Source: PIBIndian Medicine Industry-RSTV , FDI data of MinistryMint 


    • Recently PM follows up his 3 city visit by a virtual meeting with 3 more vaccine developers based in Pune and Hyderabad  
    • Ambassadors of 100 countries are scheduled to arrive in Pune on December 4, to visit Serum Institute of India and Gennova Biopharma.   

Sweden has already acknowledged India’s role as the ‘pharmacy of the world’ and is focusing on expanding bilateral cooperation in the areas of health and life sciences in view of the Coronavirus pandemic. 

How big is Indian Pharma Sector? 

  • From 2000-2019 Pharma sector alone contributed for FDI inflows worth $16.2bn and it is expected to rise during COVID pandemic. 
  • Recent Economic Survey acclaimed Pharma sector as one of the top 5 sector which reduce trade deficit of India 
  • More than 80% worlds Anti Retro-viral drugs depend on India 
  • India is the largest producer of vaccines even before COVID pandemic and controlled more than 50% of global supplies. 
  • Bio-Pharma is the largest sector contributing to 62% of the total revenue 
  • It is estimated that medical tourism in the country can grow and become a 9 billion dollars industry this year 
  • 20% of global generic medicine has been controlled by India. 

How Indian Pharma Sector is regulated? 

  • Under Drugs and Cosmetics Act 1940 (For Source click here) was the central legislation that regulates India’s drug and cosmetic import, manufacture, distribution and sale. 
  • The Act clearly defines the spurious drugs, adulterated drugs and mis branded drugs. 
  • This also established the Central Drugs Standard Control Organization (CDSCO) 
  • The Act establishes the regulatory control over the manufacture and sale of drugs 
  • State Health department has to regulate the manufacturing, sales and distribution of drugs 
  • Drug Inspectors will control the implementation at ground level. 

Central Drugs Standard Control Organization (CDSCO) Source 

  • Central Drug Authority for discharging functions assigned under the Drugs and Cosmetics Act 
  • The CDSCO works in the Directorate General of Health services, is a division in Ministry of Health and Family welfare 
  • The CDSCO is headed by Drug Controller General of India (DCGI). 
  • It was advised by Drug Technical Advisory Board and Drug Consultative Committe 


Potential lead for enormous growth of Pharma Sector: 

  • The growing population of over a billion along with diversity among people offers An excellent centre for clinical trials 
  • Focus on low cost, efficient drugs lead to growth of the sector in terms oValue and Volume 
  • Low cost of production and Low R&D costs in India 
  • huge patient base from domestic and from foreign as a medical tourist 
  • Improving healthcare infrastructure in India 
  • An increase in lifestyle-related diseases such as diabetes, cardiovascular diseases, and central nervous system. 
  • Penetration of health insurance is increased 
  • Adoption of patented products by Indian Pharma Sector. 
  • Patent expiration and aging population in the US, Europe, and Japan. 

Challenges in the Pharma Sector: 

  • From regulator side 
    • Doing a post-mortem kind of work by inspecting the drugs after getting into market 
    • Low data collection on drugs coupled with insufficient training to drug inspector leading to huge malpractice among drug sellers  
  • From Marketing side 
    • Medical representatives and drug sellers inefficient training to meet the man power along with prevalence of Quack(fake doctor) increases risk of life of patients 
    • Pharma companies unethical pratice of providing freebies and gifts to Doctors to promote their drugs 
  • Quality is getting compromised due to high demand for drugs among people. This is evident by wide scale recall of drugs in India. 
  • Low R&D investment: India only invests 0.7% of its GDP for research and investment. This is very low compare to the demand in the sector 
  • International Challenges 
    • Global Pharma companies accuse Indian pharma companies as an abuser of Patent laws and criticise India’s Compulsory Licensing Policies. 
    • India nearly 90% depend on China for its Active Pharmaceutical Ingredients 


  • Implementing the recommendation of Malshekar committee on drug regulation 
    • Recommend a new structure for the Drug Regulatory System in the country including the setting up of a National Drug Authority 
    • Recommended that the State Drug Control Organisations should be urgently strengthened. (for source) 
  • Creating a Digital Database for patients, drug usage and risk associated with the intake of drug 
  • Revise the ethical code for Pharma companies to discontinue freebies and gifts 
  • Government need to Upgrade the quality standards and qualities of Medical representatives and drug sellers. 
  • Promote country specific research for R&D and increasing the R&D spending  
  • Rework with the IPR policies to make Indian Pharma companies for encouraging more patents. 
  • Government need to frame a National Plan on self-sustaining in API’s and avoid over dependence on China. 
  • Government need to frame a policy to Utilise the traditional Knowledge in drug manufacturing  

Though the sector is highly capital intensive, the sector developed into a global leader in Pharma products. Now It is time to implement better policies in regulation and encourage the sector to produce more API’s in India to avoid over dependence. 

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