New GMP guidelines for pharma may lead to rise in capex, consolidation
9 March 2025 10:01 AM IST
According to reports, there are more than 8500 small and medium manufacturers with less than Rs 250 crore turnover in the pharma sector
The new guidelines came into effect for large pharmaceutical manufacturers from June 2024. (Representational image)
Chennai: The implementation of Revised Schedule M guidelines for small and medium pharma companies by the end of this year will increase the capex requirements of the industry. This may also lead to gradual consolidation in the sector.
The new guidelines came into effect for large pharmaceutical manufacturers from June 2024. However, the government had extended the deadline for the small and medium manufacturers to December 31, 2025.
The revised guidelines intend to ensure that compliance is on par with global standards, especially to those by WHO.
Apart from seeking validation for the products, the new guidelines insist on ensuring that the buildings, processes, equipment, and supporting utilities have been designed, constructed and installed in compliance with good manufacturing practices requirements.
This will entail deployment of additional capital for small and medium manufacturers. SMEs with paucity of funds may also look at opportunities to sell off their businesses or enter into joint ventures with other players.
“Revised Schedule M guidelines need to be implemented by December 31, 2025, by small and medium manufacturers. This may result in incremental capital expenditure (capex) requirements and additional expenses towards maintaining compliance and can lead to gradual consolidation within the industry. With growing generics and trade generics volumes, developments across the regulatory landscape remain a key monitorable for the industry,” finds ICRA.
According to reports, there are more than 8500 small and medium manufacturers with less than Rs 250 crore turnover in the pharma sector. Of this, around 2000 manufacturers have the certification and the others will have to make the required changes.
Compliance of Revised Schedule M guidelines has not been a major worry for large manufacturers who have been into exports, especially to the US, as they have been following US FDA specifications in terms of GMP. However, SMEs may find it tough to elevate their facilities to the specified standards.
The new guidelines came into effect for large pharmaceutical manufacturers from June 2024. However, the government had extended the deadline for the small and medium manufacturers to December 31, 2025.
The revised guidelines intend to ensure that compliance is on par with global standards, especially to those by WHO.
Apart from seeking validation for the products, the new guidelines insist on ensuring that the buildings, processes, equipment, and supporting utilities have been designed, constructed and installed in compliance with good manufacturing practices requirements.
This will entail deployment of additional capital for small and medium manufacturers. SMEs with paucity of funds may also look at opportunities to sell off their businesses or enter into joint ventures with other players.
“Revised Schedule M guidelines need to be implemented by December 31, 2025, by small and medium manufacturers. This may result in incremental capital expenditure (capex) requirements and additional expenses towards maintaining compliance and can lead to gradual consolidation within the industry. With growing generics and trade generics volumes, developments across the regulatory landscape remain a key monitorable for the industry,” finds ICRA.
According to reports, there are more than 8500 small and medium manufacturers with less than Rs 250 crore turnover in the pharma sector. Of this, around 2000 manufacturers have the certification and the others will have to make the required changes.
Compliance of Revised Schedule M guidelines has not been a major worry for large manufacturers who have been into exports, especially to the US, as they have been following US FDA specifications in terms of GMP. However, SMEs may find it tough to elevate their facilities to the specified standards.
( Source : Deccan Chronicle )
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