Delving Into Drug Manufacturing And Distribution Laws In India

Posted On - 12 March, 2024 • By - King Stubb & Kasiva

Manufacturing and Distribution of Drugs in India

Introduction:

The pharmaceutical industry in India isn’t just about producing pills promising relief and healing; it is about ensuring that every medication reaching the hands of patients meets stringent quality standards. Behind every pharmacy counter, there is a complex interplay of regulations governing drug manufacturing and distribution. With a projected market value growth of $100 billion by 2025, the industry is witnessing remarkable expansion. As the sector continues to evolve and expand, it becomes imperative to delve into the intricacies of the legal and regulatory framework governing drug manufacturing and distribution in the country.

Regulatory Authorities

At the helm of drug regulation in India stands the Central Drug Standard Control Organization (CDSCO)[1], responsible for approving drugs, conducting clinical trials, and setting quality standards. They also ensure compliance with regulations for both imported and domestically produced medications.Working hand-in-hand with the CDSCO is the Drug Controller General of India (DCGI), responsible for licensing and control functions, ensuring adherence to regulatory standards.

But the story doesn’t end there. The National Pharmaceuticals Pricing Authority (NPPA) regulates drug prices under the Drugs Price Control Order of 1995, striving to make essential medications accessible to all. Meanwhile, the Directorate General of Health Services (DGHS) provides technical support and guidance, while the Indian Council of Medical Research (ICMR) sets ethical standards for biomedical research and development, ensuring responsible innovation.

Overview Of Legislation

Drugs and Cosmetics Act, 1940 & Drugs and Cosmetics Rules, 1945[2]:
Regulates drug import, manufacture, distribution, and sale.
Ensures availability of quality drugs while upholding safety standards.
Pharmacy Act, 1948:[3]
Regulates the conduct of pharmacists and service quality standards.
Prescribes qualifications and standards for pharmacist practice.
Essential Commodities Act, 1955[4] and Drugs (Price Control) Order, 2013[5]:
Empowers government to regulate drug prices for affordability and accessibility.
Enforces pricing controls to ensure equitable access to essential medications.
Patent Act, 1970:[6]
Governs patent rights and exclusive production rights for pharma companies.
Subject to conditions, provides exclusivity for patented drugs.

Compliance Requirements

Good Manufacturing Practices (GMP):
Ensures consistent production quality and product integrity.
Compliance with WHO guidelines and Schedule M[7] of the Act, is essential.
Detailed specifications cover infrastructure, environmental safety, production controls, and quality assurance measures.
Drug Approval Process:
Meticulous submission of data and adherence to Schedule Y[8] guidelines are imperative.
Approval from DCGI and compliance with ethical standards are crucial for manufacturers.
Clinical Trials:
Adherence to stringent protocols, ethical considerations, and regulatory approvals is necessary.
Various trial categories undergo varying levels of scrutiny to ensure participant safety.
Guidelines outlined in Schedule Y govern the conduct of clinical trials in India.

Self-Regulation

However, ensuring compliance goes beyond just following the law. Leading pharmaceutical companies recognize the vital role of self-regulation. Initiatives such as adhering to ethical marketing practices and codes of conduct highlight the industry’s commitment to building trust and prioritizing patient safety.

Challenges Encountered By Distributors:

Despite the growth, the distributors face several challenges:

Quality Concerns: Counterfeit and substandard drugs erode trust in the system, leading to drug withdrawals and legal actions.

Regulatory Control Deficiency: Inadequate oversight allows substandard drugs to infiltrate the market, diminishing trust in the industry.

Elevated Distribution Costs: High transportation costs and involvement of multiple middlemen increase overall drug costs.

Limited Drug Availability: Scarcity of drugs due to multiple intermediaries leads to reduced sales and accessibility.

Inadequate Infrastructure: Poor infrastructure increases transportation and storage costs, impacting the distribution process.

Opportunities:

Despite challenges, there are opportunities for growth:

Adoption of Technology: Utilizing mobile apps and online ordering systems enhances efficiency and reduces costs.

Rise in Private Companies: Entry of private firms intensifies competition and lowers drug costs.

Government Spending: Increased healthcare spending improves drug availability and affordability.

Foreign Investment: Foreign investment improves drug quality and expands the market.

Market Expansion: Rapid market expansion increases drug availability and sales.

Emerging Trends:

Transformative trends shaping the industry include:

Enhanced Supply Chain Focus: Utilizing IoT, AI, and blockchain improves supply chain efficiency and visibility.

Customer-Centric Approach: Prioritizing customer service and personalized experiences enhances customer satisfaction.

Investments And Recent Developments[9]:

The pharmaceutical landscape in India is marked by significant investments and recent developments that underscore the country’s prominent position in the global pharmaceutical industry. Here are some noteworthy highlights:

Foreign Direct Investment (FDI):

India has opened its doors to foreign investments in this sector, allowing up to 100% FDI through automatic routes for Greenfield projects and up to 74% for Brownfield projects.
The cumulative FDI equity inflow in the Drugs and Pharmaceuticals industry has reached US $21.58 billion between April 2000 and September 2023, reflecting a substantial influx of foreign capital into the sector.

