Development of Pharmaceutical

author A&A

calender August 21, 2021

Development of Pharmaceutical Industry in India

Presently, the Indian pharmaceutical industry tops the chart amongst India’s science-based industries with an enormous capability in the field of drug manufacturing and technology. India ranks 3rd worldwide in terms of countries that have exported the highest dollar value worth of drugs and medicines during the period 2018 – 2021. India is one of the largest providers of generic drugs and medicines in the global market by occupying a 20% share in global supply volume[1] and has a large resource pool of scientists and engineers with the ability to guide the industry to much greater heights, which has established its essence globally and is determined to leave an imprint in the changing environment.

Indian pharmaceutical sector caters to over 50% of global demand for various vaccines, 40% of generic demand in the United States of America and 25% of all medicine in the United Kingdom. The capacity of the Indian pharmaceutical industry to cater to enormous global demand represents the fact that the generic drugs manufactured in India to be supplied worldwide confer to the acceptable international safety and quality standards.

Covid-19 and impact on Indian Pharmaceutical Industry

The global outbreak of coronavirus and its resultant nationwide lockdown severely affected all the major sectors of the Indian economy, however, the same acted as a boon for the Indian pharmaceutical industry. Even though some parts of the pharmaceutical business were affected due to direct impact on the supply chain and import of active pharmaceutical ingredients from China, Covid-19 provided the domestic pharmaceutical sector with an opportunity to increase its production and role-playing, rather than staying dependent on foreign marketeers.

According to the Indian Economic Survey 2021[2], the domestic market is expected to grow three folds in the next decade. India’s domestic pharmaceutical market is estimated at US$ 41 billion in 2021 and expected to become a US$ 65 billion industry by the year 2024 and further expand to US$ 120-130 billion (approx.) by 2030.

Investments and Recent Developments

During the Covid-19 pandemic, several initiatives were taken by the Central Government to provide the necessary support required in the pharma industry, which includes the amendment of the existing Foreign Direct Investment policy. In the case of the pharmaceutical sector, foreign direct investment is permitted up to 100%, however, permission from the Department of Pharmaceuticals is required to acquire more than 74% shareholding in existing companies. Nonetheless, the Central Government has the right to apply additional conditions to an investment in the event the investor proposes to acquire more than 74% of an existing pharmaceutical company.

Few instances of the recent developments/ investments in the Indian pharmaceutical sector are as follows:

February 2021 – The Russian Ministry of Health allowed Glenmark Pharmaceuticals to market its novel fixed-dose combination nasal spray in Russia.

April 2021 – National Pharmaceutical Pricing Authority fixed the prices for certain medicines including off-patent anti-diabetic drugs.

May 2021 – Indian Immunologicals Ltd. (IIL) and Bharat Immunologicals and Biologicals Corporation (BIBCOL) inked technology transfer pacts with Bharat Biotech to develop the vaccine locally to boost India's vaccination drive. The two Public Sector Undertakings plan to start production of vaccines by later half of 2021.

May 2021 – Under Atmanirbhar Bharat 3.0, the Government of India introduced ‘Mission COVID Suraksha’ aimed to accelerate the development and production of indigenous COVID vaccines for which Eli Lilly & Company issued non-exclusive voluntary licenses to pharmaceutical companies—Cipla Ltd., Lupin Ltd., Natco Pharma & Sun Pharmaceutical Industries Ltd.—to produce and distribute ‘Baricitinib’ - a drug for treating COVID-19.

Regulatory Framework

1. Drugs and Cosmetics Act, 1940 and Drugs and Cosmetics Rules, 1945

The Central Government and the State Governments are responsible for the enforcement of the Drugs and Cosmetics Act and Rules made thereunder. The Central Drugs Standard Control Organization, headed by the Drug Controller General of India, is primarily responsible for coordinating the activities of the State Drugs Control Organization, formulating policies, and ensuring uniform positive implementation of the Drugs and Cosmetics Act and Rules throughout India.

The Drug Controller General of India, on the other hand, is responsible for handling matters of product approval and standards, clinical trials, the introduction of new drugs, and licenses for new drugs.

