Pharma MSMEs Face Shutdown Threat Amid Rising Regulations
Newz Daddy Business Updates
The Drug Marketing and Manufacturing Association (DMMA) has raised alarms about the increasing regulatory pressures on small and medium-sized pharmaceutical enterprises (MSMEs) in Gujarat. These regulations, including mandatory bio-equivalence studies and the Revised Schedule M, are imposing significant financial burdens on MSMEs, potentially leading to widespread closures and a decline in India’s pharmaceutical exports.
Over 30 pharmaceutical associations have collectively appealed to Union Health Minister JP Nadda and the Central Drugs Standard Control Organisation (CDSCO), highlighting the challenges faced by MSMEs. A key concern is the recent directive mandating bioequivalence studies for each drug formulation, with costs ranging from ₹20–40 lakh per product. MSMEs, which may have dozens of formulations, find compliance financially unviable.
The lack of officially notified reference products, the high cost of studies, and ethical concerns make compliance impractical for small units. Without urgent relief, thousands of units may collapse, leading to medicine shortages nationwide. The association stresses that constant rule changes and stringent compliance demands threaten to destabilise India’s position as the “Pharmacy of the World.”
The association has called for an end to the constant issuance of regulatory circulars that make operations unpredictable and capital-intensive. They raised alarms over the Revised Schedule M (Good Manufacturing Practices) requirements, slated to come into effect from January 1, 2026. The expanded scope and costly upgrades, notified without accommodating the objections of the MSME sector, could force 4,000–5,000 units to close. They demand that the deadline for companies with a turnover of less than Rs. The 50 crores will be extended until April 2027.
DMMA objected to risk-based inspections that selectively target MSME units while sparing large corporates, and to the practice of shutting down plants merely based on a manufacturer’s own corrective action report if no critical lapses are found.
DMMA President Amit Thakkar emphasized that micro, small, and medium enterprises are the backbone of India’s pharmaceutical industry but are being burdened by an endless stream of regulatory circulars that run counter to the government’s own Ease of Doing Business agenda. While MSME manufacturers will be hit the hardest, these measures will also create shortages of affordable medicines and erode export competitiveness, allowing other countries to overtake India in global markets.
The association demanded simplification of the Export NOC process, stating that the current process is delaying shipments and causing the country to lose business to competitors such as China, Bangladesh, and Vietnam, even though exports are not governed by the Drugs & Cosmetics Act.
DMMA General Secretary Vikram Chandwani warned that each of these issues places an enormous strain on companies that have supplied quality, affordable medicines for decades. Without immediate regulatory relief, a large number of MSME pharma manufacturing units will be forced to close, leading to job losses and a decline in exports, putting the future of the Indian pharmaceutical industry at risk.
The association also called for a fairer process for the monthly publication of Not of Standard Quality (NSQ) data, which it says tarnishes reputations without giving companies the chance to respond, and requested that a Standard Quality list be released alongside.
Gujarat, home to approximately 3,000 pharmaceutical manufacturing units, over 90% of which are MSMEs, accounts for a third of India’s pharmaceutical turnover and 28% of exports. DMMA noted that these units worked tirelessly through crises, including the COVID-19 pandemic, to ensure the supply of medicines.
If relief isn’t provided, MSME associations plan a two-day nationwide shutdown/strike of pharma production. DMMA clarified that they are not asking for leniency on quality but are seeking fair timelines, genuine consultations, and regulations that do not destroy the entire sector.
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