.

It was shared by the respondent that, with Ministry of Health and Family Welfare, 2 to 3 meetings

per month take place related to proposal submissions and policy issues wherein the agenda includes

reporting, approval on proposals and opinions on policy issues. The final outcome of these

interactions results into release of funds, approval of proposals and changes in policies are seen

accordingly. The representative finds interaction going on with the Ministry is “ok”.

Regarding interaction with Central Drug Standard Control Organization (CDSCO), 1 to 2 meetings

takeplace per month where the agenda remains registration of vaccines and results of such meeting

is approval of the same.

About interaction with FDCA, the respondent said that much interaction is not done and agenda is

decided as per need. It was said that active interaction is needed from both the sides.

It was shared that meeting with pharmaceutical firms/associations is done on quarterly basis

wherein agenda remains marketing of new drugs and feedback and concerns of department is

accepted by firms and associations. However still there is need for more active participation of

pharma firms/associations.

Interaction with State Pollution Control Board (SPCB) is done on monthly basis through meetings and

letters where the report on BMW is submitted by the department and SPCB accepts the suggestions

and feedback of health department. The respondent feels the interaction is “ok” with SPCB.



On interaction with state/local health administration, it was said that daily meetings take place

where day to day administrative agenda is discussed and the respondent finds the interactions “ok”.

The DoH&FW interacts with State/Local Industry Collectives on quarterly basis through meetings or

letters. Agenda includes issues related to occupational health and hazards. The respondent finds the

interaction “ok” and they understand concerns of health department.

iii) Gujarat State Pollution Control Board

The main function of GPCB is to develop state level programmes on environmental issues for various

stakeholders, monitoring of firms to keep track of their overall performance on environmental

aspects, to act as a communication channel between CBCB and industries in the state, to provide

technical assistance to industries and to undertake environmental clearances of new and expanding

industries.

GPCB has 500 staff across Gujarat which includes 135 technical professionals. It has 35 Departments,

1 Head office, 22 Regional Offices across Gujarat. The annual budget was not revealed by the

representative of GPCB.

The key factors having direct implication on effectiveness3 of GPCB, as per the respondent E-

Governance is rated as highest influencing factor (with ranking of 10), followed by training and

public awareness i.e. ranking of 8 and ranking of 7 respectively and Accreditation by NABL. GPCB

interacts almost every two days with Department of Forest and environment at state level and with

CPCB once in a week.

iv) Department of Environment:

The state environment department engages with the pharma/industry/hospital associations through

meetings/seminars on a regular basis, visits to the industrial sites and through interaction with the

sectoral associations.

The respondent also shared that through regular and effective coordination with academic

institutions and R&D centers, the interaction between the environment department, the

departments of pharma and of health will improve further. The department of environment has

regular interactions and meetings with department of pharmaceuticals and DoH&FW. This is helpful.

The state environment department has interacts with the Ministry of Environment and Forest

though meetings. The strong element of these meetings include attendance by all officials, focus on

industrial and other pollution related points as agenda, and resultantly awareness levels increases

among industry and the performance of the department has also improved. It was suggested by the

respondent that interaction with MoE&F can be improved through seminars on new technologies

and information and regular coordination with department.

It was felt that the environment department meets with nearly all the State Government

Departments on need-based agenda.

3 Based on rating on scale 1 to 10 where 1 has least influence and 10 has maximum influence



4.1.3) Sectoral Regulatory Framework vis-à-vis Business Responsibility in the State

Major bodies regulating drugs and pharmaceuticals in India:

The principal regulatory bodies entrusted with the responsibility of ensuring the approval,

production and marketing of quality drugs in India at reasonable prices are:

The Central Drug Standards and Control Organization (CDSCO), located under the aegis of

the Ministry of Health and Family Welfare. The CDSCO prescribes standards and measures

for ensuring the safety, efficacy and quality of drugs, cosmetics, diagnostics and devices in

the country; regulates the market authorization of new drugs and clinical trials standards;

supervises drug imports and approves licenses to manufacture pharmaceutical products.

Drug Controller General of India (DGCI) is responsible for approval of licensing of specified

categories of drugs such as blood and blood products, IV fluids, vaccines and SERA in India.

The National Pharmaceutical Pricing Authority (NPPA), was instituted in 1997 under the

Department of Pharmaceuticals which is under Ministry of Chemicals and Fertilizers which

fixes or revises the prices of decontrolled bulk drugs and formulations at judicious intervals;

periodically updates the list under price control through inclusion and exclusion of drugs in

accordance with established guidelines; maintains data on production, exports and imports

and market share of pharmaceutical firms; and enforces and monitors the availability of

medicines in addition to imparting inputs to Parliament in issues pertaining to drug pricing.

The main aspects of pharmaceutical regulation are thus divided between the above two ministries

i.e. Ministry of Health and Family Welfare and Ministry of Environment & Forests. However, other

ministries also play a role in the regulation process. These include the Ministry of Finance, Ministry

of Commerce and Industry and the Ministry of Science and Technology.

The process for drug approval entails coordination of different departments, in addition to the DCGI,

depending on whether the application in question is for a biological drug or one based on

recombinant DNA technology. Issues related to industrial policy such as the regulation of patents,

drug exports and government support to the industry are governed by the Department of Industrial

Policy and Promotion and Directorate General of Foreign Trade, both under the aegis of Ministry of

Commerce and Industry and the Ministry of Chemicals and Fertilizers. With respect to licensing and

quality control issues, market authorization is regulated by the Central Drug Controller, Ministry of

Health and Family Welfare, Department of Biotechnology, Ministry of Science and Technology (DST)

and Department of Environment, Ministry of Environment and Forests. State drug controllers have

the authority to issue licenses for the manufacture of approved drugs and monitor quality control,

along with the Central Drug Standards Control Organization (CDSCO).

Prevailing Mechanisms for drug manufacturing, quality and marketing:

In India, drug manufacturing, quality and marketing is regulated in accordance with the Drugs and

Cosmetics Act of 1940 and Rules 1945. This act has witnessed several amendments over the last few

decades. The Drugs Controller General of India (DCGI), who heads the Central Drugs Standards

Control Organization (CDSCO), assumes responsibility for the amendments to the Acts and Rules.



Other major related Acts and Rules include the Pharmacy Act of 1948, The Drugs and Magic

Remedies Act of 1954 and Drug Prices Control Order (DPCO) 1995 and various other policies

instituted by the Department of Chemicals and Petrochemicals.

Some of the important schedules of the Drugs and Cosmetic Acts include:

Schedule D: Deals with exemption in drug imports;

Schedule M: Deals with Good Manufacturing Practices norms involving premises and plants and

Schedule Y: Specifies guidelines for clinical trials, import and manufacture of new drugs

In accordance with the Act of 1940, there exists a system of dual regulatory control i.e. control at both Central and State government levels. The central regulatory authority undertakes approval of new drugs, clinical trials, standards setting, control over imported drugs and coordination of state bodies’ activities. State authorities assume responsibility for issuing licenses and monitoring manufacture, distribution and sale of drugs and other related products.



The Patents Act of 1970, Drug Price Control Order 1970 and Foreign Exchange Regulation Act 1973

played a significant role in terms of building of indigenous capability with regard to manufacture of

drugs. The New Drug Policy of 1978 provided an added thrust to indigenous self-reliance and

availability of quality drugs at lower prices.

DPCO 1987 heralded the increasing liberalization in the industry. One of the important features of this act was the reduction of the number of drugs under price control to 143.The major objective of DPCO 1995 was to decrease monopoly in any given market segment, further decrease the number of drugs under price control to 74 and the inclusion of products manufactured by small scale producers under price control list.



In 1997, the National Pharmaceutical Pricing Authority was constituted in order to administer DPCO and deal with issues related to price revision.

The Pharmaceutical Policy 2002 carried forward earlier governmental initiatives in terms of ensuring quality drugs at reasonable prices, strengthening of indigenous capability for cost-effective production, reducing trade barriers and providing active encouragement to in-house R&D efforts of domestic firms.

In 2003, the Mashelkar Committee undertook a comprehensive examination of the problem of spurious and sub-standard drugs in the country and recommended a series of stringent measures at Central and state levels. The regulatory body came in for censure with the committee noting that there were only 17 quality-testing laboratories, of which only seven laboratories were fully functional.

The National Pharmaceutical Policy 2006, among other initiatives, has proposed a slew of measures

such as increasing the number of bulk drugs under regulation from 74 to 354, regulating trade

margins and instituting a new framework for drug price negotiations in a move to make drugs more

affordable for the Indian masses.

Pricing, Different Pharma Products, Patents and GMP issues in Indian Pharma Companies:

Drug Pricing:

The pricing policy and industry regulation constitutes one of the key responsibilities of the NPPA.

Price control on medicines was first introduced in India in 1962 and has subsequently persisted

through the Drug Price Control Order (DPCO). As per the directive of NPPA, the criterion for price

regulation is based on the nature of the drug in terms of whether it enjoys mass consumption and in

terms of whether there is lack of adequate competition for the drug. The year 1978 witnessed

selective price controls based on disease burden and prevalence. The list of prices under DPCO

subsequently witnessed a gradual decrease over a period of time. Around 80% of the market, with

342 drugs, was under price control in 1979. The number of drugs under DPCO decreased from 142

drugs in 1987 to 74 in 1995. DPCO which is under revision and it is expected that 348 drugs will be

covered under this. There exist different views on whether it will help end users or the industry. The

ceiling pries of more than 75 out of 350 is around Rs7 to 12. But its actual manufacturing cost is

more than its ceiling pries4 mentioned in DPCO. So, there are so many products, which are fading

away from the market. To save themselves from this critical situation, many pharma manufacturers

have find out ways, which can be shortcuts5.

This may lead indigenous manufacturers (i.e. most of them are small scale) to stop manufacturing

such products. Even medium scale companies can also not afford such production costs. And this

paves way for MNCs to capture such segments.

Drugs with high sales and a market share of more than 50% are subjected to price regulation. These

drugs are referred to as scheduled drugs. The NPPA also regulates the prices of bulk drugs. The MRP

4 There is a Drug Composition (Formulation) e.g. Gentamycin+Clobestasole Propionate+lodochlorophydroxy-quinoline + etc

+ etc. 10 ml Bottle) its ceiling pries in DPCO is 5.72/- Now All taxes are 10 % + Marketing Cost -20 % + Commissions are 20 %) So the cost of drug comes more than 8 Rs. 5 As per article in ‘Abhiyan’, Gujarati Weekly Magazine



excises on medicines was levied by the Finance Ministry in 2005 with objective to increase revenue

and lower prices of medicines by using fiscal deterrent on MRP. This change may have had some

impact in terms of magnifying the advantage to industries located in the excise free zones like Baddi

and Sikkim. This also succeeded in attracting some small pharmaceutical firms to these zones6.

As the report by NIPER (National Institute of Pharmaceutical Education and Research), submitted to

the Ministry of Chemicals and Fertilizers in 2007 points out, this may have led to tax disparities

among firms located in tax-exempt zones and tax non-exempt areas. This has also led to small firms

in non-exempt areas requesting for tax subsidies from the government.