2. Pharmacy Act, 1948

The Pharmacy Act tends to regulate the profession of pharmacy in India including education and practice of pharmacy. It specifies the offences while practising the profession of pharmacy by a registered pharmacist which, as a consequence, may lead to penal action under the Act to the extent of permanent deregistration

3. The Drugs & Magic Remedies (Objectionable Advertisements) Act, 1954 and the Drugs & Magic Remedies (Objectionable Advertisements) Rules 1955

The Act aims to regulate the advertisements of drugs relating to diagnosis/ cure/ treatment/ prevention of certain prescribed diseases and conditions in India. It prohibits advertisements of drugs and remedies that claim to have magical properties and makes doing so, a cognizable offence. The term diseases and conditions include AIDS, Asthma, Cancer etc.

4. Drugs Price Control Order, 2013

It is an order issued by the Government of India under Section 3 of the Essential Commodities Act, 1955 and supersession of the Drug (Prices Control) Order, 1995. Since the drugs are essential for the health of the society, the same has been declared as essential and accordingly put under the Essential Commodities Act, 1955. The order provides a list of price-controlled drugs, procedures for fixation of drug prices, method of implementation of prices fixed by the government and penalties for contravention of provisions. It further aims to regulate the margins offered to dealers and retailers and imposes an obligation to sell bulk drugs and formulations to dealers (conditionally) and consumers (unconditionally). As per the provisions of the Drugs Price Control Order, National Pharmaceutical Pricing Authority fixes the ceiling price for medicines in the controlled category.

5. Information Technology Act, 2000 (IT Act)

The IT Act imposes liability on such body corporate or the person who deals with sensitive personal data or information for negligence in implementation and maintenance of reasonable security and procedures for securitization of such data if such negligence causes wrongful gain or loss to any person. It further criminalises the disclosure of personal information to a third person, in the event the same is done without the consent of the person to whom such information belongs or in breach of a lawful contract, coupled with the intention or knowledge that such disclosure will cause wrongful gain or wrongful loss.

6. Narcotic Drugs And Psychotropic Substances Act, 1985

Under the Narcotic Drugs And Psychotropic Substances Act, 1985, it is illegal for a person to produce/manufacture/cultivate, possess, sell, purchase, transport, store, and/or consume any narcotic drug or psychotropic substance. The Narcotic Drugs and Psychotropic Substances Act is designed to fulfil India’s treaty obligations under the Single Convention on Narcotic Drugs, Convention on Psychotropic Substances, and United Nations Convention Against Illicit Traffic in Narcotic Drugs and Psychotropic Substances.

7. Medical Devices Rules 2017

The Medical Devices Rules, 2017 have been notified with an aim to bring within its purview the entire universe of devices by notifying them as “drugs” in a phase-wise manner thereby bringing them within the jurisdiction of the Central Drugs and Cosmetics Organisation. Presently, only a few types of medical devices are regulated in India as “drugs” under Section 3(b)(iv) of the Drugs and Cosmetics Act and all other non-notified medical devices do not require any registration certificate or other regulatory approvals. With the Medical Device Rules and the subsequent notification of medical devices, regulatory approvals would be required. Further, discussions are underway for developing detailed guidance on essential principles for safety and performance to be followed in the manufacturing process of medical devices intended to be sold in India.

Legislation Governing the Pharmaceutical Industry in India

To ensure strict compliance with the legislation governing the pharmaceutical industry in India, the key regulatory bodies entrusted with the responsibility to ensure approval, production and marketing of quality drugs/medicines in India at reasonably affordable prices are:

1. The Central Drug Standards and Control Organization (CDSCO)

Formulated within the aegis of the Ministry of Health and Family Welfare, it, inter alia, prescribes the standards and measures to ensure the safety, efficacy and quality of drugs, cosmetics, diagnostics and devices in the country; regulates the market authorization of new drugs and clinical trials standards; supervises drug imports and approves licences to manufacture the above-mentioned products.

