SME Pharma Exporters Oppose Mandatory Implementation of Barcoding

Indian small and medium size pharma companies account for 40% of total drug exports. SME Pharma Industries Confederation (SPIC), which has 3,000 pharma exporters, has opposed the order of Director General of Foreign Trade (DGFT), which says that there should be mandatory implementation of bar coding on all medicine consignments. They claim that this decision taken by the centre, which is to take effect from 1st July this year, will not serve the problem of combating the entry of spurious drugs.

According to the pharma exporters, this measure will increase the cost of inputs in pharma companies and will wipe out the SMEs in the pharma industry from the highly competitive world market. There are about 6000 SMEs in Indian pharma industry, which account for 40% of exports, i.e., for about Rs. 20,000 crore.

SPIC has said that the Indian SMEs in the pharma industry are already facing tough competition from China in terms of exports and if these guidelines come in to effect, the costs of Indian products will be increased, which will lead to decline in exports.

Not only SPIC, but also the bar coding company appointed by the government too has agreed that bar codes cannot prevent fake or false drugs. They are much more easier to replicate than credit cards.

The cost that will be incurred by each SME, for bar coding the strips will be around Rs.20,000 only for registration and the extra recurring expenses will cost about Rs.1 lakh per month for bar coding. Apart from the above costs, an investment of Rs.1 crore is required for installation of machines per packing line. It is said that though the extent of spurious drugs is just 0.003 percent only (according to Central Drugs Standard Control Organization), the costs of inputs required for bar coding are very much high and this may hand over the export market to China or other multinationals.