Regulatory Negligence in India’s Pharma Industry

Syllabus: GS2/Governance; Issues Related To Health

Context

• Recent tragic incidents involving contaminated cough syrup and the resulting deaths of several children have placed India’s reputation as the ‘pharmacy to the world’ under scrutiny.

About India’s Pharmaceutical Industry

• India’s pharmaceutical industry stands as a global powerhouse — renowned for its scale, affordability, and innovation.
• India supplies affordable medicines to over 200 countries and contributes significantly to domestic and international public health.
  • India’s pharmaceutical exports are vital to low- and middle-income countries.

Scale and Reach

• According to the Department of Pharmaceuticals, India ranks:
  • 3rd globally by volume of pharmaceutical production;
  • 14th by value, reflecting its cost-efficiency and mass-scale manufacturing;
• As of FY 2023–24:
  • The industry is valued at USD 50 billion;
  • Domestic consumption accounts for USD 23.5 billion;
  • Exports contribute USD 26.5 billion, with major markets including the U.S., Europe, and Africa;
• Future Projection:
  • Industry growth to USD 130 billion by 2030;
  • A potential USD 450 billion valuation by 2047, aligning with India’s centennial independence goals;
• Global Leadership: India supplies:
  • Over 50% of global vaccine demand;
  • Around 40% of U.S. generic drug consumption;
  • A significant share of Active Pharmaceutical Ingredients (APIs) and biosimilars;

Key Issues & Challenges Around India’s Pharma Industry

• Issues of Safety: It includes the contamination of cough syrups with toxic industrial solvents to the seizure of counterfeit cancer drugs in Telangana.
  • In one incident, diethylene glycol (DEG) and ethylene glycol (EG) — toxic industrial chemicals used in paints and brake fluids — were found in pediatric medicine, leading to the deaths of several children.
  • These incidents are not isolated; they point to systemic failures in oversight, quality control, and enforcement.
• Recurrent and Preventable Crisis: Similar incidents in The Gambia (2022) and Uzbekistan (2022), which killed nearly 90 children combined, were traced back to Indian-made cough syrups.
  • Investigations by the World Health Organization (WHO) revealed ‘unacceptable levels’ of these toxins.
  • India introduced mandatory pre-export testing for cough syrups in 2023 — but only for export-bound batches, which left domestic products largely unchecked.
• Fragmented Oversight and Weak Enforcement: India’s drug regulation is governed by the Drugs and Cosmetics Act of 1940, with responsibilities split between centre and state-level authorities. This dual structure has led to:
  • Jurisdictional confusion, with unclear accountability.
  • Inconsistent inspections and licensing standards across states.
  • Reactive governance, where enforcement follows public outcry rather than proactive monitoring.
• Threat to India’s Pharmaceutical Credibility: India supplies about 40% of generic medicines in the US; 25% in the UK; and 90% in Africa.
  • The combination of lax oversight, fake drug markets, and profit-driven shortcuts risks undermining India’s hard-won global standing in pharmaceuticals.

Regulatory Framework in India

• Central Drugs Standard Control Organisation (CDSCO): It is a national regulatory authority responsible for drug approvals, clinical trials, import control, and coordination with state regulators under the MoH&FW.
  • It oversees compliance with the Drugs and Cosmetics Act, 1940 and Rules, 1945.
• State Drug Control Authorities: Handle licensing, inspections, and enforcement at the state level;
  • Work in tandem with CDSCO to ensure uniform implementation of drug laws;
• National Pharmaceutical Pricing Authority (NPPA): Regulates prices of essential medicines under the Drug Price Control Order (DPCO);
  • Ensures affordability and accessibility of key drugs

Legal Framework

• Drugs and Cosmetics Act, 1940: Governs manufacture, sale, and distribution of drugs and cosmetics;
  • Includes provisions for Good Manufacturing Practices (GMP) and Good Laboratory Practices (GLP);
• New Drugs and Clinical Trials Rules, 2019: Streamlines clinical trial approvals and compensation mechanisms;
  • Introduces timelines for regulatory decisions and waivers for certain drug categories
• Schedule M & Schedule Y:
  • Schedule M: Standards for manufacturing practices;
  • Schedule Y: Guidelines for clinical trial conduct and ethics;

Reforms and Policy Initiatives

• National Pharmaceutical Policy (Draft 2023): It focuses on regulatory efficiency, innovation, and global competitiveness;
  • Emphasizes self-reliance in Active Pharmaceutical Ingredients (APIs) and biosimilars;
• Production Linked Incentive (PLI) Scheme: It encourages domestic manufacturing of critical drugs and raw materials
• Pharmaceutical Technology Upgradation Assistance Scheme (PTUAS): It supports SMEs in upgrading to WHO-GMP standards
• Promotion of Research and Innovation in Pharma-MedTech (PRIP): It aims to build a robust R&D ecosystem.

Innovation & R&D

• Establishment of National Institutes of Pharmaceutical Education and Research (NIPERs);
• Launch of the National Policy on R&D and Innovation in Pharma-MedTech (2023);

Global Alignment

• India is increasingly aligning its regulatory practices with international standards:
  • Collaboration with WHO, US FDA, and EMA;
  • Adoption of ICH guidelines for drug development and safety;
  • Participation in global pharmacovigilance networks;

Way Forward

• Rebuilding trust requires more than punitive action after each tragedy. India needs to:
  • Enforce uniform quality standards for both domestic and export markets.
  • Empower and reform the CDSCO to function independently of political and industrial pressures.
  • Mandate transparency in drug testing and recall data.
  • Establish accountability chains linking manufacturers, distributors, and regulators.
• India’s claim to being the world’s reliable medicine supplier will continue to ring hollow, without such reforms.

Source: BS