Govt spending Rs 4m per month on defunct NDL

KATHMANDU, Nov 3: The state coffer is bleeding Rs 4 million every month due to the government´s failure to take timely decision on the fate of Nepal Drugs Limited (NDL), which has remained shut for almost two years now.



The NDL -- the state-owned pharmaceutical company -- was closed down after the Department of Drugs Administration (DDA) prevented it from manufacturing medicines, stating that it was not adhering to Good Manufacturing Practice (GMP) recommended by the World Health Organization (WHO).[break]



But all this while, the government has been providing Rs 4 million per month to the company to cover the salary of almost 280 staff members, who are earning money for doing nothing.



“The government should either rebuild the company based on the GMP standard or close it down,” an official of the Ministry of Industry (MoI) told Republica. “The government cannot continue distributing tax payers´ money like this.”



The GMP is a set of guidelines that among others outline production aspects so that companies do not compromise on quality while manufacturing drugs. Since Nepal´s pharmaceutical regulator - the DDA - also uses WHO´s GMP to gauge the standard of drug companies´ production facilities, it had instructed the NDL to shut down its operation unless it upgraded its manufacturing unit.



Following this, the Ministry of Industries (MoI), which oversees the NDA, appointed a consultant to conduct a study on investment required to upgrade the production facility. The consultant has suggested that the government inject at least Rs 560 million into the company to purchase new machinery and renovate physical infrastructure so as to meet the GMP standard. The study has said the NDL can recoup the amount within five years of resuming operation.



The study has also identified the need to lay off at least 200 staff members who do not have the required academic qualification to work at a pharmaceutical company. As per the GMP standard, an employee working at a pharmaceutical company should have a high school (SLC) degree. However, more than 200 of 279 employees at the NDL have not passed grade 10.



To send these staff members off with a golden handshake, the company requires another Rs 200-Rs 300 million, according to the MoI official.



“We had forwarded the recommendations prescribed by the consultant to the Ministry of Finance (which is responsible for releasing the budget) in the beginning of July,” the MoI official said. “But we haven´t heard from them.”

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