For drugs not under price control, firms can set the MRP-. The NPPA only intervenes in cases where

drugs have significant sales and where the annual price increases by 10%, which came into effect in

2007, as in the past the NPPA would intervene only if the annual price increases were more than

20%.

Fixed dose combinations and prevalence of counterfeit and spurious drugs:

The issue of the definition of counterfeit drugs is relevant in the context of different drug quality

standards prevailing in the Indian market. While exported drugs were of a higher quality

(WHO/FDA/EMEA/TGA), to meet the required standards in the country of export, in the case of the

domestic market, adherence to local quality standards, fixed by the regulatory body was sufficient.

Also absence of transparency in licensing procedures has resulted in the market being flooded with

counterfeit and substandard drugs. In this context, the Mashelkar Committee report has referred to

a WHO study, which declared that nearly 30% of the Indian market was flooded with spurious,

substandard or counterfeit drugs. The government’s own estimates have been in the range of 8-10%

for substandard drugs and 0.2-0.5% for spurious drugs.

Patents and Data Protection related issues:

The Indian Patent Act 1970 was amended through the Patents Amendment Act (2005). A technical

expert group was constituted under the chairmanship of Dr. R.A. Mashelkar, the then Director

General of the CSIR (Council of Scientific and Industrial Research). The Committee decision was that

it would be TRIPS (Trade Related Aspects of Intellectual Property Rights) incompatible to exclude

microorganisms from patents and to limit the grant of the patent for pharmaceutical substance to a

new chemical entity or a new medical entity involving one or more inventive steps.

The committee also opposed the granting of frivolous patents and ever greening and recommended

the formulation of detailed guidelines to ensure that only those patents proving ‘substantial human

intervention’ and ‘utility’ were granted.

As per the provisions of Article 39(3) of the TRIPS Agreement, member countries have to provide

protection to regulatory data submitted for market approval of pharmaceutical products under

specific circumstances. The Government of India constituted an expert committee under the

chairmanship of Mr. Satwant Reddy to formulate adequate steps to deal with the issue of data

protection. The Reddy Committee report, brought out in 2007, stated that in the context of

pharmaceuticals, the present legal regime was inadequate to address the issues related to data

6Gehl Sampath 2008, Srivastava 2008



protection with respect to Article 39(3) provisions. It also underscored the need for more clear and

stringent mechanisms within the Drugs and Cosmetics Act to ensure that undisclosed test data was

not put to unfair commercial use in India.

Good Manufacturing Practices (GMP):

Good Manufacturing Practices (GMP) constitute an international set of guidelines for the

manufacture of drugs and medical devices in order to ensure the production of quality products.

GMP protocols7 are being adopted and followed in over 100 countries, either in the form of

Regulations or Directives or Guides or Codes in different counties. The objective of GMPs is to

minimize risks with reference to the manufacturing, packaging, testing, labeling, distributing and

importing of drugs, cosmetics, medical devices, blood and blood products, food items etc. These

protocols are largely concerned with parameters such as drug quality, safety, efficacy and potency.

India is one of the signatories to the certification scheme. The WHO-GMP certification, which

possesses two-year validity, may be granted both by CDSCO and state regulatory authorities after a

thorough inspection of the manufacturing premises.

Schedule M Compliance:

The requirements specified under the upgraded Schedule ‘M’ for GMP have become mandatory for

pharmaceutical units in India with effect from July 1, 2005. Schedule M classifies the various

statutory requirements mandatory for drugs, medical devices and other categories of products as

per the current Good Manufacturing Practices (cGMP). The revised Schedule M protocols along the

lines of WHO and US-FDA include detailed specifications on infrastructure and premises,

environmental safety and health measures, production and operation controls, quality control and

assurance and stability and validation studies.

Problems related to Schedule M compliance are mostly confined to small-scale pharmaceutical units

as large-scale firms have shown greater willingness to comply with the revised norms in order to

increase their competitiveness in the global arena. According to state regulatory sources, units in

states like Gujarat, Karnataka, Maharashtra and Andhra Pradesh have achieved a high percentage of

Schedule M compliance in comparison to units in other states.

A large number of Indian firms are increasingly seeking at least WHO GMP approval in order to

compete for exports to CIS (Commonwealth of Independent States) countries and other Asian

markets. India has the distinction of having the largest number of US-FDA approved manufacturing

units, totaling 100, mainly for production of Active Pharmaceutical Ingredient (API), outside of the

United States. Gujarat has 460 pharma units which have WHO GMP as per FDCA Gujarat and 191

pharma firms in Gujarat have State-GMP Certificate.

Clinical trials:

In recent years, India has positioned itself as one of the major players in the clinical trials arena.

Considering the relatively low costs of R&D in India, several MNC pharmaceutical companies, as well

as global clinical research organizations are increasingly making India a clinical research and

development hub.

7 Instituted by WHO in 1975



Till about a decade ago, regulatory and ethics based environment for the conduct of quality clinical

trials in India were conspicuous by their absence. The Central Drugs Standards Control Organization

(CDSCO) has played a critical role towards this end. The progression towards Good Clinical Practice

(GCP) has largely been a gradual and slow process. It was in 1988 that local clinical trials for new

drug introductions were first made mandatory in India. The period before 2000 witnessed several

incidents of ethical violations related to informed consent and conduct of trials by multinational

firms and domestic players as well. In 2000, due to the proactive initiatives of regulators, the Central

Ethics Committee on Human Research (CECHR) and Indian Council of Medical Research (ICMR)

conceptualized and issued Ethical Guidelines for Biomedical Research on Human Subjects. In 2001, a

Central Expert Committee was set up by Central Drugs Standards Control Organization (CDSCO) to

develop Good Clinical Practice (GCP) guidelines in line with the latest WHO and ICH guidelines.

In 2005, Drugs Technical Advisory Board (DTAB) made GLP practices mandatory for all laboratories

and in-house units of pharmaceutical firms and Contract Research Organizations (CROs). In 2007,

norms pertaining to the Phase lag have also been revised and Schedule Y now permits Phase I trials

to be carried out concurrently in India along with the rest of the world.

Medical Devices:

In June 2007, the DCGI formulated a new set of guidelines for the import and manufacture of

medical devices in the country. Based on the Mashelkar Committee, the Drugs Consultative

Committee approved these recommendations in 2005, ensuring that in future all devices would be

licensed for manufacture, distributed and sold by the CDSCO, with special evaluation committees in

order to ensure that the concerned manufacturing units complied with the requisite GMP

requirements. As per this guideline, cardiac and drug eluting stents, catheters, bone cement, heart

valves, scalp vein sets, orthopedic implants, internal prosthetic replacements, IV cannulae and

intraocular lenses; would be considered as drugs and consequently regulated. Importers would have

to submit US-FDA clearance, the EU medical device directive or similar approvals from other

countries as proof of adherence to quality standards.

Biotech Products:

The Ministry of Environment and Forests under the Environment (Protection) Act of 1986 have

notified the rules for the manufacture, use, import, export and storage of hazardous microorganisms

or genetically engineered organisms or cells. As per these rules, biological materials are regulated

from the R&D stage to their release in the environment.

The Institutional BioSafety Committee (IBSC) functions as the nodal point for interaction within the

institution for the implementation of the DNA Biosafety guidelines. The Review Committee on

Genetic Manipulation (RCGM) essentially monitors the safety related aspects of activities involving

genetically engineering organisms or hazardous microorganisms. The Genetic Engineering Approval

Committee (GEAC) undertakes the responsibility of approval of activities involving large-scale use of

genetically modified/hazardous microorganisms and products thereof in research and industrial

production and their safety in terms of environmental protection. In addition, the DCGI and state

drug controllers as per the Drugs and Cosmetics Act 1945 and its subsequent amendments regulate

biological products.



Gujarat FDA has cancelled a number of manufacturing licenses of units, which have not met this

deadline. At the same time it is felt that there is a shortage of qualified manpower trained in GMP

affairs. GMP auditing is a challenge. At present there are only 1,100 drug inspectors in the states and

augmenting this number is necessary.

Proposed National Pharmaceutical Policy (2011):

The Department of Pharmaceuticals has recently released the draft note on the National Pharmaceutical Pricing Policy (2011), which if accepted would replace the present Drug Policy introduced in 1941.

The market-based pricing mechanism proposed by the policy also marks an important shift over the current framework wherein prices are decided through a cost-based approach. The policy also aims at only regulating the prices of formulations as compared to formulations and bulk drugs in the present regime. With the proposed policy expected to cover nearly 60% of the domestic formulations industry, the impact of price control is likely to expand considerably across therapy segments and result in price reduction across the board. According to estimates, about 52% of drugs included in NLEM 2011 could face a reduction of 0-5% in prices of the highest price band, while 32% of the medicines could see a reduction of 20%+. The impact for the balance 16% of the segment is likely to be between 5-20%.

Environment related regulations for Pharmaceutical industry:

In India, the Ministry of Environment and Forests (MoEF) is the apex administrative body for: -

(i) Regulating and ensuring environmental protection; (ii) Formulating the environmental policy framework in the country; (iii) Undertaking conservation & survey of flora, fauna, forests and wildlife; and (iv) Planning, promotion, co-ordination and overseeing the implementation of environmental

and forestry programmes.

The Ministry is also the Nodal agency in the country for the United Nations Environment Programme (UNEP). The organizational structure of the Ministry covers number of Divisions, Directorates, Boards, Subordinate offices, Autonomous Institutions, and Public Sector Undertakings to assist it in achieving all these objectives.

Besides, the responsibility for prevention and control of industrial pollution is primarily executed by the Central Pollution Control Board (CPCB) at the Central Level, which is a statutory authority, attached to the MoE&F. The State Departments of Environment and State Pollution Control Boards are the designated agencies to perform this function at the State Level.

Central government has enacted several laws for environmental protection. The Environment (Protection) Act, 1986 is the umbrella legislation which authorizes the Central Government to protect and improve environmental quality, control and reduce pollution from all sources, and prohibit or restrict the setting and /or operation of any industrial facility on environmental grounds. According to the Act, the term "environment" includes water, air and land and the inter- relationship which exists among and between water, air and land, and human beings, other living creatures, plants, micro-organism and property.



The main provisions of the Act are:-

The Central Government shall have the power to take all such measures as it deems necessary or expedient for the purpose of protecting and improving the quality of the environment and preventing, controlling and abating environmental pollution.

No person carrying on any industry, operation or process shall discharge or emit any environmental pollutants or permit to do so in excess of such standards as may be prescribed.

Where the discharge of any environmental pollutant in excess of the prescribed standards occurs or is apprehended to occur due to any accident or other unforeseen act or event, the person responsible for such discharge and the person in charge of the place at which such discharge occurs or is apprehended to occur, shall be bound to prevent or mitigate the environmental pollution caused as a result of such discharge and shall also forthwith intimate the fact of such occurrence or apprehension of such occurrence; and be bound, if called upon, to render all assistance to such authorities or agencies as may be prescribed.

