Tag Archives: general

There’s much more than money that a professional wants.

Money is often called the fuel for living. No wonder it is an important part of employment. But if it was that simple, no HR strategies would have had to exist. A lot of things that do not involve monetary compensation can also affect an employee’s will to work. Here are a few things that employers can do:

motivate

Offer cool job titles

Job titles endow every employee with a sense of importance, while making their position unique in the organisation. It is also what employees would identify themselves as, inside and outside the country. Assigning a job title they love to be associated with goes a long way in boosting employee pride and zeal to work.

Provide encouraging work environment

An encouraging work environment has a positive effect on every employee, right from the top of the pyramid, to the bottom. Making your office a place your employees would love to spend time in, is key to ensuring that they put those extra after-hours to work. Gaming corners, pantries and sleeping pods serve as additional bonuses to attract talent in droves.

Avoid shifting blame

No one likes being blamed, especially in front of their team. If the problem is not something that grievously injures the reputation or operations of the company, pinning the blame on any employee should be avoided. Instead, they should be made to realise what went wrong. This will make sure they feel more responsible about their performance.

Encourage and appreciate

A pat on the back is always the best catalyst to hard work. It makes the employee feel like his work is being noticed and recognised and motivates him to work better. The scale of the accomplishment is not a priority as every small bit contributes to building a better organisation.

Develop transparent work culture

A transparent company culture is imperative to retain employees. If the employees feel out of the loop with the vision and goals of the company they are working for, there can be a potential loss of synergy between how the employees carry out work, and how the management wants them to perform. Each employee is a part of the company and knowing how their work affects the company as a whole goes a long way in allowing them to perform smarter and better.

Debarshi Nayak | Mumbai | Wednesday, 16 November 2016

(The author is a member of the Product Marketing team at Mettl, one of India’s fastest growing assessment platforms and skill measurement company. Along with writing articles for HR, he has a tendency to tinker with gadgets in his free time and is also vocal about his love for Android.)

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At last, the long-awaited GST Bill (Goods and Service Tax Bill) has cleared the hurdles of both the parliamentary houses. Certainly, it is a turning point for the country because it will not only make the taxation easy to understand but also reduce the malpractices prevalent due to ambiguity and confusion of tax norms.

The GST regime is expected to bring a great boost to the pharmaceutical industry by making the supply chain management efficient and reducing the cost of manufacturing pharmaceutical products. The reduction in the costs will get added to the profit margins which is a good thing for manufacturers.

Since the bill has gone through several rounds of discussions and it was under consideration for more than two years, it is quite obvious that it has come out as the foolproof bill. The government is determined to make it a success by taking all the necessary means. Now the constitutional hurdles are the matter of the past, now corporate world is gearing for understanding the possible impacts of GST on the business.

What all will be subsumed in GST?

Well, the fundamental objective of implementing GST is to reduce (rather eliminate) the long list of taxes and levies. It is the path towards easy and manageable tax liabilities. GST is expected to reduce following tax burdens at the central and state levels.

Central level taxes

Countervailing duty, service tax, central excise duty, additional excise duties, special additional duties of customs, and excise duties under the medicinal and toilet preparations Act 1955 will get abolished by the new taxation system. Also, surcharges on the supply of services and goods will also get abolished.

State level taxes

Sales Tax and VT at the state level, CST, Entry tax, purchase tax, luxury tax, State level entertainment tax (over and above the tax at the local level), taxes on lottery and gamble will be merged under the GST head. Also, surcharges on the supply of goods and services at the state level will also get abolished.

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Impact on the pharmaceutical industry in specific

  • In the current system, specific API or life-saving drugs enjoy the benefit of non-levy of excise duty if they are covered under some specific notification of the Central Excise Law. As the Central Excise Duty will get merged in GST, these life-saving drugs will enjoy the Tax-Free status. The aforesaid goods will enjoy exemption from IGST also in case they are imported.
  • It will be quite interesting to know about the translation of the accumulation of credits when GST is applicable. Since pharmaceutical companies give a high stack into it, the impact will be wholesome.
  • In the existing model of Indirect Tax law, supplies made to a loan licensee enjoy exemption from VAT. It is important that the industrialists get the clarity about the situation post-GST implementation. Also, currently there is no service tax on the processing charge paid to the loan licensee because the process comes under “manufacturing process”.
  • Though the proposed bill assures that the existing benefits will be continued, it is very much important that industrialists make the situation clear.

Finance experts are overwhelmed about GST

Tax experts are unanimous about the fact that there will be a negative impact on the prices as the taxation will increase to 12 percent as against five percent (the existing rate). Also, there will be a need of changing MOUs (Memorandum of Understanding) across the country since area-wise exemptions (the current practice) will be heavily impacted by the GST regime. Thus, consumers may feel agitated initially because they will have to pay more money.

In addition to it, the bill will impact the bonus schemes, the return of expired drugs and the free sample of drugs. Thus, the pharmaceutical companies will have to redesign the incentive schemes from the scratch.

However, there are several positive things as well. Since the central tax will be included in the GST, there is a relief to the business community. Moreover, transactions between two dealers of different states (interstate transactions) will be tax neutral. Therefore, the traditional CF Distribution model will be revamped altogether. It will be replaced with efficient supply chain models. Since many pharma companies today operate on a trader of goods model, they can’t set-off service tax paid. In the GST times, the cost of goods sold will get reduced by credits.

