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India’s Drug Industry Needs A Major Overhaul


Lack of regulatory oversight in India’s drug industry.


GS II- Health

Dimensions of the Article:

  1. Current situation of generic medicine in India
  2. Lack of regulatory oversight
  3. What is a generic medicine?
  4. Challenges & issues
  5. Measures by Indian government
  6. Conclusion

Current situation of generic medicine in India:

  • According to the Economic survey, India is the largest provider of generic medicines, producing 20% of the world’s supply.
  • Its $50 billion drug-manufacturing industry exports medicines to over 200 nations and makes 60% of all vaccines.
  • It boasts “the highest number” of US Food and Drug Administration compliant plants outside America and some of the generic pharmaceutical companies of India produce high-quality medicines.

Lack of regulatory oversight:

  • India seeks to claim the mantle of “pharmacy to the world,” but there is short on regulatory oversight.
  • Recent incidents that highlight this flaw:
  • Generic cough syrups:
    • The cough syrup have killed dozens of children.
    • The children who died were mostly under the age of five years.
    • They were given Indian-made over-the-counter products contaminated with industrial solvents and antifreeze agents that are fatal in even small amounts.
  • Eye drops:
    • The eye drops contained extensively drug-resistant bacteria that has caused blindness.
    • So far 68 patients across 16 US states have been affected.
    • As per the lastest report by the Centers for Disease Control and Prevention, . three people died, several had to have their eyeballs removed, some went blind.
    • The Indian company, Global Pharma Healthcare, issued a voluntary nationwide recall for the drops.
  • There were reports claiming that chemotherapy drugs have been contaminated.

What is a generic medicine?

  • There is no definition of generic or branded medicines under the Drugs & Cosmetics Act, 1940 and Rules, 1945 made thereunder. However, generic medicines are generally those which contain same amount of same active ingredient(s) in same dosage form and are intended to be administered by the same route of administration as that of branded medicine.
  • The price of an unbranded generic version of a medicine is generally lower than the price of a corresponding branded medicine because in case of generic version, the pharmaceutical company does not have to spend money on promotion of its brand.

Challenges & issues:

  • Drug making involves 8-10 stages, in which India is not being competitive from the initial or intermediate stages.
  • India imports penultimate stage products to make most medicines. This increases the end costs. E.g., in Crocin makingPhenol is an Active Pharma Ingredient (API) and Benzene & Propylene are Key Starting Materials (KSM). APIs and KSMs are penultimate products, which India needs to import.
  • India buys 70% inputs from a single supplier – China. For specific APIs, 90% inputs come from China. In case where India makes APIs or KSMs, intermediates are imported from China.
  • With pharma sector growing well, using imported inputs for enhancing competitiveness is business-worthy, but critical dependence on a single supplier may lead to a hostage situation. India was nearly self-sufficient in pharma inputs in 1990s.

Measures by Indian government:

  • Some recent measures by the Indian government to control drug trafficking include setting up of the Narco Coordination Centre in 2016, a mechanism under the NCB which was restructured in 2019 into a four-tier district-level scheme.
  • An e-portal, Seizure Information Management System, was also launched in 2019 under the Narcotics Drugs and Psychotropic Substances Act, for better coordination of all drug law enforcement agencies.
  • India has entered into 26 bilateral agreements to tackle the threat of drug trade.
  • India’s drug enforcement challenge is accentuated by the country’s large size and a huge pharmaceutical industry. The northeast region faces shortage of staff and equipment to tackle the illicit traffic of drugs.
  • Further complicating the problem is the increase in use of dark web and cryptocurrency by drug peddlers and buyers. A Bengaluru resident was arrested in 2021 for procuring drugs from the dark web. He had hacked bitcoin exchanges, poker websites, and company websites to pay for drugs. The anonymity of the dark web makes it difficult for enforcement authorities to track the movement of drugs or even seize money in cryptocurrency.


The above incidents signify the need to make India’s drugs regulatory systems to be transparent, predictable and verifiable.

February 2024