No person shall handle or cause to be handled any hazardous substance except in accordance with such procedure and after complying with such safeguards as may be prescribed.

The Central Government or any officer empowered by it in this behalf, shall have the power to take, for the purpose of analysis, samples of air, water, soil or other substance from any factory, premises or other place in such manner as may be prescribed.

The Central Government may, by notification in the Official Gazette, establish one or more environmental laboratories; and recognize one or more laboratories or institutes as environmental laboratories to carry out the functions entrusted to an environmental laboratory under this Act.

Whoever fails to comply with or contravenes any of the provisions of this Act, or the rules made or orders or directions issued there under, shall, in respect of each such failure or contravention, be punishable with imprisonment or with fine or with both.

The other important environmental legislations may be categorized as follows:-

Water pollution, Air Pollution Forest Conservation Wildlife Protection Biological diversity

International Cooperation and Agreements on Environmental Issues:

India is a signatory to a number of Multilateral Environment Agreements (MEAs) and conventions. International Co-operation and Sustainable Development Division is the nodal point within the Ministry of Environment and Forests (MoE&F) to co-ordinate all international environmental cooperation and sustainable development issues. The Division also handles bilateral issues and matters pertaining to multilateral bodies such as the Commission on Sustainable Development; Environment Support Programme of UNDP under Country Cooperation Framework-1; Global Environment Facility (GEF) and the regional bodies like Economic & Social Commission for Asia & Pacific (ESCAP); South Asian Association for Regional Cooperation (SAARC); European Union (EU) and the India Canada Environment Facility. The major agreements and conventions which are relevant are:-

Basel convention on trans boundary movement of Hazardous wastes and their disposal Kyoto protocol to UN Framework Convention on Climate Change Convention on Biological Diversity



Following is summary of different acts related to pharma in India and its execution:

Drugs and Cosmetics Act, Schedule Y,

1940, 2005

GCP guidelines

endorsed by DTAB,

ICMR guidelines,

DBT guidelines,

MOH order 1997

Governing policies

Regulating clinical

trials in India and

ethical issues

Major Pharmaceutical policies and Acts

Drug policy 1986 Pharmaceutical policy 2002

National pharmaceutical policy 2006

Competition

act 2002,

executed by

competition

commission

of India.

Competition

control to stop

its adverse

effect on market

Executed by

CDSCO at central

as well as state

level, FDCA at

state level

Drugs and

cosmetics

act,1940

Essential commodities

act, 1955, DPCO,

1995,Executed by

MoC&F, DoC&P

Environment

protection act, 1986

(umbrella

legislation), air act,

water act, soil act,

Hazardous waste

management 1991

Executed by CPCB

(central level) and

SPCB (state level)

Industries (IDR) act,

1951, executed by

MoI&C, DoIP&Pr

Product patent act,

1970

Product patent

act,2005, executed by

CGoPDT, DoIP&Pr

NDPS, 1985,

executed by

Narcotics control

bureau.

Governing policy

Amended

patents

laws

Formulation

On

Margin

Bulk drug

On

prices

Governing

policies

GMP

issues

Sale, distribution,

transshipment of

drugs

Environment

control and

protection

IPR

protection Quality control Price control



Following table provides details about different departments and key objectives of the acts related to pharma as well as environmental aspects related regulations

Sr. no.

Act/Regulation/Declaration

Main objectives Department (central) and functions

Established (Year)

Attached office to

Department

(State) and functions

1 Environment Protection Act, 1986, Air Act, Water Act. Soil Act, Water Cess Act.

Umbrella legislation in India

Environment protection and control

CPCB

Mainly CPCB acts as an advisory committee and coordinates nationwide programmes for prevention of pollution by coordinating with the state counterpart.( SPCB)

1974 MoE&F GPCB

Licensing of allopathic drug manufacturers,

Enforce the various acts like environment protection act, water act, soil act, air act etc

2 Drugs and Cosmetics Act, 1940

Quality control, GMP, cGMP

CDSCO

Approval of new drugs and clinical trials, Banning of drugs and cosmetics, Testing of drugs, Import registration and licensing, Granting test license, Licensing of blood banks, LVPs, vaccines, r-DNA, medical devices.

1966 Mohfw FDCA, Gujarat

Enforcement of GLP, GMP, cGMP and norms set up by CDSCO, GOI, to regulate drug storage and distribution.

3 Essential Commodities Act, 1955, Trade and Merchandise Act 1958

DPCO, 1995

Control of sale and distribution of drugs

Price control over drugs

DoP, NPPA

To regulate prices of the drugs specified under the schedule of the DPCO,

To encourage research and internal cooperation in the pharmaceutical

2008 MoC&F -



research,

To provide technical support in dealing with national hazards in the pharmaceutical industries, promotion of PPP structure in the pharmaceutical sector, planning, development and improvement in the pharmaceutical sector.

matters.

4 Product Patent

Act, 1970, 2005

Conserve and protect intellectual property rights

CGoPDT, DoIP&Pr

To advice the GOI regarding the patents, designs,

To disseminate information and impart training on intellectual training and

To carry out registration activities of the patents.

1995 MoI&C -

5 Industries (IDR) Act, 1951

Control over sale and distribution of drugs

DoIP&Pr Formulation and implementation of the industrial policy for industrial development in conformity with development needs and national objectives, Monitoring the industrial growth in general and performance of industries

1995 MoI&C -



specifically assigned to it, Formulation of FDI regarding and approval of FDI, control of sale and distribution of drugs in coordination with various state agencies.

6 Drugs and Magic Remedies Act , 1955

Control the advertisement of the drug and prohibit the advertisement of the drugs alleged to possess magical properties

DCA (central) To regulate market authorization of new drugs, laying down standards of drugs, cosmetics, devices, to regulate clinical research, testing drugs in central laboratory, guidance to technical matter…

1924 CDSCO DCA (state)

Licensing of drug manufacturing and sales manufacturing, Approval of drug manufacture, investigation and prosecution in respect to infringement of the laws and legislation.

7 Hazardous Waste Management Act, 1991

Management and control of the waste emitted or processed out by any and all industries producing such effluents or any other waste as described in the schedule.

CPCB Mainly CPCB acts as an advisory committee and coordinates nationwide programmes for prevention of pollution by coordinating with the state counterpart.

1974 MoE&F GPCB,SEIAA

Licensing of allopathic drug manufacturers, enforce the various acts like environment protection act, water act, soil act, air act etc..,

8 Competition act, 2002

To prevent practices having adverse effect on the market

Competition commission of India Eliminate practices

2003 Commission Members chosen from:

Ministry of

-



To protect the interests of the consumer, and

To ensure freedom of trade of the participants in the markets.

having adverse effect on competition, promote and sustain competition, Protect the interests of consumers and Ensure freedom of trade carried on by other participants, in markets in India

corporate affairs, Chief justice, Ministry of law and justice.

State Level Regulatory Administrative structure in Gujarat:

The key responsible departments for the Pharma sector and its environmental issues at state level

are Department of Health and Family Welfare and State Pollution Control Board.:

Drugs Control Administration (DCA), Gujarat came into existence on 1st May 1960 after separation of Gujarat State from Greater Bombay State. Considering the performance of DCA, Gujarat, Government of Gujarat entrusted one more responsibility of implementation of “Prevention of Food Adulteration Act,

1954” (PFA) and the department was renamed as “Food & Drugs Control Administration” (FDCA) with effect from date 5th December, 1979. A separate wing of Food Inspectors & Senior Food Inspectors was formed at all Circle Offices and head office for the implementation of PFA.

At present FDCA, Gujarat is implementing the following acts and rules in Gujarat through two wings – Food cadre and Drug cadre officers:

1. Drugs & Cosmetics Act 1940 and Drugs & Cosmetics rules 1945. 2. Drugs (Price Control ) Order 1995 3. Drugs & Magic Remedies (objectionable advertisement) Act 1954 & Drugs & Magic Remedies

(objectionable advertisement) rules 1955 4. Food Safety and Standard Act, 2006 and Food Safety and Standard Rules, 2011 5. Cigarettes & other tobacco products (prohibition of advertisement and regulation) and trade

and commerce production, Supply and Distribution Act 2003

Organizational Set up of DoH&FW, Food and Drug Control Administration in Gujarat is as below:



(Source: http://gujhealth.gov.in/fdc-orgsetup.htm)

Commissioner, FDCA is the Licensing Authority & Controlling Authority under Drugs & Cosmetic Act-1940. Commissioner, FDCA has delegated powers of Licensing Authority for Cosmetics & Homeopathy manufacturing to Joint Commissioner (Drug) Joint Commissioner (Ayu) has been notified as Licensing Authority for Ayurvedic Drug Manufacturing. Commissioner, FDCA has delegated powers of Licensing Authority for drug sales licenses to all Assistant Commissioners for the districts allocated to them. At present 25 Circle offices in various districts and they ensure implementation of above acts in the districts allocated to them.

As per FDCA, till 31st May 2012, there are 3637 manufacturing units, and 27708 sales units (retail, wholesale and both). Training of FDCA officers of both cadres, Drug & Food, has been a regular practice, right from induction training of newly appointed officers and in service training.

FDCA, Gujarat makes optimum use of information technology for achieving excellence in performance. Gujarat is the first state to initiate online software for sales & manufacturing licenses. FDCA, Gujarat has a complaint module on its web site to enable citizens to send online complaints regarding drug and food. FDCA, Gujarat also has 24X7 toll free services for citizens to register the complaints telephonically.

Food & Drug Laboratory (FDL), Vadodara is the first NABL accredited Government laboratory in the country. In addition to FDL, Vadodara, FDCA has two other Food Laboratories for testing of food samples, one at Rajkot and one at Bhuj. FDCA is also setting up one more state of art Food & Drug Laboratory at Dethali, Patan District, North Gujarat. This new FDL lab is planned with the latest design as per GLP norms with latest equipment and instruments. Constant up gradation of facilities & equipment in laboratories have always been on priority of FDCA, Gujarat.

Gujarat State Pollution Control Board (GSPCB) under department of Environment and Forestry is the key nodal agency for environmental issues related to pharma sector in the state.

http://gujhealth.gov.in/fdc-orgsetup.htm



Following is administrative set-up of GSPCBf the GSPCB at head office level:



There are 10 regional offices of GSPCB and its administrative set up is as below:

(Source: http://gpcb.gov.in/Regional.htm)



Key deficiencies in the regulatory regimes in India and Gujarat:

There are many difficulties and challenges at the implementation level especially in light of the

proposed new National Pharmaceuticals Policy which includes a proposal for creation of an

upgradation fund to meet these difficulties and financial requirements. Regarding other measures

for Schedule ‘M’ compliance many of the small pharma units are not in a position to invest money

for upgrading the facility. This is more so because there is a shift in the business to tax exempted

States and therefore, operation of units in other States like Maharashtra, Gujarat, and Andhra

Pradesh is becoming unviable.

