MSME pharma firms and Schedule M compliance, other top stories
This week, SMBStory explored the pharma industry's pivotal decision-making phase – balancing compliance and financial considerations, along with other SMB stories.
The recent announcement by Mansukh L Mandaviya, the Health and Family Welfare Minister, regarding the gradual implementation of Schedule M for pharmaceutical Micro, Small, and Medium Enterprises (MSMEs), sent shockwaves through the industry.
According to some small pharmaceutical companies who preferred to remain anonymous, the stringent enforcement of Schedule M for MSMEs would necessitate substantial investment in infrastructure.
They express concerns about the financial burden and the lack of necessary infrastructure to comply with each rule, which could cost crores of rupees. They believe that subsidies will ease the burden on small companies if revised Schedule M is enforced.
Dr RN Gupta, Vice President and Divisional Chairman at The Indian Pharmaceutical Association, explains that every time there is an announcement of the implementation or enforcement of GMPs in Schedule M, MSMEs tend to worry. The problem lies in both the lack of funds and negligence in the production process.
Amit Chawla, Director at Indore-based McW Healthcare, acknowledges that Schedule M is stringent. It covers regulations on laboratories, infrastructure, air handling units, and many other aspects. Implementing these regulations will be tough; however, human health should never be compromised, regardless of the challenges, he says.
"I think what we need as pharma companies is a centrally subsidised scheme and access to loans," he adds.
Many manufacturers compromise on quality to match lower prices. While quality should never be compromised, competitive pricing has affected product quality.
Other top picks of the week
The Potbelly
Despite the high failure rate of restaurants, The Potbelly has defied the odds by sustaining itself for the past ten years, all while specialising in a niche cuisine.
In 2012, The Potbelly started as a small restaurant serving Bihari cuisine in Delhi's Chanakyapuri and gradually gained popularity. Its breakthrough came in 2015 when the Resident Commissioner of Bihar invited founder Puja Sahu to open an outlet in Bihar Niwas, making it the first independent restaurant in a state-owned establishment.
Since then, The Potbelly has been expanding, and Sahu attributes its success to its dedication to serving authentic Bihar cuisine, inspired by her mother’s cooking
The menu offers an array of vegetarian and non-vegetarian dishes along with the famous litti-chokha. Mustard-based-gravy fish dishes, as well as renowned mutton preparations like Champaran and Ahuna mutton made in earthen pots, are some of the loved delicacies, the founder says.
With substantial expenses like kitchen costs, rent, utilities, and staff salaries, it takes around two years for restaurants to break even.
The Potbelly achieved a breakeven point within a year after opening its first small restaurant. However, for the successive outlets, it managed to become profitable after two years of opening each new outlet.
The business has remained bootstrapped, reinvesting profits to fuel growth, according to the founder.
Sara Beauty
In response to the increasing demand for organic products, Visage Beauty & Healthcare, the parent company of beauty brand O3+, is revamping its organic beauty and skincare brand, Sara Beauty.
Sara’s product line diverges significantly from O3+. While O3+ focuses on skin solutions, Sara's products are consciously developed with sustainability in mind, prioritising natural and ayurvedic ingredients.
“O3+ does not meet the demands for natural and sustainable products, and it is not recognised for that aspect in the market,” says Vidur Kapur, Director, Visage Beauty & Healthcare Pvt Ltd. It also differs from O3+ in terms of pricing. The decision to revamp Sara and position it as a brand alongside O3+ was primarily driven by this factor.
Sara will offer ayurveda-certified products alongside other natural skincare offerings, capitalising on the rising demand for Ayurvedic products. Last year it obtained an AYUSH licence from the Ministry of Ayush.
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