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Shardul Nautiyal, Mumbai January 07 , 2021
In order to promote the manufacturing and production of pharmaceutical goods and services in India, the Department of Pharmaceuticals (DoP) has issued revised guidelines of Public Procurement Order (PPO) 2017 for the procurement of goods and services in pharma formulations. The move will further encourage ‘Make in India’ and will enhance income and employment in the country.

“This will be a big boost to Indian pharmaceutical companies which will now get preferential treatment as per the DoP and DPITT guidelines,” said All Food and Drug and License Holders Foundation (AFDLHF) president Abhay Pandey.

The Department of Pharmaceuticals (DoP) had earlier in the month of November, 2020 issued revised guidelines for implementing the provisions of public procurement (preference to Make in India) Order (PPO)- 2017 DPITT guidelines for procurement of Make in India medical devices.

The revised guidelines on pharmaceutical formulations specifies local content which implies the amount of value added in India should be the total value of the item procured, excluding net domestic indirect taxes and the value of imported content in the item including all customs duties as a proportion of the total value in per cent.

In an exercise of provisions of para 5 of PPO 2017 revision dated September 16, 2010, of DPIIT the minimum local content for pharma formulations are fixed as Class I local supplier means a supplier or service provider whose is goods, services or works offered for procurement has total contents equal to or more than 80 per cent. Class II local supplier is a supplier or service provider, whose goods, services for work offered for procurement has local content more than 50 per cent, but less than 80 per cent.

Non-local supplier is a supplier or service provider whose goods, services or works offered for procurement has local content less than or equal to 50 per cent.

The Class I local supplier at the time of tender bidding or association shall be required to indicate the percentage of local content and provide self-certification that the item offered meets a local content requirement for class I local supplier or Class II local supplier as the case may be. They shall also give details of the location at which the local value addition is made
In cases of procurement for a value in excess of Rs. 10 crore, the class I local suppliers or class II local suppliers shall be required to provide the certificate from the statutory auditor or cost auditor of the company in the case of companies or from a practising cost accountant for practising chartered accountant giving the percentage of local content.

A committee is also being formed for independent verification of self-declaration and auditors accountant certificate on a random basis and in the case of complaints.

It comprises of chairman and MD of Karnataka Antibiotics and Pharmaceuticals Limited(KAPL), member representation from National Institute of Pharmaceutical Education and Research (NIPER), Ahmedabad, member representation from National Pharmaceutical Pricing Authority (NPPA), member representation from Central Drugs Standard Control Organisation (CDSCO) and a member – Joint Director Pricing, Department of Pharmaceuticals (DoP).

“In case of reference of any complaint by the concerned bidder, there would be a fee of Rs two lakh for one person of the value of the pharma formulations being procured (subject to a maximum of Rs five lakh), whichever is higher to be paid by way of a demand draft, which needs to be deposited with the procuring entity along with the complaint by the complainant. In case the complaint is found to be incorrect, the complaint fee shall be forfeited. In case, the complaint is upheld and found to be substantially correct, the deposited fee of the complainant would be refunded without any interest,” stated the order.

The above-mentioned guidelines will be applicable to all the Central sector schemes and centrally sponsored schemes for procurement made by states and local bodies in project or scheme, which is fully or partially funded by the Government of India.

The order further mentioned that all other provisions of Public Procurement Order 2017, as revised by the DPIIT, will be applicable and needs to be adhered by all procuring agencies for procurement of any pharma formulations. And the guideline will remain applicable until further orders, from the date of issuance.

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