It is a fact that the procedures followed by various state licensing authorities are different. While

states like Maharashtra, Gujarat, Andhra Pradesh and Karnataka have stringent regulations; the rules

are a bit relaxed in some states. As a result the units in states like Maharashtra, Gujarat, Andhra

Pradesh etc. are finding that their products manufactured under stringent regulations are not in a

position to be cost competitive with similar products from units in other states where

implementation of Act & Rules is casual.

Following are some of the key deficiencies in the pharmaceutical industry related regulations at

present in India which are also relevant for Gujarat:

Lack of adequate human resources in Government departments for monitoring of

environmental compliances of Industries.

Proliferation of spurious and substandard drugs in the market.

Dual licensing mechanism acts as a deterrent to uniform implementation of regulatory

procedures.

Lack of transparency in licensing procedures.

Inadequate regulatory expertise and testing facilities to implement uniform standards.

Need for greater thrust on institutional support to small scale firms to enable speedy

implementation of Schedule M up-gradation and standardization of drug quality.

Need for greater clarity on patentability of pharmaceutical substances and conditions under

which firms can apply for compulsory licenses to prevent legal battles between local firms,

MNCs and civil rights groups.

Need for greater coordination, accountability and transparency in functioning among

different ministries concerned with drug regulation.

5. Results related to issues pertaining to environmental responsibilities in the pharma Sector

A) GMP Compliance and Environmental performance in state by different stakeholders

Awareness about GMP:

95% respondents of pharma firms revealed that they were aware of GMP norms set under the Schedule M of the Drugs & Cosmetics Act, 1940 while 5 % were unaware of it. Among this, the the awareness level about GMP is little higher among medium and large firms as compared to small firms.



The Indian Drug Manufacture’s Association (IDMA) respondents were aware of GMP. As per the respondent, the members firm of IDMA follow disposal of sewage & wastes in conformity with requirement of SPCB, standard operating procedures for sampling, inspecting and testing of raw materials, verification of environmental procedures, filling products in powder form exercised with special care so as to avoid contamination of environment and filter installed to retain dust and protect the local environment as element of GMP. The Associate Chamber of Commenrce and Industries (ASSOCHAM) respondents were also aware of GMP but ASSOCHAM does not have in place any mechanism to monitor adherence to it by pharma industry.

GMP compliances vs. size of pharma firms:

In response to practice of elements of GMP by pharma firms, 80 % respondents said that they follow all elements (i.e. disposal of sewage & wastes in conformity with requirement of SPCB, standard operating procedures for sampling, inspecting and testing of raw materials, verification of environmental procedures, filling products in powder form exercised with special care so as to avoid contamination of environment and filter installed to retain dust and protect the local environment). 16 respondents did not answer the questions. The remaining four are pharma intermediate companies. They need not to follow GMP.

The medium size pharma firms seem more active in implementation of different elements as compared with small and large size pharma firms.

Table 2: Elements of GMP Adopted by firms

Type of firms Small Medium Large Total

Response No. of Responses

No. of Responses

No. of Responses

No. of Responses

%

Disposal of sewage & wastes in conformity with requirement of SPCB

0 1 1 2 2

Standard operating procedures for sampling, inspecting and testing of raw materials

0 2 1 3 3

Verification of environmental procedures

1 2 0 3 3

Filling products in powder form exercised with special care so as to avoid contamination of environment

0 1 0 1 1

Table 1: Awareness about GMP



No. of Responses

No. of Responses

No. of Responses

%

Yes 43 26 26 95 95.00

No 5 0 0 5 5.00

Total 48 26 26 100 100.00



Filter installed to retain dust and protect the local environment

0 2 0 2 2

All of these 34 21 25 80 80

Did Not Answer 13 3 0 16 16

As per the IDMA respondent, large and medium size pharma firms adhere to regulatory compliance of GMP in the state while small firms adhere at medium level.

Benefits accrued to pharma firms

Most of (76 %) respondents stated quality of product as benefit due to GMP, followed by good will of company (52% respondents) and increase in sales (47 respondents). While 37 % respondents stated international recognition as the main benefit of GMP. 5 % respondents stated other benefits.

No signifincant difference in term of perception about benfits due to GMP was observed according to the size of firms.

Table 3: Benefits accrued to the company



No. of Responses

No. of Responses

No. of Responses

%

Quality of products 32 20 24 76 76

Goodwill of firm 20 12 20 52 52

Increase in sale 18 11 18 47 47

International recognition

10 10 17 37 37

Others 4 0 1 5 5

Total 100 Respondents

(Multiple Answers) As per the IDMA respondent the members might have benefited due to GMP in terms of quality of products, good will of the firm, increase in sale and international recognition.

Difficulties faced in GMP compliances by pharma firms:

Of the total pharma firms covered under the study, financial constraint is the main difficulty in complying with GMP as per 59 % respondents and surprisingly it is almost same irrespective of size of firms. Other difficulties faced by pharma firms in GMP compliance includes less support from the government (21 % respondents) and lack of awareness among firms/associations (14 % respondents). Of the total, those firms who do not face any difficulty are 27 %. Comparatively more respondents from large pharma firms stated that they face no difficulty in compliance to GMP than small and medium size firm’s respondents.

Table 4: Difficulties faced by firms in GMP compliance



No. of Responses

No. of Responses

No. of Responses

%

Government is not 10 7 4 21 21



supportive

Lack of awareness among firms/association

4 4 6 14 14

Financial constraints 28 18 13 59 59

Others 6 4 0 10 10

No difficulty 12 5 10 27 27


(Multiple Answer) According to IDMA, lack of awareness among firms/associations and financial constraints are the main difficulties in adhering to the regulatory requirements by pharma firms in the state. To overcome these difficulties IDMA interacts with regulatory authorities, provides technical support to its members, and organizes workshops for awareness on GMP.

Role of state government in enabling GMP compliances

In term of help expected from Central/state government for GMP compliance, as can be seen from table, small firms expects more financial support compared to medium and large firms (34 % of total) While 18 % want the state/central government to keep firms interest in mind while formulating regulations, conducting awareness programs for firms is also expected more by medium and small firms than large firms. On an average, 25 to 30% expect all support from state/ central government i.e. financial support, keeping firms interest in mind while formulating regulations and conducting awareness programs for firms on GMP.

Table 5: Help expected from Central/state government



No. of Responses

No. of Responses

No. of Responses

%

Providing financial support 19 8 7 34 34

Keeping firms interest in mind while formulating the regulation

3 8 7 18 18

Conducting awareness programmes for firms regarding GMP

10 7 10 27 27

All of the above 11 10 5 26 26


Role of association in enabling GMP compliances:

In term of help expected from pharmaceutical associations, nearly half (47 %) of the respondents from pharma firms believe that the associations should have regular interactions with government regarding problems faced by firms on following GMP. While 38 % respondents expect pharmaceutical associations to keep firms updated on recent developments in technology, policy and regulations and few ( 5 % respondents) expect pharma associations to bear the financial cost for following GMP. Rest 15 % feel that phamaceutical association should help by all above support. Thus, it can be concluded that pharma firms expects more technical support from association and financial support from central/ state government for being GMP compliant.



Table 6: Help expected from Pharmaceutical association



No. of Responses

No. of Responses

No. of Responses

%

Providing financial support to small firms for adopting GMP technology

2 2 1 5 5

Having regular interaction with government authorities to discuss problems faced by firms

16 17 14 47 47

Keeping firms updated on recent developments related to technology, policies, regulation

8 16 14 38 38


Total 100

To increase adherence to GMP, IDMA respondents see the role of government as providing financial support, keeping firms interest in mind while formulating the regulations and conducting awareness programs for firms, while they think that pharma association should play the role of having regular meetings with government to discuss the problems related to it and keeping firms updated about recent development related to technology, policies, regulation etc.

Relation between GMP compliance & adverse environmental impacts:

More than half of the respondents of pharma firms (51 %) feel that non compliance of GMP does not create more environmental hazards, while 44 % feel that it does. The small size pharma firms have a strong belief that non-compliance to GMP will not create more environmental hazards as compared to medium and large size firms. 5 respondents did not answer.

Table 7: Opinion on pharma firms which do not follow GMP guideline are more likely to create environmental hazards



No. of Responses

No. of Responses

No. of Responses

%

Yes 15 16 20 51 51

No 30 9 5 44 44



IDMA representative did not feel that if they follow GMP then there would be any environmental impact.



Responses of Government Department Respondents:

Food and Drug control Administration responses:

Food & Drug Control Administration (FDCA) respondent accepts that pharmaceutical firms in the state have adverse environmental impacts. The respondent agrees that compliance with the provision of GMP by pharma firms in the state is adequate to ensure that there will be no environmental implications on part of pharmaceutical firms.

FDCA respondent stated that they undertakes activities like regular meetings with the pharma associations, awareness generation programmes on GMP guidelines for pharma firms and periodic monitoring of pharma firms to encourage GMP compliance in the state to encourage them while SFDCA also issues legal notices against the firms for not following GMP guidelines.

The respondent mentioned that GFDCA provides technical assistance in form of training/capacity building to pharma firms/collectives for GMP compliance. The GFDCA respondent believes that issues pertaining to compliance by pharmaceutical firms (relating to manufacture, marketing and distribution) are better solved in the long run on the basis of consistent and better informed government regulations, strict enforcement of regulations, active role-play by the pharma associations and self – regulation by firms themselves.

Department of Health and Family Welfare responses:

Regarding awareness on the ‘Good Manufacturing Practices’ (GMP) norms set under the Schedule M of the Drugs & Cosmetics Act, 1940, the respondent was well aware of the same. However, regarding specific mechanism adopted by health department to ensure adherence of GMP norms by the pharmaceutical companies, the respondent believe it is up to GFDCA.

B) Major environmental impacts of pharma firms in state

Contribution of pharmaceutical firms to different types of environmental pollution:

As can be seen from table below, 34 % respondents from pharma firms graded contribution of pharma firms to air pollution between ranks 1 to 5, while 28 % respondents graded it between 6 to 10. For water pollution, 33 % respondents graded it between 1 to 5 ranks while 38 % respondents ranked pharma contribution to water pollution between 6 to 10. For land pollution, 29 % respondents graded it between 1 to 5 ranks while 18 % respondents ranked pharma contribution to land pollution between 6 to 10.

For hazardous waste, 27 % respondents graded it between 1 to 5 while 28 % respondents ranked pharma contribution to hazardous waste between 6 to 10 ranks. For health problems in the community, 18 % respondents graded it between 1 to 5 ranks while 16 % respondents ranked pharma contribution to health problems in community between 6 to 10. For occupational health, 23 % respondents graded it between 1 to 5 while 19 % respondents ranked pharma contribution to occupational health between 6 to 10. While for other pollution, 3 % respondent graded it between 1 to 5 while 7 % respondents ranked pharma contribution to other pollutions between 6 to 10.