It is assumed that the proposed would bring a good effect on the warehousing strategy also. Since most of the pharmaceutical industries today maintain warehouses (in spite of additional operating expenses) in different states to avoid the CST impact. Post GST, they needn’t worry about the same. Thus, they can maintain warehouses at strategic locations. It is also possible that pharmaceutical giants consolidate their warehouses and reduce operational expenses. This will happen across the sector regardless of the size of the company.

It will be quite interesting to see how the things happen?

Since the government has shown the intentions of implementing GST w.e.f. 1st April 2016, it will be quite interesting to see the change happening in next six months. Industries closely watch the happenings around and the recommendations of the steering committee about things like dual threshold and exemption in the GST regime. Also, it will be very interesting to see the recommendations about Revenue Neutral Rate for GST and SGST.

It is critically important to create an awareness of it amongst key stakeholders such as distributors, suppliers, and buyers. The internal stakeholders i.e. employees should also be well-informed about the plan and progress of the same. What will be the stand of the company in case of major cost implication should be clear to them.

Experts iterate on the need of timely preparation for GST. They fear that failing to do the same would result in potential business risks and reputational and compliance threats. It is the duty of the top management to look into the matter.

Mapping IT systems with reference to GST will also be a great challenge. They need to be made compliant for it.

Well, everyone was waiting with bated breath on the 23rd June when the fate of the UK announced. Though there was almost a surety that the country would vote for stepping out of the EU, a few people had hopes for a miracle.

As the things are clear now, and it is declared that the country is no more a part of the European Union. Though there are several formalities on the way and it will take quite a time to happen actually, people have started thinking about the implications of it on different aspects of life. Right from the term of residence to the price of GBP, and employment policies to clinical trial and drug testing; the decision would affect everything.

Impact on drug trials

Experts say that even if the UK decides to quit the EU by going with Brexit and it invokes the Article 50, there is a cooling period or negotiation period of two years when the EU law will remain effective in the UK, that too after signing off the formal notification.  It means that the sky is not going to fall immediately. According to legal experts, EU Clinical trial will have to be replaced with EU regulation and it can happen between December 2017 and October 2018.

Before Brexit polls, the major pharmaceutical companies in the UK showed their preference towards staying with the EU. They argued that moving out of it will increase the costs of starting and conducting trials. Quite obviously, the clinical trial market in the country will face a massive hit.

Statistics proves that more than 40 percent trails of rare diseases are happening in the European Union, and the UK being part of it reaps great benefits. However, in the changed scenario, the country will lose out many of the trials. It is not a great thing from the point of view of patients. In fact, many research institutes have already informed that the trials will not take place in the UK if it exits from the EU.

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Brexit is good for the country, some experts think

People who are on for Brexit also have some rationale. They feel that the EU Clinical Trial Directive (popularly known as CTD) has made the process hundred times complicated than earlier. The amount of bureaucracy and complexities in the application procedure makes it incredibly difficult. They come with data points which state that the number of the clinical trials pre-CTD era was almost double as compared to the post-CTD times.

Some experts feel that Brexit will speed up the availability of drugs in the country which is beneficial for the patients. As of now, many companies follow the path of getting approval from the European Medicines Agency or EMA.

It is a kind of blanket approval to sell or market medicines across all countries of the EU.  Medicines for rare types of cancer or other diseases follow the route. However, slow speed and complicated procedures are the biggest roadblocks felt by pharmaceutical companies.

Some experts tend to differ

Some People fear that Brexit will greatly impact the clinical research from the regulatory angle as well. Tomorrow, when the UK will be forced to give application for clinical trials out of the EU countries, there will be a drastic drop in the clinical research and patient access.

Today, the headquarters of EMA is in London. With the UK getting out of the EU, it has to be moved out of London. It will be placed in any of the EU member countries. It will reduce the importance of the UK in the world of pharmaceuticals and medicines. If the UK decides to be the part of EEA in spite of moving out of the EU, then there will be a status-quo. I case it decides otherwise, then the route of EEA won’t be applicable.

Post-Brexit scenario in brief

  • The UK will establish altogether new legislation, or it will be forced to transpose the same to the Scottish, Irish or Welsh laws.
  • EMA will most probably move the headquarters to any of the countries of the EU from London.
  • There is a need for special arrangements for clinical trials in the UK. Pharmaceutical companies are supposed to sign a separate agreement for it. Experts fear that a great load of paperwork will be there initially.
  • The process of batch release will also become further complicated. The UK authority will not be able to give a blanket approval. Thus, the process of manufacturing, storing and distributing medicines will become more complex as compared to today.
  • EMA centralize authorization process will no longer benefit the UK. Every new medicinal product has to be authorized and approved by MHRA (the regulatory agency of the UK).
  • If the UK decides not to leave the European Economic Area or EEA, then clinical trials and authorization of new drugs will have a minimal impact. Also, the country will continue to enjoy the paybacks of the synchronized regulatory framework.

Conclusion

As the cliché goes, “a coin has two sides’; there are pros and cons of Brexit from the economic point of view. It is a fact that the decision is a big one, and it is not possible to pass judgment based on a single aspect. As far as the impact on clinical trials is concerned, there are mixed opinions. Some experts feel that it will be a major setback for the UK because not many drug trials will take place in the country. Certainly, it is disheartening news for patients suffering from rare diseases. Since the companies will prefer other countries of the EU, it is quite obvious that the patients of the respective countries will get benefited.

At the same time, some experts feel that it will give a sigh of relief to the pharmaceutical companies that get fed up with the slow approval process and bureaucracy of EMA. As per them, taking approval of MHRA will be quite easy.

Since it will take at least two years to see the actual effects on the ground, people want to follow the  “wait and watch” strategy.