The recent hike in the drug manufacturing licence fee and product inspection fee could badly hit several small scale drug units in Tamil Nadu. According to industry sources here, the steep hike in the licensing fees has come at a time when the industry in the state is reeling under tight market conditions with many companies on the brink of closure.
The drug manufacturing licence fee in the state has been raised from Rs. 1500 to Rs. 5000 per product. The new rate for product inspection is pegged at Rs. 300 per product if a company manufactures more than 10 products. If a company manufactures less than 10 products, the inspection rate is Rs. 250 per product. The Drug Administration, Tamil Nadu claimed that the hike in the respective fees has been warranted for the fact that the respective fees have not been hiked for more than a decade.
The Drug Administration is of the opinion that the hike in the fees is no deterrent to the companies in that the latter should be able to pay the licence fees from the market share they have achieved for their products over the last few years paying the fees that prevailed a decade back. What companies are worried is that the renewal of licences is coming up this December. With bad market conditions and intense competition, these units would find it difficult to pay the licence fees.