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

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

What is the NPPA’s role in fixing drug prices?


From UPSC perspective, the following things are important :

Prelims level : NPPA

Mains level : Drugs price regulation

Consumers may have to pay more for medicines and medical devices if the National Pharmaceutical Pricing Authority (NPPA) allows a price hike of over 10% in the drugs and devices listed under the National List of Essential Medicines (NLEM), this coming month.

Who regulates Drugs prices?

  • The NPPA was set up in 1997 to fix/revise prices of controlled bulk drugs and formulations and to enforce price and availability of the medicines in the country, under the Drugs (Prices Control) Order, 1995-2013.
  • Its mandate is:
  1. To implement and enforce the provisions of the DPCO in accordance with the powers delegated to it
  2. To deal with all legal matters arising out of the decisions of the NPPA
  3. To monitor the availability of drugs, identify shortages and to take remedial steps
  • The NPPA is also mandated to collect/maintain data on production, exports and imports, market share of individual companies, profitability of companies etc., for bulk drugs and formulations and undertake and/ or sponsor relevant studies in respect of pricing of drugs/ pharmaceuticals.

How does the pricing mechanism work?

  • Prices of Scheduled Drugs are allowed an increase each year by the drug regulator in line with the Wholesale Price Index (WPI) and the annual change is controlled and rarely crosses 5%.
  • But the pharmaceutical players pointed out that over the past few years, input costs have flared up.
  • The hike has been a long-standing demand by the pharma industry lobby.
  • All medicines under the NLEM are under price regulation.

Do you know?

As per the Drugs (Prices) Control Order 2013, scheduled drugs, about 15% of the pharma market, are allowed an increase by the government as per the WPI while the rest 85% are allowed an automatic increase of 10% every year.

How are the prices determined?

  • The ceiling price of a scheduled drug is determined by first working out the simple average of price to retailer in respect of all branded and generic versions of that particular drug formulation.
  • It should have a market share of more than or equal to 1%, and then adding a notional retailer margin of 16% to it.
  • The ceiling price fixed/revised by the NPPA is notified in the Gazette of India (Extraordinary) from time to time.

When are the prices revised?

  • Prices are revised when there is a rise in the price of bulk drugs, raw materials, cost of transport, freight rates, utilities like fuel, power, diesel, and changes in taxes and duties.
  • The cost rises for imported medicines with escalation in insurance and freight prices, and depreciation of the rupee.
  • The annual hike in the prices of drugs listed in the NLEM is based on the WPI.
  • The NLEM lists drugs used to treat fever, infection, heart disease, hypertension, anaemia etc and includes commonly used medicines like paracetamol, azithromycin etc.

Why are inputs costs high?

  • One of the challenges is that 60%-70% of the country’s medicine needs are dependent on China.
  • WPI is dependent on price rise in a basket of a range of goods that are not directly linked with the items that go into the cost of medicines.


UPSC 2022 countdown has begun! Get your personal guidance plan now! (Click here)

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

Draft National Policy for Medical Devices, 2022


From UPSC perspective, the following things are important :

Prelims level : Not much

Mains level : National Policy for Medical Devices, 2022

The government is proposing a new Draft National Policy for Medical Devices, 2022 to reduce India’s dependence on import of high-end medical devices.

Key features of the policy

Objectives: Adopting public-private partnerships to reduce the cost of healthcare, drive efficiency, and aid quality improvements in medical devices manufactured in the country

The key proposals include:

  1. Incentivising the export of medical devices and related technology projects through tax rebates and refunds
  2. Increasing government spending in “high-risk” projects in the medical devices sector
  3. Single-window clearance system for licencing medical devices
  4. Pricing environment with no price control on newly developed innovation in the sector
  5. Allot a dedicated fund for encouraging joint research involving existing industry players, reputed academic institutions and start-ups
  6. Incorporate a framework for a coherent pricing regulation, to make available quality and effective medical devices to all citizens at affordable prices
  7. NPPA (National Pharmaceutical Pricing Authority) shall be strengthened with adequate manpower of suitable expertise to provide effective price regulation balancing patient and industry needs.
  8. Pharmaceuticals Department will also work with industry to implement a Uniform Code for Medical Device Marketing Practices (UCMDMP)

Need for such policy

  • Policy vacuum: India’s medical devices sector has so far been regulated as per provisions under the Drugs and Cosmetics Act of 1940, and a specific policy on medical devices has been a long standing demand from the industry.
  • Meaningful expense on R&D: The policy also aims to increase India’s per capita spend on medical devices. India has one of the lowest per capita spend on medical devices at $3, compared to the global average of per capita consumption of $47.
  • Reducing import dependence: With the new policy, the government aims to reduce India’s import dependence from 80 per cent to nearly 30 per cent in the next 10 years.
  • Becoming a global hub: It aims to become one of the top five global manufacturing hubs for medical devices by 2047.
  • Domestic manufacturing of high-end products: Indian players in the space have so far typically focussed on low-cost and low-tech products, like consumables and disposables, leading to a higher value share going to foreign companies.