Government Initiatives and Collaborations:

Various collaborations and initiatives have been undertaken to bolster the sector. For instance:

Chemotherapy services were launched in 30 ESIC hospitals across the country in August 2023.
An MoU was signed between the Indian Pharmacopoeia Commission (IPC) and the Ministry of Health in Suriname to recognize the Indian Pharmacopoeia (IP) in Suriname.
The Ministry of Minority Affairs and the Ministry of Ayush collaborated to advance the Unani System of Medicine in India in May 2023.
Prime Minister Narendra Modi announced plans to increase the number of ‘Jan Aushadhi Kendras’[10] from 10,000 to 25,000 during his Independence Day speech in 2023.

Pharmaceutical Innovations and Launches:

Several pharmaceutical companies have introduced innovative products and ventured into new territories:

Emcure Pharmaceuticals Limited launched Orofer FCM 750, a new extension of its parenteral iron brand, catering to Indian patients with iron deficiency and iron deficiency anemia.
Glenmark Pharmaceuticals Ltd. introduced Akynzeo I.V., a unique I.V. injection formulation for preventing chemotherapy-induced nausea and vomiting.
BDR Pharmaceutical launched the first generic apalutamide (Apatide) in India for treating prostate cancer, addressing critical healthcare needs.
Anglo French Drugs & Industries Limited (AFDIL) entered the fertility space with the launch of the LYBER range, diversifying its product portfolio.

Foreign Collaborations and Acquisitions:

Indian companies have engaged in strategic collaborations and acquisitions to expand their global footprint:

Sun Pharmaceutical Industries Limited completed the acquisition of Concert Pharmaceuticals, Inc., in March 2023, enhancing its product pipeline with novel treatments.
Glenmark Pharmaceuticals Ltd. became the first company to launch a Teneligliptin + Dapagliflozin fixed-dose combination in India, catering to diabetes management.
Lupin signed an agreement to acquire two inhalation brands from Sunovion Pharmaceuticals Inc., diversifying its respiratory product portfolio.

Market Expansion and Regulatory Amendments:

The Indian pharma market is witnessing rapid expansion and regulatory reforms to foster growth:

Regulatory amendments, such as allowing 100% FDI under the automatic route for manufacturing medical devices, aim to attract foreign investments and foster innovation.
The National Medical Devices Policy, 2023[11] is poised to facilitate the growth of the medical device sector, ensuring access, affordability, quality, and innovation in healthcare.

Global Engagement and Leadership:

India’s leadership and engagement in global forums, such as the G20, underscore its commitment to human-centric progress and healthcare excellence on the global stage.
These investments and recent developments underscore India’s growing prominence in the pharmaceutical landscape, positioning the country as a key player in driving innovation, accessibility, and affordability in healthcare globally.

Conclusion:

In conclusion, the Indian pharmaceutical sector stands at the threshold of substantial growth amid evolving challenges and opportunities. Strict adherence to regulatory requirements, coupled with a focus on innovation and emerging trends, is crucial for sustainable development. Despite existing hurdles, the industry’s commitment to compliance, coupled with strategic investments and collaborations, positions India as a key player in driving healthcare innovation, accessibility, and affordability on the global stage.

As stakeholders navigate the complex regulatory landscape, they play a pivotal role in shaping a future where quality healthcare is not only a priority but also accessible to a broader population. The ongoing commitment to regulatory compliance, coupled with proactive efforts to embrace innovation, positions the Indian pharmaceutical sector for continued growth and positive impact on public health.

[1] https://cdsco.gov.in/opencms/opencms/en/Home/.

[2] https://cdsco.gov.in/opencms/export/sites/CDSCO_WEB/Pdf-documents/acts_rules/2016DrugsandCosmeticsAct1940Rules1945.pdf.

[3] https://www.indiacode.nic.in/handle/123456789/1364?locale=hi.

[4] https://dfpd.gov.in/WriteReadData/Other/act5.pdf.

[5] https://pharmaceuticals.gov.in/sites/default/files/dpco2013gaz.pdf.

[6] https://ipindia.gov.in/writereaddata/Portal/IPOAct/1_31_1_patent-act-1970-11march2015.pdf.

[7] https://cdsco.gov.in/opencms/export/sites/CDSCO_WEB/Pdf-documents/acts_rules/2016DrugsandCosmeticsAct1940Rules1945.pdf.

[8] https://cdsco.gov.in/opencms/export/sites/CDSCO_WEB/Pdf-documents/acts_rules/2016DrugsandCosmeticsAct1940Rules1945.pdf.

[9] https://www.ibef.org/industry/pharmaceutical-india.

[10] https://janaushadhi.gov.in/pmjy.aspx#:~:text=Under%20the%20scheme%2C%20dedicated%20outlets,drugs%20and%20293%20surgical%20items..

[11] https://pharmaceuticals.gov.in/policy/national-medical-device-policy-2023.

King Stubb & Kasiva,
Advocates & Attorneys