Table 8: Ranking of contribution of pharma to types of pollutions

Ranking by respondents

Air Pollution

(% of responden

ts)

Water Pollution

(% of responde

nts)

Land Pollution

(% of responde

nts)

Hazardous

Waste (% of

respondents)

Health Problems in

the Community

(% of respondents)

Occupational Health Problems

(% of responde

nts)

Others (% of

respondents)

1 4 14 4 3 2 3 3

2 9 7 8 5 0 1 0

3 3 2 5 8 4 5 0

4 4 1 3 2 2 3 0

5 14 9 9 9 10 11 0

6 3 6 1 2 3 2 0

7 1 1 5 4 4 6 1

8 7 7 6 10 4 6 2

9 9 6 5 6 3 4 3

10 8 18 1 6 2 1 1

Did not answered

0 0 0 0 0 1 1

Total 100 100 100 100 100 100 100

As per the IDMA representatives, the contribution of pharma industries to air, water and land pollution as well as health problems in the community is low. The ACCII respondents find pharmaceutical industry do have adverse environmental impact.

Responses of Government Department Respondents:

Department of Health and Family Welfare:

The respondent was not very well aware of the environmental impact of pharmaceutical firms in the state and according to the respondent, the health department does not deal directly with pharmaceutical firms so actions on bringing environmental concerns on the list of priority issues of pharmaceutical industry does not fall in their portfolio.

As per the respondent, to minimize the environmental impacts caused by pharmaceutical industry, the state health department should take up role of doing IEC campaigns, sensitization of masses and sensitization of each sector within department, while the Ministry of Health and Family Welfare Ministry, should play role to increase coordination among various departments.

Department of Environment:

The respondent stated that surface water pollution is the main environment related problems due to the pharma sector in the state rather than air pollution, ground water pollution and land pollution (solid/hazardous water).



As per the respondent of Department of Environment, the main challenges that GSPCB faces today is lack of awareness for environment among industrial community. And to overcome these challenge, it suggested that they should change their policy.

C) Sectorial environmental impacts and perception/reaction of firms

Steps taken by firms to deal with possible environmental impacts:

As can be seen from table below steps initiated by pharma firms to bring environmental concern on priority list of pharma companies, 54 % respondents stated that their firm have inlcuded it in board room discussions, 26 % mentioned that their firm raised issue with associations, 42 % stated that they get engaged with government/ state pollution control board for the same and while 18 % stated that they interact with other firms.

15.15 % of the respondents did not know what steps have been taken by their firms on the issue. More number of medium size firms have included the discussion of environmental concern in board room discussion than small and large size firms. The respondents of small size firms were less aware about the steps taken by their firms on environment concern issue than respondents of medium and large size firms.

Table 9: Steps initiated by pharma firms on its own to bring environmental concerns on the list of priority issues



No. of Responses

No. of Responses

No. of Responses

%

Including it in boardroom discussions

19 16 19 54 54

Raising the issue with the association

9 5 12 26 26

Interacting with other firms 7 5 6 18 18

Engaging with the Government/State Pollution Control Board

13 13 16 42 42

Don't know 15 3 3 21 21

Total 100 respondents

(Multiple Answers) Knowledge about regulatory actions taken by SPCB:

More than half (51 %) of the respondents were not aware of actions taken by GSPCB on any of the pharma firms on account of environmental impact. 47 % of the respondents were aware of action taken by GSPCB on pharma firms.

Table 10: Knowledge about regulatory action taken by the SPCB on account of environmental impacts against firms



No. of Responses

No. of Responses

No. of Respons

es

%

Yes 22 12 13 47 47.00

No 26 14 11 51 51.00



Did Not Answer 0 0 2 2 2.00

Total 48 26 26 100 100.00

The IDMA respondents were not aware about regulatory action by SPCB against any of the members.

Opinion on GPCB actions & its impact on pharma firms:

Of those who were aware of such actions 44 % find action of SPCB justifiable. In term of impact of actions of GPCB on business of firms (45.88%) find it as a monetary loss, 39 % find it can lead to bad reputation of the firm and 25 % feel it as action taken by government.

Table 11: Opinion on SPCB actions as Justified?

Type of firms

Small Medium Large Total


No. of Responses

No. of Responses

No. of Responses

%

Yes 19 13 12 44 44

No 2 0 1 3 3


Table 12: Impact of SPCB actions on firms’ business



No. of Responses

No. of Responses

No. of Responses

%

Monetary loss 17 12 10 39 39

Action taken by government

7 5 6 18 18

Bad reputation 9 9 7 25 25

Others 1 1 1 3 3

Total 100 Respondents (MCQ)

Steps to improve environmental performance / reduce adverse impacts:

Of the total respondents, 62 % pharma firms stated that their firms do not outsource manufacturing pharmaceuticals while rest 38 % stated they do. Of those who outsource, 31 % stated that their firms before entering into contract ensure that those whom they are outsourcing are following environmental concerns and are GMP compliant and 9 % stated that their firms encourage those who do not follow, while 13.04 % use other measures to ensure adherence to environmental regulations by outsourced firms.

Table 13: Outsourcing by pharma firms for manufacturing of pharmaceuticals



No. of Responses

No. of Responses

No. of Responses

%

Yes 16 8 14 38 38.00

No 32 18 12 62 62.00

Total 48 26 26 100 100.00



Table 14: Measures taken by firms to ensure that the contract manufacturer complies with environmental regulations



No. of Responses

No. of Responses

No. of Responses

%

Before entering into any contract, it is made sure that the firm is following all environmental concern and is GMP compliant

9 8 14 31 31

Firms are encouraged to follow environment related regulation and GMP guidelines

3 0 6 9 9

Others 5 0 1 6 6

Total 38 Respondents (MCQ)

To bring environmental concern in priority list of pharma companies, the IDMA raises awareness of firms, interacts with members and get engaged with government/SPCB. IDMA encourages member firms by framing regulation to initiate activities in the direction of minimizing the adverse effect on environment, interact with SPCB for devising methods for minimizing impacts, and conduct awareness programs on different guidelines related to environmental concerns.

Similarly, ACCII have taken actions/steps like including it in boardroom discussion, raising the issues with members, interacting with associations, and engaging with government/SPCB for the same.

Role of the government in improving environmental impact by pharma firms

80% to 85% respondents stated that they did not receive any assistance from state/central government or association to set up environment department in their firms. Almost all medium size firms (96.15 %) respondents stated that they did not receive any assistance from government. While 2 % respondents stated that their firms received information related to technical requirement as support from the government.

Table 15: Assistance received from the government (State/Central) by pharma firms setting up environment department



No. of Responses

No. of Responses

No. of Responses

%

Monetary help 0 0 0 0 0

Information related to technical requirements

0 0 2 2 2

Others 0 0 0 0 0

No assistance received 32 25 23 80 80





Role of pharma association in improving environmental impact by pharma firms:

12% respondents of the pharma firms stated they they received some support from the Association. It seems more number of large pharma firms got support from the association as compared to the medium and small size firms.

Table 16: Assistance received from the association



No. of Responses

No. of Responses

No. of Responses

%

Yes 4 2 6 12 12

No 43 23 19 85 85



As per IDMA, awareness, plantation and consultation on common effluent treatment plants are the improvements needed to minimize environmental impact of the pharma firms. Financial support, friendly atmosphere and recognized consultant for environment are the kinds of support expected for minimizing the environment impact of pharma firms. IDMA respondent believe that self regulation is the only way out for solving this problem in the long run.

Design and enforcement of regulation should be according to firm size:/ Opinion on regulatory laws vs. nature and size of firms by pharma firms

Majority (72%) of the respondents think that the implementation of regulatory laws should be done depending on the nature of the unit (formulation, bulk) and size of firms (large and SMEs) and while 24 % think it should be done differently. From data it can be learnt that maximum number of small size pharma firms are in favor of implemenation of regulatory action according to the size and nature of pharma firms.

Table 17: Opinion on implementation of regulatory laws according to the nature of the unit (Formulation, Bulk) and size of firms (Large and SMEs)



No. of Responses

No. of Responses

No. of Responses

%

Yes 39 19 14 72 72

No 7 6 11 24 24



IDMA is of the opinion that the regulatory laws should be implemented differently according to the nature of the units and size of firms for environmental issues. GFDCA respondent agrees that the implementation of regulatory laws should be done differently depending on the nature of the unit (formulation, bulk) and size of firms (large and SMEs).

Response of GFDCA for increasing environmental performance of pharma firms in Gujarat:

Action taken by GFDCA: On an average GFDCA gives 50 showcase and 2 closure notices to large size firms, 500 showcase and 10 closure notices to medium and small size firms. In last one year the department sent 40 show cause notices to more than 15 large size pharma firms, they sent 2 closure



notices and 500 cause notices to medium size firms and 8 closure and 500 show cause notices to small size pharma firms in the state.

The main measures taken to enhance environmental performance in the state by GFDCA in last 5 years by SFDCA includes more raids in units i.e. becoming more vigilant to the issue. In term of measures taken in last 10 years along with strict compliance to GMP enforcement of Schedule-M, the FDCA in 2008, introduced software program for manufacturer and sales for product permission. GFDCA respondent believes that these measures yielded positives results such as improvement in quality of drugs supplied by the firms, better compliance to relevant regulations by pharma firms and better communication with pharma firms/collectives on related issues.

Steps taken by GFDCA to address challenges in the state: GFDCA respondents shared that they tried to consult pharma collectives to design a proper roadmap to address challenges they may face in dealing with relevant regulations in the state.

In term of role of different stakeholders, GFDCA respondent stated that pharma firms need to have qualified staff; industrial association needs to organize training and awareness programs; State Government needs to play strong and regular role for enforcement of regulations, SPCB needs to have strict control over the industry and civil society needs to give continuous feedback to all stakeholders to design a proper roadmap to address the challenges in state.

Response of State Pollution Control Board:

According to the respondent of GSPCB there are a total of 5500 pharma units in Gujarat of which 80% are formulation units. There are 6 pharma Special Economic Zones (SEZs) in the state and all are non-functional. It is mandatory for every SEZ to get environment clearance but not a single SEZ is having Environmental Clearance.

As per GSPCB representative, the environmental performance of the pharma sector in Gujarat is “fair” and the performance has changed towards “better” in last 10 years. It has changed due to GSPCB implementing CEPI (Comprehensive Environment Pollution Index) since 2009 in Vapi, Ahmedabad and Ankleshwar, infrastructural reform in the sector, up gradation in production processes and strict enforcement of environmental norms.

GSPCB does not have a separate bifurcation for show cause notices given to pharma companies as they maintain overall figures. GSPCB respondent did not share reports of environmental monitoring undertaken in the state for problematic areas for the last 3 to 5 years.

To address the environmental impacts of pharma manufacturing units in State, measures like issuing notices, meeting with pharma associations, seminars and awareness programs on environment have been done in last 5 years. Similarly for industries issuing notices, giving show cause notices, organizing seminars and workshops, and public awareness are key steps. These measures yielded positive results like improvement in environmental conditions in the adjoining communities, better compliance of environmental standards by pharma firms, innovations regarding improved methods to lower the adverse impact on the environment, and better communication with pharma firms/collectives on environment related issues.

