Introduction:
India is often called the “pharmacy of the world.” The country manufactures one in every five generic drugs consumed globally. From pharmacies in New York to hospitals in Lagos, medicines made in India are a common sight, particularly from pharmaceutical hubs in Gujarat, Maharashtra, and Telangana. This achievement is a point of national pride and has positioned India as a central player in global healthcare.

• Yet, beneath this success lies a growing set of challenges. A recent study by the Max Institute of Healthcare Management at the Indian School of Business highlights serious cracks in India’s pharmaceutical policy and regulatory framework. These weaknesses threaten not only domestic drug safety but also India’s international reputation as a trusted supplier.

India’s pharmaceutical regulation.

One of the most unusual features of India’s drug market is the dominance of “branded generics.”

·         True generics are cheaper, patent-free medicines that are supposed to provide affordable access to patients.

·         Branded medicines are patented drugs with exclusivity rights, often priced higher.

·         Branded generics—which dominate 87% of India’s drug market—fall in between. These are not under patent, yet they carry brand names and are sold at higher prices than true generics.

This system has created what many experts call “the worst of both worlds.” Patients do not get the low prices associated with generics, but neither do they benefit from the exclusivity that justifies premium pricing for branded medicines.

The study identifies two major shortcomings in India’s pharmaceutical regulation.

1.        Delayed drug quality safeguards: Many essential protections such as good manufacturing practices (GMPs), post-marketing surveillance, and structured inspections were introduced only in the last two decades. For a long time, India operated without critical checks on manufacturing and distribution.

2.      Fragmented policymaking: Reforms have often been introduced as piecemeal gazette notifications rather than through comprehensive legislative debate. This has created a fragmented, outdated regulatory framework, contributing to weak oversight and uneven enforcement across states.

The World Health Organization (WHO) estimates that one in every ten medicines in developing countries is either fake or substandard. While India is not solely responsible, repeated reports of failed quality checks have raised questions about its reliability as a global supplier.

Trust Deficit in Drug Consumption:

One of the most damaging outcomes of India’s fragmented regulatory environment is the erosion of trust.

·         Consumer behaviour: Despite the availability of cheaper true generics, most Indians continue to prefer branded generics. This is largely due to decades of marketing by pharmaceutical companies that have portrayed branded drugs as superior.

·         Lack of awareness: There is no sustained government-led campaign to educate people on how to identify safe medicines or the fact that generics are equally effective. Patients are left to navigate a complex and often confusing system on their own.

Drug regulation in India:

The regulation of drugs in India is carried out under the Drugs and Cosmetics Act, 1940 (DCA) and Drugs and Cosmetics Rules, 1945. These laws govern the import, manufacture, sale, and distribution of medicines.

·         Central Drugs Standard Control Organisation (CDSCO): It works under the Ministry of Health and Family Welfare. It regulates the quality, safety, and efficacy of drugs, medical devices, and cosmetics.

·         State Drug Regulatory Authorities (SDRAs): They license manufacturing units, monitor sales, prosecute violators, and take action against misleading advertisements.

·         Drugs Technical Advisory Board (DTAB): Advises the central government on technical matters of drug regulation.

·         Drugs Consultative Committee (DCC): Ensures uniformity between states and the Centre in enforcing the law.

·         Central Drugs Laboratory (CDL): The national laboratory for quality testing of drugs and cosmetics.

In this structure, the Centre and the states share responsibilities. CDSCO handles approval of new drugs, clinical trials, and imports, while states handle licensing and local inspections.

Other Problems in drug quality and regulation:

·        Weak enforcement: The division of powers between the Centre and states has created overlapping jurisdictions and weakened enforcement. No single authority has complete control, which leads to gaps.

·        State-level challenges: Many State Licensing Authorities lack resources. Testing laboratories are ill-equipped, the number of drug inspectors is low, and officials often lack training in legal and technical aspects. This reduces their ability to take strong action against violators.

·        Dependence on imports: India imports a bulk of its Active Pharmaceutical Ingredients (APIs) from China, Taiwan, and other countries. This raises concerns about quality monitoring and supply chain vulnerabilities.

·        Financial constraints: Both CDSCO and SDRAs depend on government funds. They face delays in accessing money due to complex approval systems, which affects efficiency.

·        Lack of transparency: There is no central database of drug manufacturers, timelines for approval stages are unclear, and record-keeping is poor. This information asymmetry makes it hard to track accountability.

·        Pharmacovigilance gaps: The Pharmacovigilance Programme of India (PvPI) has limited outreach. Many patients and even healthcare professionals are unaware of how to report adverse drug reactions. There is little communication from authorities about what action is taken after such reports.

·        Data integrity problems: Some Indian manufacturers have been flagged for data integrity issues in studies related to bioavailability and bioequivalence. This undermines confidence in India’s drug research practices.

Online pharmacies and retail chains:

The rise of online pharmacies presents new risks. A 2014 study in Jaipur found that 2 of 8 e-pharmacies delivered medicines without asking for prescriptions.

On the other hand, retail pharmacy chains have shown positive results. A Hyderabad study reported a 5% improvement in drug quality and a 2% decrease in prices compared to traditional pharmacies. With proper regulation, such models can improve affordability and safety.

Way forward:

·         Strengthened regulation: More investment in licensing, inspections, sampling, and testing.

·         Financial autonomy: Allow regulators to generate and disburse their own revenue, reducing dependence on slow government approvals.

·         Digital tools: Use digital technologies for centralised record-keeping, national drug databases, and real-time pharmacovigilance.

·         Consumer awareness: Launch sustained campaigns to educate people about generic drugs and help them identify safe medicines.

·         Uniform standards: Greater centralisation of powers in CDSCO and stronger partnerships with SDRAs through the DCC.

Conclusion

India’s pharmaceutical industry is one of the biggest in the world, known for producing large volumes of medicines at affordable prices. But its long-term success depends on fixing key problems at home. Issues like over-reliance on branded generics, weak checks on medicine quality, poor coordination between institutions, and low public awareness are slowly reducing trust in the system.

If India wants to remain the “pharmacy of the world,” it needs to move from reactive to proactive regulation. This means stronger inspections, better consumer education, and more coordination between institutions. The stakes are high, not just for public health but also for India’s economic future in the global pharmaceutical market.