Earlier attempts for such policy

  • In February 2020, the government notified changes in the Medical Devices Rules, 2017 to regulate medical devices on the same lines as drugs under the Drugs and Cosmetics Act, 1940.
  • This was necessitated after revelations about faulty hip implants marketed by Johnson & Johnson, exposing the lack of regulatory teeth when it came to medical devices.
  • The government said the transition from partial regulation of selected medical services to the complete regulation and licensing of all medical devices is underway.


UPSC 2022 countdown has begun! Get your personal guidance plan now! (Click here)


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

Global Drug Policy Index inaugurated


From UPSC perspective, the following things are important :

Prelims level : Global Drug Policy Index

Mains level : Not Much

The first-ever Global Drug Policy Index was recently inaugurated.

Global Drug Policy Index

  • It is released by the Harm Reduction Consortium, ranks Norway, New Zealand, Portugal, the UK and Australia as the five leading countries on humane and health-driven drug policies.
  • It is a data-driven global analysis of drug policies and their implementation.
  • It is composed of 75 indicators running across five broad dimensions of drug policy:
  1. Criminal justice
  2. Extreme responses
  3. Health and harm reduction
  4. Access to internationally controlled medicines and
  5. Development

Highlights of the 2021 ranking

  • The five lowest-ranking countries are Brazil, Uganda, Indonesia, Kenya, and Mexico.
  • Norway, despite topping the Index, only managed a score of 74/100.
  • And the median score across all 30 countries and dimensions is just 48/100.

India’s performance

  • India’s rank is 18 out of 30 countries
  • It has an overall score of 46/100.


UPSC 2022 countdown has begun! Get your personal guidance plan now! (Click here)

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

Section 27A of the NDPS Act


From UPSC perspective, the following things are important :

Prelims level : Not much

Mains level : NDPS Act

Last week, the Tripura High Court, in a significant verdict, discovered an oversight in drafting the 2014 amendments to the Narcotics Drugs and Psychotropic Substances Act, 1985.

What is Section 27A?

  • The NDPS had unintentionally rendered a key provision of the Act, Section 27A which provides for punishment of those financing illicit trafficking, inoperable.
  • This section has been consistently evoked since a year after the alleged suicide of a notable Bollywood actor after drugs intoxication.

What is the provision?

  • The NDPS Act, 1985 is the principal legislation through which the state regulates the operations of narcotic drugs and psychotropic substances.
  • It provides a stringent framework for punishing offenses related to illicit traffic in narcotic drugs and psychotropic substances through imprisonments and forfeiture of property.
  • Section 27A of the NDPS Act, 1985, prescribes the punishment for financing illicit traffic and harboring offenders.
  • The court may, for reasons to be recorded in the judgment, impose a fine exceeding two lakh rupees.”

So why is this provision inoperable?

  • The text of the provision says that offences mentioned under Section 2(viiia) sub-clauses i-v are punishable through Section 27A.
  • However, Section 2 (viiia) sub-clauses i-v, which is supposed to be the catalog of offences, does not exist after the 2014 amendment.
  • So, if Section 27A penalises a blank list or a non-existent provision, it can be argued that it is virtually inoperable.

What was the 2014 amendment?

  • In 2014, a key amendment was made to the NDPS Act to allow for better medical access to narcotic drugs.
  • Since the regulation under NDPS was very stringent, despite being a leading manufacturer of morphine, an opioid analgesic used as a painkiller, it was difficult to access the drug even for hospitals.

Exceptions for essential drugs

  • The 2014 amendment essentially removed state-barriers in transporting, licensing drugs classified as “essential narcotic drugs”, and made it centralized.
  • This was done by first introducing a provision in Section 2 that defines essential narcotic drugs, and subsequently in Section 9 allowing the manufacture, possession, transport, import inter-State, export inter-State, sale, purchase, consumption and use of essential narcotic drugs.
  • The amendment to add the definition of essential narcotic drugs re-lettered the old Section 2(viii)a that was the catalog of offences as Section 2(viii)b, and under the Section 2(viii)a, defined essential narcotic drugs.
  • However, the drafters missed amending the enabling provision in Section 27A to change Section 2(viii)a to Section 2(viii)b.

How was this error noticed?

  • In 2016, an accused sought bail before a special judge in West Tripura in Agartala citing this omission in drafting.
  • The accused’s plea was that since Section 27A penalized a blank list, he could not be charged under the offence.
  • The district judge then referred the case to the Tripura High Court.

What did the HC decide?

  • The Law Ministry had argued that the court must overlook the omission and read the legislation as a whole. It also told the court that the provision would be amended to rectify the dissonance.
  • The Tripura HC agreed with the government’s view, but said that it may not be the best solution.
  • The amendment is yet to take place. However, criminal laws cannot be amended retrospectively.
  • Article 20 of the Constitution guarantees protection against double jeopardy.
  • So even if the amendment is brought in, the result of the drafting error could lead to more constitutional questions being raised.

