Regulation of Pharma Industry

IN NEWS:

• In the recent past, India has been hit by some major pharma concerns. The world largely depends on Indian pharmaceutical industry but rising concerns over quality and lack of drug regulations policy leads to the question whether India is failing in its role.

EXISTING REGULATORY REGIME:

• Drugs and Cosmetics Act of 1940
  • The Drugs and Cosmetics Act of 1940 creates a web of regulatory authorities to govern the process at both the central and the state levels.
  • Under the Act, Central Drugs Standard Control Organisation (CDSCO) is responsible for approval of drugs, conduct of clinical trials, laying down the standards for drugs, control over the quality of imported drugs.
  • It also coordinates the activities of State Drug Control Organizations by providing expert advice with a view of bring about the uniformity in the enforcement of the Drugs and Cosmetics Act.
  • Further, CDSCO along with state regulators, is jointly responsible for grant of licenses of certain specialized categories of critical Drugs such as blood and blood products, I. V. Fluids, Vaccine and Sera.
  • State Drug Regulatory Authorities (SDRAs) regulate drug policies at the state level. Falling under the ambit of the respective Health Departments of each state, SDRAs are tasked with limited aspects of drug regulation.
• The Central Drugs Standard Control Organisation (CDSCO) under Directorate General of Health Services, Ministry of Health & Family Welfare is the National Regulatory Authority (NRA) of India.

ISSUES & CHALLENGES:

• Weak quality monitoring system:
  • A report by United States Trade Representative (USTR) found that 20% of all pharmaceutical products sold on the Indian market are counterfeit. This raises questions on the effectiveness of regulators in ensuring quality standards in pharma sector.
• Under-resourced regulators:
  • Indian pharmaceuticals companies often outsource their manufacturing to smaller units. This creates a bigger problem as the country lacks the resources to maintain a regular quality check on these products.
• Complexity in regulation:
  • Besides the lack of transparency, the complex distribution of regulatory powers across authorities without much oversight affects the functioning of regulatory bodies.
• Dependence on imports for Active Pharma Ingredients (API)
  • Despite being a leading supplier of medicines to several countries, Indian pharmaceutical industry is heavily dependent on China for Active Pharmaceutical Ingredients (API). 77% of APIs are imported from China.
• Lack of transparency:
  • There continues to be a lack of public databases on violations, inspections, and the history of pharmaceutical brands.
• Opacity in CDSCO’s functioning:
  • In 2012, the Parliamentary Standing Committee on Health and Family Welfare came out with scathing observations on the lack of transparency in the regulator’s functioning. The committee recommended that CDSCO come up with a clear set of written guidelines on the selection process of experts with an emphasis on expertise in the area of drugs.
• Ambiguity with existing legislations:
  • The absence of clear rules in new areas of business, such as digital marketplaces, has led to confusions.
  • For instance, the Delhi and Madras High Courts took divergent positions on online sale of drugs: the former prohibiting the same, and the latter allowing the same till the government brought into effect its rules on e-pharmacies.
• Unfriendly investor regime:
  • IPR regime of India is not favourable to Pharma industry, owing to the compulsory licensing provisions and restrictions on evergreening of patents. Besides this, price of many drugs are regulated by the government. This makes Indian pharma sector less attractive for foreign investors.

WAY FORWARD:

Drugs, Medical Devices and Cosmetics Bill, 2022

• To accommodate changing requirements and encourage the adoption of new technology, the Union Ministry of Health and Family Welfare released a draft bill in July 2022 to replace the existing Drugs and Cosmetics Act. However, the bill can be made more effective by adding the following changes:  
  • Bill should have the scope for post-market adverse effect surveillance and ensure a system to look into public grievances, strengthening the rules for punishments for violating regulations.
  • Bill should ensure quality checks of food and supplements and the same should be brought out from the ambit of Food Safety and Standards Authority of India regulation and into the scope of this Bill.
  • All state drug regulatory bodies could be merged with the Central Drugs Standard Control Organisation (CDSCO) to ensure “one quality one standard” for Indian drugs.
  • The Bill should treat drugs from Ayurveda, Siddha, Sowa Rigpa, Unani And Homoeopathic Drugs with the same scrutiny as applied for modern medicine drugs. A 10-year period can be given to the manufacturers to comply with this.

PRACTICE QUESTION:

Q. Effective regulation of pharmaceutical sector is important for India to emerge as a reliable supplier of high-quality, affordable medicines. Discuss.