Part of ‘good practices’ initiated by the pharma industry in the state to address adverse environmental impacts, the GSPCB respondent stated that they do not remember much about the same as there are many such initiatives. However they reflected that many small industrial units in the state have started environment department to address the issue.

As per GSPCB respondents the main enabling factors motivation of firms to undertake the good practices includes size/turnover of the firm, location of the firm, initiatives taken by pharma/industry



collectives, approach of the environmental regulator towards pharma firms, initiatives by the CEO/Board Members and push from the consumers/community. According to GSPCB, all the stakeholders of firms, industry association and State Government played an active role in the whole process.

Steps taken by SPCB in consultation with pharma collectives and other stakeholders to design proper roadmap for addressing environmental concerns in the state:

GSPCB respondents stated that they have also tried to consult pharma collectives to design a proper roadmap to address environment related issues in the state. GSPCB respondent suggested that every unit must have an environment policy and a separate cell for improving the responsibility of the pharma industry towards the environment in the state.

GSPCB respondent specifically mentioned that every firm should have a R&D department for environment and industry association should have positive approach in addressing environmental issues. As per the respondent of GSPCB, it gives full support while they do not have any other expectation from State Government and Civil Society in developing a roadmap to address environment related issues in the state.

Department of Environment:

The respondent shared that a State of Environment Report is not prepared for the entire state but the report is prepared for industrial clusters under CEPI. While no reports specifically for the pharma sector and/or Biomedical Waste Management in the State was prepared.

D) Internal capacity of pharma firms on environmental management/CSR

Existence of environmental department in firms:

Of the surveyed, 60 % firms do not have a dedicated Environment Management Department in their firm while 40 % pharma firms have one. As can be seen from table below, almost 80 % large pharma firms have dedicated environment departments, followed by medium size (46.15 %) and small size (14.58 % )pharma firms.

Similary, 80 % pharma firms have environmental infrastructure in place in their firm to reduce the negative environmental impacts of their firm. Among this, 96.15 % pharma firms of large and medium size while 62.50 % small size pharma firms have enrvironmental infrastructure. Overall 13 % firms surveyed do not have environmental infrastructure.

Table 18: Dedicated Environmental Management department in pharma firms



No. of Responses

No. of Responses

No. of Responses

%

Yes 7 12 21 40 40

No 41 14 5 60 60

Total 48 26 26 100 100



Table 19: Availability of environmental infrastructure in place to reduce the negative environmental impacts of pharma firm



No. of Responses

No. of Responses

No. of Responses

%

Yes 30 25 25 80 80

No 11 1 1 13 13


Total 48 26 26 100 100

Strength of internal environmental management department in pharma firms:

Out of total, 29 % respondents stated they have 1 to 5 staff strength in the environment department, while 5 % respondent stated that they have 6 to10 staff and 2 % respondent stated that they have more than 20 staff in environment department. While 59 % respondents did not answer and 3% gave no comments on the subject. In term of budget for environment department, 14 % respondents stated less than 10 lakh INR as budget, 3 % respondents stated 10 to 20 lakh as budget and 10 % respondents stated that they have budget between 20 lakh to 1 crore. While 12 % respondents were not aware of the budget and 59 respondents did not answer.

Corporate Social Responsibility (CSR) in pharma firms:

Of the total, 52 % respondents had knowledge on what constitutes CSR while 47 % respondents did not. The large pharma firm’s respondents had more knowledge about CSR as compared to medium and small size pharma firms.

Only 22 % pharma firms surveyed had a CSR policy in their firm. Of these 57.69 % firms belong to large pharma firms. Maximum number of small size firms (91.67%) do not have CSR policy in their firms, followed by 80.77% medium size firms.

Table 20: Knowledge about what constitutes Corporate Social Responsibility (CSR)



No. of Responses

No. of Responses

No. of Responses

%

Yes 16 13 23 52 52

No 31 13 3 47 47



Table 21: Existence of CSR policy in pharma firms



No. of Responses

No. of Responses

No. of Responses

%

Yes 3 4 15 22 22

No 44 21 11 76 76





Opinion on necessity of having CSR policy by pharma firms:

23 % respondents feel that CSR is necessary as also felt by the proprietor/governing body of the company, followed by 7 % respondents who stated that that CSR policy helps firm/industry to maintain a good image and earn trust/goodwill of the community/society, while 1 % respondents feel that CSR policy should be there as it is a government regulation.

Table 22: Opinion on necessity of having CSR policy



No. of Responses

No. of Responses

No. of Responses

%

It was felt by the proprietor/Governing body of the company

3 4 16 23 23

Government regulations 0 0 1 1 1

Helps firm/industry to maintain a good image

1 1 5 7 7

Earn trust/goodwill of the community/society

1 1 5 7 7

Any other 1 0 0 1 1


Awareness about National Voluntary Guidelines on Social, Environmental and Economic Responsibilities of Business (NVGs):

Majority of the respondents of pharma firms (88%) were not aware of NVGs while 12 % were aware of it. Regardless of size of firms, awareness of NVGs is very poor among pharma firms. Of those who were aware, 19.23 % respondents were of large, 11.53 % respondents were of medium and 8.33 % respondents were of small size firms. Of those who were aware about NVGs, more than half 54.55 % of the respondents heard about it from the media, followed by 36.36 % respondents who heard about it from other sources.

Table 23: Awareness about NVGs



No. of Responses

No. of Responses

No. of Responses

%

No 44 23 21 88 88.00

Yes 4 3 5 12 12.00

Total 100

Where did you hear about them (NVGs)?



No. of Responses

No. of Responses

No. of Responses

%

Through government agencies

0 0 0 0 0.00

Through Association 1 0 0 1 1

Through media 1 3 2 6 6



Others 1 0 3 4 5


The ASSOCHAM respondent was aware of NVGs and he heard of it from the ministry itself. The GSPCB and Department of environment respondents were aware of NVGs, while the DoH&FW respondent was not aware of the same.

Impressions of pharma firms about NVGs:

Of those who were aware of NVGs, 28 % think that NVGs will increase awareness about business responsibility, followed by 6 % who think it will create more clarity on social, environmental and economic responsibilities of business and 20 % think that these will push firms/industry to fulfill their responsibilities towards society.

Table 24: Impressions about NVGs substantive part and operationalization



No. of Responses

No. of Responses

No. of Responses

%

It will create more clarity on Social, Environmental and Economic Responsibilities of Business

1 2 3 6 6

It will push firms/industry to fulfill their responsibilities towards society better

1 2 2 5 20

It will increase awareness 2 2 3 7 28

Will create further ambiguity among firms

0 1 1 2 8

Will make no impact 1 1 0 2 8

Others 1 0 2 3 12


According to the GSPCB respondent, awareness is rising within the business entities, greater interaction with the business associations, and assistance to business entities in incorporation of relevant processes, and innovations are important factors for operationalisation of NVGs.

Similarly the respondent of Department of Environment opined that NVGs helps in better environmental management and addresses the issue more precisely. According to the respondent the challenges in NVG implementation are lack of skilled manpower, financial constraints and environment not being in the priority agenda of the firms.

6. Results related to issues pertaining to social and economic responsibilities of the pharma sector

The study covers 100 pharma firms. Out of them 37 are Bulk Drug manufacturing companies so, they do not have any marketing channels. 62 companies are formulation companies. 1 company did not answer about its M&D channel. Out of 62 formulation companies, only 30 companies were not in direct marketing. They have tied up with direct distributors and do not need any M&D system. Only 32 companies do marketing through MRs. So, the following opinions are from 32 companies.



B) Marketing strategies and their benefits to firms

Strategies adopted for marketing of drugs:

The main strategies adopted by pharma firms for marketing and distribution of drugs in Gujarat as per 77.14 % respondents are though Medical Representative (MR) by visiting doctors, chemists and hospitals. 19% respondents mentioned use of professional middlemen and exporters as marketing and distribution strategy. The use of print and electronic media seems negligible (only 2 %). Irrespective of size of the firms MR plays the main role as marketing and distribution of drugs as per the study.

Table 25: Strategies adopted by Pharma firm for marketing and distribution of drugs



No. of Responses

No. of Responses

No. of Responses

%

Visiting doctors (through MRs)

13 5 10 28 28

Visiting chemists (through MRs)

12 4 10 26 26

Visiting Hospitals (through MRs)

12 5 10 27 27

Professional middlemen, exporters

9 5 5 19 19

Print and electronic media 0 0 2 2 2


Total 47 20 38 105

(Multiple Answers) Criteria for choosing doctors by firms for Marketing and distribution of drugs:

Highest number of respondents (27 %) mentioned that the area of specialization is the key criteria for selection of doctors followed by the experience of doctors (18 % respondents) and their popularity (15 % respondents). The institution with which a doctor is associated does not play a significant role for selection of doctors by firms for marketing and distribution of drugs. For small and large firms popularity of doctor is one of the important criteria for their selection.

Table 26: How are these doctors chosen



No. of Responses

No. of Responses

No. of Responses

%

Area of specialization 11 5 11 27 27

Experience of the doctor 5 4 9 18 18

Popularity of the doctor 7 1 7 15 15

Which institution he is associated with

1 1 0 2 2

Other means 5 0 0 5 5

Total 29 11 27 67

(Multiple Answers)



As per Gujarat State Medical Representative Association (GSMRA) respondent, usually MRs fix visit with doctors directly to identify themselves. To visit a doctor, usually random visits is the procedure followed by MRs.

As per GSMRA representatives meeting with doctors is treated as part of the marketing strategy of pharma firm. Such meetings helps doctors to get information related to new drug in the market, build relationship between doctors and pharma firms and specifically such meeting act as Brand Reminder meetings.

As per the MR study, the strategies for process of getting appointment of doctors for visit, 71.42%

respondents reported fixed visit of doctor every week or month. While 28.57% respondents

mentioned random identification of doctors for visit and 20% respondents reported that they were

visiting on special occasions such as launching of a new drug or providing other relevant information.

There were varying responses in identification of doctors for visit. 37.14% respondents reported

there is a systematic method for identification of doctor to be visited; it is known as ‘Retail Chemist

Prescription Audit’ (RCPA) while 40% respondents reported visiting doctors is fixed. 25.71%

respondents visit doctor randomly while 11.42% respondents coordinate with other MRs for

identification of doctors. As most of the visits are fixed or based on a systematic survey, this is

suggestive of use of scientific method for sales and business promotion.

It is interesting to note that MRs also visit doctors at places other than their clinics. Along with the

call at doctor’s clinic, 11.42% respondents also visit residences of doctor and 20% respondents at

some other place like hotels, restaurants etc. Majority of MRs added that they have to attend the

call at the specific place on demand from doctor. 80 % of the MRs commented that the meetings

with the doctors are treated as a part of the marketing strategy for the pharmaceutical company.

Majority of MR respondents (60%) believed that meeting with doctors imparted the information

related to new drug while 48.57% respondents reported that the meeting helped to build good

relationship between doctors and pharmaceutical firms. This is suggestive of the fact that one of the

goals of the marketing strategy is to build a healthy relationship with the doctors through MRs.

