Pharma Sector – Drug Pricing, NPPA, FDC, Generics, etc.

Not business as usual: On upholding India’s reputation for quality drugs

Note4Students

From UPSC perspective, the following things are important :

Mains level: Issues related to Pharma Industries; India’s hegemony;

Why in the News?

The pharmacy of the Global South is facing a reputation crisis after cough syrups made by Indian pharmaceutical companies were found to contain harmful levels of diethylene glycol and/or ethylene glycol.

Why is the pharmacy of the Global South facing a reputation crisis?

  • Quality Control Failures and Contaminated Products:
    • Gambia (2022): Cough syrups made in India containing diethylene glycol and ethylene glycol killed 66 children.
    • Uzbekistan (2022): Similar contamination led to the deaths of 65 children.
    • U.S. (2023): India-made eye drops contaminated with drug-resistant bacteria caused 3 deaths and 8 cases of blindness.
  • Illegal Manufacturing and Unapproved Drugs: Unauthorized drug production and export are damaging India’s credibility. Example: Aveo Pharmaceuticals (Maharashtra) illegally exported unapproved opioid combinations to West Africa, exposed by a BBC investigation in 2023.
  • Regulatory Lapses and Weak Oversight: Inconsistent enforcement by regulatory authorities enables violations. Example: State drug authorities in India have issued licenses for unapproved Fixed Dose Combinations (FDCs) without clearance from the Central Drugs Standard Control Organization (CDSCO).
  • Global Scrutiny and Trade Barriers: Increased surveillance by international health bodies and trade restrictions. Example: The WHO’s alert on toxic cough syrups led to enhanced inspections of Indian pharmaceutical exports, impacting trade with African and Southeast Asian nations.

How does this impact India’s hegemony?

  • Erosion of Soft Power and Global Reputation: India’s image as the “Pharmacy of the Global South” is under threat due to quality concerns and regulatory lapses. Example: The WHO alerts on contaminated cough syrups in Gambia and Uzbekistan have damaged India’s credibility as a reliable supplier of affordable medicines.
  • Reduced Diplomatic Influence in Developing Countries: Many nations in Africa and Southeast Asia, which depend on Indian pharmaceuticals, may seek alternative suppliers, weakening India’s influence in these regions. Example: Countries like Nigeria and Kenya exploring Chinese and Brazilian pharmaceutical alternatives.
  • Economic and Trade Consequences: Heightened global scrutiny could lead to export restrictions and trade losses, affecting India’s dominance in the generic drug market. Example: In 2023, the U.S. imposed tighter checks on Indian pharmaceutical imports following incidents of contaminated eye drops, impacting Indian drug exports.

What is the extent of India’s pharmaceutical exports?

  • Total Export Value: India’s pharmaceutical exports were valued at USD 27.85 billion, contributing substantially to the nation’s economy.
  • Global Market Share: India stands as the world’s third-largest producer of pharmaceuticals by volume, supplying approximately 20% of global generic drugs, with North America being a major recipient.
  • Key Export Destinations: The United States remains the largest importer of Indian pharmaceutical products, accounting for 17.90% of India’s total merchandise exports in this sector.
    • India supplies about 26% of Africa’s generic pharmaceutical market, highlighting its role as a key provider of affordable medicines on the continent.

What steps has the Indian government taken in this situation?

  • Strengthening Regulatory Oversight: The Central Drugs Standard Control Organization (CDSCO) has intensified inspections of pharmaceutical manufacturing units to ensure compliance with Good Manufacturing Practices (GMP). Example: Following the Gambia and Uzbekistan incidents, the government ordered inspections of 76 cough syrup manufacturers across 20 states, leading to the suspension of several licenses.
  • Policy Reforms and Legal Action: The government introduced a mandatory quality certification for drug exports to certain countries to prevent the export of substandard medicines. Example: After the Aveo Pharmaceuticals case, the Maharashtra government revoked the company’s manufacturing license and seized 13 million illegal medicines.
  • International Collaboration and Transparency: The Indian government has increased cooperation with the World Health Organization (WHO) to address quality concerns and strengthen pharmacovigilance. Example: India joined hands with African health regulators to enhance quality assurance for pharmaceuticals exported to African countries.

Way forward: 

  • Strengthen Regulatory Oversight: Implement stricter quality controls, regular audits, and a centralized tracking system to ensure compliance with global standards.
  • Enhance Global Collaboration: Partner with international health bodies and key importing nations to improve quality assurance and rebuild trust in Indian pharmaceuticals.

Mains PYQ:

Q Why is there so much activity in the field of biotechnology in our country? How has this activity benefitted the field of biopharma? (UPSC IAS/2018)

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