2. The National Pharmaceutical Pricing Authority (NPPA)

Established in 1997, NPPA is responsible to fix and/or revise the prices of decontrolled bulk drugs and formulations at judicious intervals. It is further responsible to periodically update the list under price control through inclusion and exclusion of drugs in accordance with established guidelines; maintain data on production, exports and imports and market share of pharmaceutical firms; and enforce and monitor the availability of medicines in addition to imparting inputs to Parliament in issues pertaining to drug pricing.

3. Narcotics Control Bureau (NCB)

NCB is the chief law enforcement and intelligence agency of India responsible for fighting drug trafficking and the abuse of illegal substances. It was created to enable the full implementation of the Narcotics Drugs and Psychotropic Substances Act and fight its violation through the Prevention of Illicit Trafficking.

Recent legislative changes

1. Drug marketers responsible for the quality of drugs

On February 11th, 2020, the Ministry of Health and Family Welfare notified the Drugs and Cosmetics (Amendment) Rules 2020 which came into effect on March 1st, 2021. The amendment provides for the definition of, and responsibility and labelling requirements for, marketer of the drugs. The term “Marketer” means a person who, as an agent or in any other capacity, adopts any drug manufactured by another manufacturer under an agreement for the marketing of such drug by labelling or affixing his name on the label of the drug for its sale and distribution.

The amendment rules provide that any marketer who sells or distributes any drug shall be responsible for the quality of that drug as well as other regulatory compliances along with the manufacturer under these rules. The amendment rules further mandatorily require an agreement to be entered into by the marketer with the contract manufacturer where such marketer proposes to adopt any drug manufactured by the contract manufacturer by labelling or affixing his name on the label of the drug with a view for its sale and distribution.

2. Retail sale of drugs

The Ministry of Health and Family Welfare issued a notification on March 26th, 2020 (“Drug Delivery Notification”) whereby retailers have been permitted to sell and deliver drugs to the doorstep of the consumer. The Drugs Delivery Notification permits delivery of prescription drugs as specified in Schedule H, Schedule H1 and Schedule X to the of the Drugs and Cosmetics Rules, 1945. Further, the Drugs Delivery Notification provides for certain other conditions which must be fulfilled in order to sell and deliver the drugs to the doorstep.

3. Medical Devices

The Central Government has declared certain medical devices as drugs[3]. These devices are covered by the definition of medical devices under Rule 3(zb) of Medical Devices Rules, 2017. The Central Government has notified devices to cover practically all devices intended to be used for diagnosis, mitigation, treatment, prevention of disease or disorder.

Further, a new Chapter IIIA has been inserted by the Central Government to provide for the regulation of registration of these devices. The Medical devices referred to in Rule 19A(1) must be registered with the Central Licensing Authority through the online portal established by the Central Drugs Standard Control Organisation for this purpose. The registration under this Chapter shall be on a voluntary basis for a period of 18 (eighteen) months from the commencement of this Chapter thereafter it shall be mandatory[4].


The Indian pharmaceutical industry has shown immense potential in the present times and continues to develop and expand steadily. The drug sector in India is also expected to expand in a healthy manner owing to a significant overall increase in the research and development expenditure and proposed new drug launches in the pharmaceutical industry.

However, since health is an important subject and a matter of concern, the industry continues to be heavily regulated. multiple ministries continue to regulate the pharmaceutical industry such as the Health Ministry, Chemicals and Fertilizers Ministry, Science and Technology Ministry, Food Ministry etc. Further, numerous legislations, regulations and judgments affecting the industry have also come into existence recently and few others are in the pipeline. Nonetheless, it will be interesting to see how swiftly the industry realigns itself with the upcoming legal changes in order to ensure the continuance of its dominance and global success.

[3] SO 648(E) dated 11.02.2020 w.e.f. 01.04.2020 Ministry of Health & Family Welfare
[4] GSR 102(E) dated 11.02.2020 also effective from 01.04.2020

Blog Corporate Commercial


Post A Comment

Your email address will not be published *


Contact Us Now

Awards & Recognitions

Cookies Consent

We use cookies to help you navigate efficiently and perform certain functions. You will find detailed information about all cookies under each consent category below. Read more...

Cookies Consent

We use cookies to help you navigate efficiently and perform certain functions. You will find detailed information about all cookies under each consent category below. Read more...