Sponsoring events for doctors by pharma firms:

56.82 % respondents stated that their firm doesn’t sponsor any event (meeting, workshop, seminar, etc.) for the doctors while 43.18% respondents sated their firms does sponsor events. 72.73 % respondents of large firms stated that they sponsor events for doctors followed by 54.55 % respondents of medium and 22.73 % respondents of small pharma firms.

Those respondents who cited not sponsoring events, 39.13 % stated that it as because their firms do not have such policy while 47. 83 % mentioned other reasons.

Table 27: Sponsoring events (meeting, workshop, seminar) for the doctors by pharma firms



No. of Responses

No. of Responses

No. of Responses

%

Yes 5 6 8 19 19

No 17 5 3 25 25



Table 28: Reasons for not sponsoring events for doctors



No. of Responses

No. of Responses

No. of Responses

%

Firm do not have such policy 7 1 1 9 9

These are unethical practices 1 0 2 3 3

Other reasons (No Reason) 8 3 0 11 11

The GSMRA respondent stated that the pharma firms have provisions for organizing (or sponsoring) events (meetings, seminars, workshop, dinner party, education trip etc.) for doctors/private hospital managers.

Benefits accrued to pharma firms from sponsoring events for doctors:

Spread of information about the firm’s product is the main benefit (19 % respondents) expected by sponsoring such events by firms, while as per 16 % respondents it is a part of Continued Medical Education (CME) and for 13 % respondents expect raise in sales target through such sponsorship.

Table 29: Benefits expected by pharma firms from events for doctors



No. of Responses

No. of Responses

No. of Responses

%

Spread information about our products

5 6 8 19 19

Raise sales targets 4 5 7 16 16

Create pressure on Doctors and hospitals

1 0 1 2 2

As part of Continued Medical Education (CME)

3 5 5 13 13

Others 0 0 0 0 0.00

Tendency of doctors to ask for gifts:

Nearly one third (34%) respondents accepted that doctors ask gift from MRs while 56 % respondents did not answer the question at all. Of total respondents, 72.34% respondents find doctors asking gift as a bad conduct on part of doctors. The large firm’s respondents (81.82%) contributed highest to opine that asking gift by doctor is a bad conduct, followed by medium (42.31%) and small size firms respondents (33.33%).

Table 30: Whether doctors ask for any kind of gifts from MRs when the MR visits doctors/hospitals



No. of Responses

No. of Responses

No. of Responses

%

Yes 16 11 7 34 34.00

No 4 1 5 10 10.00

Did Not Answer 28 14 14 56 56.00

GSMRA respondents consented that doctors ask for gifts/incentives from MRs and such gifts are distributed on regular basis and not on only some special occasion.



As per the MR study, 85.7% respondents reported that doctors asked for the gifts or incentives

during call of which 54.28% reported that doctors ask for gifts with a motive to promote a product of

firm, while 45.71% reported that it is general practice. Further, they added that sometimes doctors

do not ask directly but their perceived behavior and body language suggests so.

60% of the MRs reported that pharmaceutical companies distributed gifts and incentives on special

occasions while 40% MR reported that gifts/incentives are distributed on regular basis. This is a clear

indication of the nexus between pharmaceutical companies and doctors of private hospitals.

It is seen that 94.28% MR are visiting the chemists, 31.42% visiting wholesalers/stockists and 5.71%

visiting others for sales promotion, which suggests that the important link of supply chain is involved

in the nexus.

C) Awareness and perception about regulatory laws:

Awareness about Code of Medical Ethics Regulations, 2002 (MCI):

Regarding awareness about Code of Medical Ethics Regulations, formulated by Medical Council of India (MCI) in the year 2002, 35 % respondents were aware, 20 % were unaware of it while 45 % did not answer. Among those who were aware, the highest numbers were from medium size firm’s respondents ( 46.15 %) followed by large size firm’s respondents ( 38.46 %) and small size firms (27.08%).

Table 31: Awareness about Code of Medical Ethics Regulations, 2002, formulated by Medical Council of India (MCI) in the year 2002



No. of Responses

No. of Responses

No. of Responses

%

Yes 13 12 10 35 35.00

No 11 5 4 20 20.00

Did Not Answer 24 9 12 45 45.00

The ASCCII representative was aware of the Code of Medical Ethics Regulations but did not reveal satisfaction nor recommendation for amendments. Similarly, the respondent from GSMRA was aware about it but did not have any suggestion for amendment.

The DoHFW respondent was aware of Code of Medical Ethics Regulations. On satisfaction regarding regulations in its present form, the response was that it needs to be amended and lack or adherence to rule is by MCI.

As per MR study, four- fifths (80%) of the MRs responded that they were aware about the Medical Code of Ethics, 2002. 51.42% of the MRs believed that it was a comprehensive guideline and must be followed by doctors and 40% also added that the government should take steps for strict implementation by doctors. Three MR further added that the code should be restructured in order to include incentive structure.

Initiatives taken by pharma firms to comply with the Code of Medical Ethics Regulations, 2002:

Only 9% respondents stated that their firm took initiative to comply with the code, 2002, while 29 % respondents stated no initiatives are taken by their firms. A large number of respondent 62% did not answer the question.



Table 32: Initiative taken to comply Code of Medical Ethics Regulations, 2002 by Pharma firms



No. of Responses

No. of Responses

No. of Responses

%

Yes 3 1 5 9 9.00

No 13 12 4 29 29.00

Did Not Answer 32 13 17 62 62.00

Awareness about Uniform Code for Pharmaceutical Marketing Practices 2011 (UCPMP):

The awareness of respondents about UCPMP correspond to the size of firms as 56.25 % respondents of large firms were aware of UCPMP followed by 40 % and 19.35 % respondents of medium and small size firms.

Regarding opinion on favoring current form of UCPMP or wanting changes in it, 81 % respondent did not answer the question. Of those who answered, 12 % respondents are fine with its present form and 7 % respondents expect amendments in UCPMP.

Table 33: Awareness about the UCPMP (Uniform Code for Pharmaceutical Marketing Practices)



No. of Responses

No. of Responses

No. of Responses

%

Yes 6 6 9 21 33.87

No 25 9 7 41 66.13

Total 31 15 16 62 100.00

Table 34: Opinion on favor of UCPMP in its present form or wants amendments



No. of Responses

No. of Responses

No. of Responses

%

Yes it is fine in its present form

1 5 6 12 12.00

No, we want some amendment to be made in it

4 1 2 7 7.00

Did Not Answer 43 20 18 81 81.00

The ASSOCHAM respondent was aware of and is fine with it in its present form. They have come up with guideline to follow such codes. However the GSMRA respondent was not aware of UCPMP.

The GSMRA respondent was not comfortable with the existing chain of marketing and distribution of drugs and their current role did not mention any of the concern for that. Similarly GSMRA respondent thinks that the present regulatory set-up is not sufficient and optimal enough to ensure responsible and ethical corporate conduct on the part of pharma firms.

According to the MR study, only 54.28% MRs were aware about UCPMP. 20% MR were in favor of sufficient and optimal present regulatory set-up, while another 20% MR were not satisfied with the present regulatory set-up and added that regulations should be strictly implemented and followed.



MRs should be respected and practices by quacks should be stopped. Importantly, 60% MR did not want to comment on the topic.

Government Departments respondents:

Food & Drug Control Administration:

The respondent was aware of rules/regulations and guidelines like Uniform Code of Pharmaceuticals Marketing Practices (UCPMP). The respondent is of opinion that though awareness is rising amongst the business entities, greater interactions with the business associations, assistance for business entities in incorporation of relevant processes, innovation etc. and creation of a conducive environment by the government by providing incentives and recognition are the factors that can help operationalise above rules /regulations /guidelines in the state.

The DoHFW respondent was unaware of UCPMP.

D) Behaviour of pharma firms in the market and possible determinants

Pharma firms perception about gifts/ incentives:

Among those respondents who said doctors ask for gifts, 42.31 % respondents belong to medium size pharma firms followed by 33.33 % small and 26.92 % large size firms.

Table 35: Opinion about doctors asking gifts/ is it bad conduct on doctor's part?



No. of Responses

No. of Responses

No. of Responses

%

Yes 16 9 9 34 34

No 8 3 2 13 13

Interaction with wholesalers, stockiest, chemists:

24% respondents said that the chemists and wholesalers/stockists or their associations create problems having direct impact upon marketing and distribution of pharma firms while 23% respondents said no to it. More than half ( 53%) of the respondents did not answer the question.

34.62% respondents stated that they conduct meetings with chemists and wholesalers associations, followed by 11.54% respondents who mentioned other steps to deal with this issue. Very few respondents stated that they approach government agencies to resolve the problem.

Table 36: Problems created by chemists and wholesalers/stockiest (or their associations) having direct bearing upon M & D of the pharma firms



No. of Responses

No. of Responses

No. of Responses

%

Yes 12 7 5 24 24.00

No 14 4 5 23 23.00

Did Not Answer 22 15 16 53 53.00



Steps taken (at the firm level/association level) to deal with issue of chemist & wholesalers/ stockiest



No. of Responses

No. of Responses

No. of Responses

%

Meetings with chemists and wholesalers association

5 3 1 9 9

Approaching government agencies to resolve the problem

1 0 0 1 1

Others 3 0 0 3 3

NA 5 4 4 13 13

Accounting of expenditure towards gifts/ incentives by pharma firms:

Most of respondents stated that expenses related to gifts and incentives are booked under the promotion head, followed by marketing head and CME head. There is no significant variance in accounting of such expenses and size of firms.

Table 37: Booking of the expenditures towards gifts, incentives by Pharma firms



No. of Responses

No. of Responses

No. of Responses

%

Promotion 11 7 6 24 24

Marketing 5 4 4 13 13

Advertisement 2 1 1 4 4

CME 0 4 1 5 5

Other heads 2 0 0 2 2

As per GSMRA respondent such gifts are booked by pharma firm under “Gratification” head. MR has to fill the gratification form for the doctor in the company.

Reasons for indulging in unethical behavior ( misconduct) by pharma firms:

The main reason as per 22 % of the respondents for indulging in unethical behavior by pharma firms is to survive in the sector, followed by 19 % respondents who think it is a usual practice, while 12 % think it is to gain new markets and to maximize profits.

Survival in the market, usual practice and maximization profit are key factors leading small size firms to indulge in such practice. While for medium size firm survival in market and usual practice are key factors. The large firm’s respondent stated usual practice and survival in market are key factors for them for indulging in unethical behavior.



