How is India streamlining the pharma sector? | Explained

Why has the drug regulator tweaked norms for exports? Where does India stand as a drugs manufacturer? Does the change follow allegations of sub-standard medicines being exported? Will a centralising authority help, with several important drugs set to go off the patent list?

Updated - May 13, 2024 10:08 am IST

Published - May 12, 2024 04:24 am IST

India ranks third worldwide as a producer of drugs and pharmaceuticals by volume, exporting to around 200 countries/territories.?

India ranks third worldwide as a producer of drugs and pharmaceuticals by volume, exporting to around 200 countries/territories.? | Photo Credit: Getty Images/iStockphoto

The story so far: India’s drug regulator, the Central Drugs Standard Control Organisation (CDSCO), has withdrawn powers delegated to State licensing authorities to issue NOCs (no objection certificates) for manufacture of unapproved, banned or new drugs for export purposes. This latest announcement covering drugs for export comes at a time when India has been under scrutiny for allegations of supplying substandard drugs causing health concerns in several countries.?The CDSCO is now the sole authority for issuing manufacturing licences for drugs meant for export.

What is India’s role in the pharma market?

India ranks third worldwide as a producer of drugs and pharmaceuticals by volume, exporting to around 200 countries/territories. The Indian pharmaceutical industry supplies 62% of the global demand for vaccines and is a leading supplier of DPT (diphtheria, pertussis and tetanus), BCG (Bacillus Calmette-Guérin, used primarily against tuberculosis), and measles vaccines. At least 70% of WHO’s vaccines (as per the essential immunisation schedule) are sourced from India, the Centre?had noted in a submission in Parliament.

What will be the impact?

India is a key player in the international generic medicine market and any change in policy has a direct impact on manufacturers and importers, say industry insiders. The centralising of the licensing authority is significant, they point out, because according to a study conducted by the Department of Pharmaceuticals, India needs to get ready to take advantage of drug sales worth $251 billion going off-patent this coming decade.

The study notes: “In the years between 2022 and 2030, the pharmaceutical sector in India will undergo landmark changes as several drugs are expected to go off-patent and provide an opportunity for the entry of generic products. Expiry of patents is very promising for the Indian generic drug market as it is expected to expand and grow further with inclusion of these new drugs. With ongoing developments, India has started focusing on self-reliance at a large scale. Hence, it is imperative to identify these drugs beforehand, draft and implement strategies which help in their timely entry into the market by promoting generic drug manufacturing.”

What are the challenges?

India is dealing with several challenges, including tackling intellectual property rights, lack of research and development etc.?The study points out that understanding the political, economic, sociocultural, technological, environmental, and legal factors is vital for assessing the opportunities and challenges in the pharmaceutical market in India. “The industry must adapt to changes in these external factors, navigate regulatory requirements, leverage technology advancements, and align their strategies with the evolving needs of the pharmaceutical industry to succeed in the global market,” it noted. Speaking about the change, Raheel Shah, business development director, BDR Pharmaceuticals, says the move is welcome as the centralisation of NOCs will formalise the Indian pharma industry. “This will result in the efficiency of the overall process along with bolstering pharma exports to key international markets. It will help to bring uniformity in protocols, achieve the target of reaching $450 billion by 2047,” he adds.

What about the?quality of manufacturing?

An article in the?British Medical Journal?titled, ‘Indian government cracks down on 18 drug companies for poor quality manufacturing’, noted that the Indian government had cancelled the licences of over 10 pharmaceutical companies as part of a crackdown on poor quality manufacturing. The action last March came after an inspection of 76 drug firms across 20 States. “The government is also understood to have given notices to a further 26 companies for not complying with good manufacturing processes. The Indian pharmaceutical industry has an estimated 10,500 companies, with drug exports having more than doubled in the past decade. But the industry has faced a series of scandals of late, including a World Health Organization investigation into four contaminated cough syrups that caused acute kidney injuries and were linked to the deaths of 66 children in the Republic of the Gambia last year,” it added.

In what seems like an effort to keep a strict watch, the latest order by CDSCO states that pharmaceutical companies will have to get their NOCs from the zonal offices of CDSCO?online before applying for manufacturing licences from their respective State/UT drug regulators. The Drugs Controller General of India, Rajeev Singh Raghuvanshi, said the decision was taken to facilitate the application process. In 2018, the CDSCO had permitted State and UTs’ drug licensing authorities to grant permissions to export some specific drugs. As per the new order, local regulators will have to hand over the details of all the approvals they have given from August 2018 to May 2024 to CDSCO.

Are drugs manufactured in India safe? | In Focus podcast

The centralisation of powers hasn’t come as an overnight development, says an industry expert. The Central government’s advisory group on drugs had earlier this year noted that getting NOCs from local drug regulators for pharmaceutical products is a tedious process, leading to delays. Says Harish K. Jain, president, Federation of Pharma Entrepreneurs: “We don’t anticipate any major impact as far as costing or delays with this latest move. Export of goods is on the Union List. Also, the central authority was always the Central government; the power to hand out licences for export of drugs was delegated to States a few years ago.”

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