Price preference for Orissa pharma units

To provide marketing support in government procurement of drugs to the local small and medium enterprises in the pharmaceutical sector, the Orissa government plans to offer 10 per cent price preference to these units.

The decision to offer the 10 per cent price preference to the pharma SMEs in government procurement of drugs is a part of the new MSME (micro, small and medium enterprises) development policy. The policy is set to be finalised soon by the industries department of the state government.

According to the price preference mechanism documented in new MSME development policy, pharma SMEs in the state can offer a procurement price, which is ten per cent higher than the price offered by large pharma companies, domestic as well as overseas. The price preference will be applicable to 50 per cent of the total procurement of drugs by the state government.

“The pharma SMEs in the state are at a disadvantage vis-à-vis the large pharmaceutical companies which offer a lower price for their products. The proposed 10 per cent price preference mechanism will help the pharma SMEs grab a greater share of the government drug procurement, “ Hemant Sharma, director, industries department of the Orissa government told Business Standard.

Currently, pharma SMEs in the state have only 10 per cent share in government drug procurement, estimated at Rs 30 crore per annum.

The new MSME development policy has proposed a venture capital fund to be floated by the state government with a corpus of Rs 50 crore for providing financial assistance to the MSMEs and later on financial institutions like Orissa State Financial Corporation and Small Industries Development Bank of India will be roped in as financial partners for this fund. At present, PSU banks like Bank of India and Bank of Baroda are offering credit to the pharma SMEs in the state.

“We aim to help the pharma SMEs in technology upgrade and also assisting them to adopt good manufacturing practices,” Sharma added.