Table 38: Main reasons for pharma firms to indulge in such behavior to push their products into the market



No. of Responses

No. of Responses

No. of Responses

%

To maximize profit/bottom line

8 4 1 13 13

To gain new markets/more customers

5 5 2 12 12

It is a usual practice among the firms

9 6 4 19 19

To survive in the sector 9 10 3 22 22

Other 2 0 2 4 4

IDMA Responses on Marketing issues:

As per IDMA, the factors responsible for “incentive regime” in pharmaceutical industry in Gujarat, are incentives by pharma firms and business strategy of private hospitals. The IDMA does not have a mechanism to monitor the marketing strategy of member firms. In term of misconduct by members and its interpretation by the association, they stated it will be considered as the firm is marketing spurious medicines, providing incentives to doctors and neglecting licensing requirements. In such cases the association does not take any major action except discussion of the matter in the meeting of association. Such issues are not taken up by the association to discuss with the government. None of the members of IDMA association have complained about doctors asking for gift from MR.

As per IDMA respondent most of the members of their association are aware of regulations and authorities dealing with the phamaceutical industry. The association designatory feels the present regulations in pharma industry are appropriate to ensure good conduct from pharmaceutical firms.

ASSOCHAM responses on Marketing and distribution:

As per the ASSOCHAM representative, the ethical concerns relating to the existing ‘Incentive Structure’ between private healthcare and pharmaceutical sector includes incentives extended by pharma firms for profit maximisation, deviation of doctors from their ethical conduct for seeking such incentives, and weak regulatory framework dealing with marketing and distribution of pharma firms. The association has not come up with any state/locality-specific instrument (code/manual/guideline etc) to keep a track of the role of their members in the prevailing marketing and distribution chain of drugs.

GSMRA response:

As per GSMRA representatives, “incentive regime” in pharma industry is contributed mainly by business strategy of pharma industry, commercial motivation of doctors, and weak regulatory framework.

Responses of Government respondents:

Gujarat Food and Drug Control Administration (GFDCA):

GFDCA acknowledges that there are certain ethical concerns related to marketing and distribution chain of pharmaceutical firms. The respondent shared that incentive by the pharma firms, commercial motivation of doctors, lack of pro-activeness of the private hospitals and business strategy of private hospitals have contributed to the present incentive regime in the pharmaceutical



industry rather than factors like weak regulatory framework/institution dealing with the incentive structure.

The respondent shared that providing inputs to central level agencies for framing adequate policies and regulation, strict enforcement of central level policies/rules/regulation, regular interaction with pharma industry and healthcare sector to discourage them from adopting unfair means for marketing and distribution, regular monitoring of pharma firms and regular interaction with other stakeholders related to marketing and distribution of drugs should be the role played by GFDCA to deal with the issues related to incentive structure in pharmaceutical industry.

SFDCA agreed that some firms have been found to indulge in unethical ways of promoting their products but did not mention any step taken for the same.

Department of Health and family welfare:

The respondent acknowledged ethical concerns relating to the ‘Incentive Structure’ associated with the interplays among different actors i.e. drug manufacturer, stockist, wholesaler, chemist, medical representative, doctor involved with marketing and distribution chain of drugs.

Regarding the main problems related to marketing and distribution of drugs in pharmaceutical industry, the respondent was of the veiw that expensive drugs are pushed into market through incentives to persons whereby unnecessary diagnostic/investigative procedures are carried out.

The respondent feels that the main challenges GFDCA are lack of trained manpower, obstacles in implementation of rules and regulations and lack of awareness of judicial system about implications of violations of pharma rules. The respondent said that GFDCA is a part of the health department in Gujarat and the department feels that GFDCA has some powers for actions and these challenges can be overcome by GFDCA.

The respondent shared that the department does prepare situation reports on Pharma sector in the State. Accordingly to the respondent, Association of Pharmaceutical Firms should be directly dealing with the issues related to marketing and distribution of pharmaceutical firms. The respondent felt that these regulations are “moderately” effective for ensuring good corporate conduct from the part of pharmaceutical industry.

E) Behaviour of MRs and impact on misconduct of providers:

Remuneration of Medical Representatives:

67.65% respondents did not answer about salary structure of pharma firms for MR. 24.51% respondents stated “fixed+based on target” (percentage of target achieved) as the structure of the remuneration being paid to the MRs, followed by “fixed” ( 6.86 % respondents). Only 0.98% respondent stated that “sales target” as the only base for salary for MR.

Similary 69 % respondents did not answer whether they want to fix the salary of MRs while of those who answered, 25 % respondents are not in favor of fixing salary while only 7 % are of in favor of fixing the salary.

Table 39: Structure of the remuneration being paid to the MRs of Pharma firms



No. of Responses

No. of Responses

No. of Responses

%

Fixed 3 1 3 7 7



Based on sales target only

1 0 0 1 1

Fixed + based on target 12 6 7 25 25

Any other 0 0 0 0 0.00


Table 40: Willingness of Pharma firms to fix the remuneration part for MRs



No. of Responses

No. of Responses

No. of Responses

%

Yes 4 2 2 8 8.00

No 12 4 8 24 24.00

Did Not Answer 32 20 16 68 68.00

The GSMRA respondent stated “Fixed+ Target based” is the most common form of incentives for MRs employed by pharma firms and they think “fix remuneration” would be more stable option for MRs.

As per the MR study, majority of MRs (71.42%) were being paid on the basis of target achieved plus

fixed salary. 57.14% MRs were in favor of fixed remuneration for MR irrespective of target.

Opinion about focus on sales target that may result in unhealthy interaction with providers:

72 % respondents did not give any opinion on whether the focus on sales target to assess performance may result in unhealthy interaction with providers (doctors, hospitals). 20 % respondents opined that focus on sales target does not result in unhealthy interaction with providers while 8 % respondents think it may.

Table 41: Opinion about focus on sales target to assess performance may result in unhealthy interaction with providers (doctors, hospitals, etc.)



No. of Responses

No. of Responses

No. of Responses

%

Yes 4 2 2 8 8.00

No 11 4 5 20 20.00

Did Not Answer 33 20 19 72 72.00

Discussion of Incentive structures and ethical concerns in meetings of associations/with government agency:

As per 35 % of the respondents, in association’s meeting discussion on incentive structures and ethical concerns does not take place while only 5% respondents think it is discussed. 60 % respondents avoided to comment.

As per 38 % respondents, discussion on incentive structures and ethical concerns does not take place with government agency while only 3% respondents think it is discussed. 59 % respondents avoided to comment on the same.



Table 42: Discussion of Incentive structures and ethical concerns in meetings of associations



No. of Responses

No. of Responses

No. of Responses

%

Yes 2 1 2 5 5.00

No 17 10 8 35 35.00

Did Not Answer 29 15 16 60 60.00

Table 43: Discussion of Incentive structures and ethical concerns with government agency or government agency raised this issue



No. of Responses

No. of Responses

No. of Responses

%

Yes 3 0 0 3 3.00

No 16 12 10 38 38.00

Did Not Answer 29 14 16 59 59.00

Regarding structure of incentives, GSMRA respondent stated that they have taken steps like meeting with pharma association to raise the matter, discussed with government bodies and conducted awareness program for MRs for the same.

7. Conclusions

The research concluded that a high number of pharmaceutical firms are aware about the Good Manufacturing Practices’ (GMP) norms set under the Schedule M of the Drugs & Cosmetics Act, 1940 and similarly a high number of them also practice the same, which indicates positive business responsibility among pharma firms in Gujarat.

Financial constraints in implementing GMP is a major concern among the firms and they look forward to government to support that as well as build their capacities. Similary the proactive role of pharma association is expected on sharing of the concern of pharma firms with the government as well as monitoring the practices by members.

Impact of pharma firms on environment is not highly recognised by the pharma respondents. The reason could be that a majority of them are bulk drug producers. However, for those who are in formulations business, there also the respodents find it very less contributing. The impact of pharma on occupational health is very little as indicated by the pharma firms. These issues need to be further validated as in most cases almost half of them have said no impact or not responded at all.

It seems the environmental issueshas not taken the space required in board rooms of pharma firms but more emphasis on the same is needed as very few of them have raised the concern at association level which means collective concern is lacking. While all the government departments confirm the fact that pharma industry does contribute to the environmental issues.

The action of SPCB in case of non compliance has been taken positively which shows respect for following rules and regulations by pharma companies. This is also reflected in the care taken by pharma companies while outsourcing to other for manufacturing. Self regulation by pharma firms is the best strategy for following environmental concerns as per all the stakeholders consulted.



Similarly instead of uniform regulation for all, regulation in accordance with size of firms is expected by pharma firms and is also supported by other stakeholders. The state government’s role to assist pharma firms to follow the environment rules seem very less.The present situation calls for relook at the current structure and systems for delivering support to pharma firms by government.

The associations related to pharma sectors in state seem inactive and less supportive to its members. While pharma firms expect the association to play the role of interacting with government as well as to keep updating them on technical aspects for environmental compliance.

High level of awareness on corporate social responsibility among pharma firms as well associations along with initiatives taken by them but unawareness on National Voluntary Guidelines is also evident which raises questions on real intention of the pharma firms to be socially responsible.

The existence of unethical practices is confirmed to a large extent by all stakeholders but in the name of marketing strategy or means to survive. Seeking doctor’s favor for promotion of products is almost accepted by all stakeholders yet all of them blame the doctors forgetting that such practices cannot sustain if two stakeholders are not involved in it. Awareness about ethics is high but implementation initiative is very low.

It is proven that incentive structure has direct link with unethical practices in the pharma sector especially in the context of doctors and medical representatives. The study further validates the nexus between doctors and pharmaceutical firms through the medical representatives.

Thus it seems the pharma sector is aware of social responsibilities but ignorance is prevalent from responsible business perspectives.

There is no significant difference observed in term of compliance to environmental norms or awareness about different regulatory framework.

8. Recommendations

8.1) For State government (policy and practices):

State government needs to play a strong and regular role for enforcement of regulations

The state government needs to be more vigilant about the environmental issues created by pharma industries.

The state government needs to be proactive and promote ways and means to more interaction with all different stakeholders to address the issues in an amicable manner especially by involvement of associations in framing policies.

The states also need to take more responsibility of building capacity of industries in term of knowledge.

The state government needs to have more financial resources to minimize impact on the environment especially for small scale firms.

The nexus in marketing practices needs to be brought under control by specific policy directives and adherence to it need to be monitored more closely.

A mechanism needs to be created for greater dissemination of information among stakeholders.

The state government needs to put in place both positive and negative incentive schemes for pharma firms to increase adherence to environmental compliances.

Sector specific report of pharma firms and its contribution to environment should be initiated by the state pollution control board.

Funds should be available for implementation of cleaner technologies.



The government need to think on framing rules and regulations as per the size and nature of the pharma firms.

8.2) For Pharma Industries:

There is a greater need to update the decision makers on the social responsibilities.

The industry needs to build its capacity on the impact on environmental issues and needs to allocate funds for proper implementation of the Acts.

The industry needs to translate its understanding on social responsibility through voluntary acceptance of NVGs

8.3) Pharma Associations:

The association needs to be more proactive and in the forefront to act as a facilitator as well

as controller for following up environmental issues and controlling unethical practices.

Pharma association should have regular interactions with government regarding problems

faced by firms on following GMP and other environmental issues.

The association needs to develop internal guidelines for better performance and adherence

of members to rules and regulations.

Documents

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