Back2Basics: Article 20 of the Indian Constitution

The Article 20 is one of the pillars of fundamental rights guaranteed by the Constitution of India. It mainly deals with protection of certain rights in case of conviction for offences.

(1) No person shall be convicted of any offence except for violation of a law in force at the time of the commission of the Act charged as an offence, nor be subjected to a penalty greater than that which might have been inflicted under the law in force at the time of the commission of the offence.

(2) No person shall be prosecuted and punished for the same offence more than once.

(3) No person accused of any offense shall be compelled to be a witness against himself.

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

[pib] Indian Certification of Medical Devices (ICMED) Plus Scheme


From UPSC perspective, the following things are important :

Prelims level :  ICMED 13485 PLUS

Mains level : NA

The Quality Council of India (QCI), and the Association of Indian Manufacturers of Medical Devices (AiMeD) have added further features to the ICMED Scheme for Certification of Medical Devices.


  • The ICMED 13485 PLUS, as the new scheme has been christened, will undertake verification of the quality, safety and efficacy of medical devices.
  • It was first launched in 2016.
  • It has been designed to integrate the Quality Management System components and product-related quality validation processes through witness testing of products with reference to the defined product standards and specifications.
  • This is the first scheme around the world in which quality management systems along with product certification standards are integrated with regulatory requirements.
  • This scheme will be an end-to-end quality assurance scheme for the medical devices sector in India.

Details of the scheme

  • This scheme provides the much-needed institutional mechanism for assuring product quality and safety.
  • It will go a long way in assisting the procurement agencies to tackle the challenges relating to the menace of counterfeit products and fake certification.
  • This will also help in eliminating the circulation and use of sub-standard medical products or devices of doubtful origin that could prove to be serious health hazards.

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

Operation Pangea XIV


From UPSC perspective, the following things are important :

Prelims level : Operation Pangea XIV

Mains level : NA

More than 1.10 lakh web links, including websites and online marketplaces, have been taken down in the operation Pangea XIV.

Operation Pangea XIV

  • Code-named “Operation Pangea XIV”, the exercise was coordinated by Interpol.
  • It involved the police, customs, and health regulatory authorities of 92 countries against the sale of fake and illicit medicines and medical products.
  • Indian agencies also participated in the operation, said an official of the Central Bureau of Investigation that is the nodal body for the Interpol in the country.
  • It showed that criminals were continuing to cash in on the huge demand for personal protection and hygiene products due to the COVID-19 pandemic.

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

What is 2-deoxy-D-glucose (2-DG) and is it effective against Covid?


From UPSC perspective, the following things are important :

Prelims level : 2-DG

Mains level : Paper 3- Drug developed by DRDO approved for Covid treatment

About the drug

  • DRDO’s new anti-Covid oral drug, 2-deoxy-D-glucose (2-DG), was recently granted emergency use approval by the Drug Controller General of India (DCGI).
  •  2-DG halts the spread of COVID-19 inside the body cells.
  • Clinical trial results have shown that this molecule helps in faster recovery of hospitalised patients and reduces supplemental oxygen dependence.
  • In efficacy trends, the patients treated with 2-DG showed faster symptomatic cure than Standard of Care (SoC) on various endpoints.
  • A significantly favourable trend (2.5 days difference) was seen in terms of the median time to achieving normalisation of specific vital signs parameters when compared to SoC.

How 2-DG reduces dependence on oxygen

  • The 2 DG drug, like glucose, spreads through the body, reaches the virus-infected cells and prevents virus growth by stopping viral synthesis and destroys the protein’s energy production.
  • The drug also works on virus infection spread into lungs which help us to decrease patients dependability on oxygen.


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

Replicating success in space and pharmaceuticals in knowledge economy


From UPSC perspective, the following things are important :

Prelims level : Not much

Mains level : Paper 3- India's success in space technology and pharmaceuticals

The article underlines India’s success in pharma and space, and also analyses the reasons for India’s inability to replicate the success in other areas.

India’s success in space and pharmaceuticals

  • The launch of Brazil’s Amazonia-1 satellite by the Indian Space Research Organisation (ISRO) comes weeks after India allowed the export of COVID-19 vaccine to Brazil.
  • Taken together, these two examples of technological and scientific cooperation draw attention to the diplomatic potential of India’s knowledge economy.
  • The credit for India’s competitive pricing of satellite launches and pharmaceuticals exports goes entirely to Indian engineering, scientific and technological talent.

Decrease in capability for knowledge-based diplomacy

  • Indian science and technology had something to offer the developing world that the developed economies of the West were either unwilling to provide or did so at much higher cost.
  • Overseas students were drawn to Indian universities and institutions because they offered good quality education at a fraction of the cost of developed country institutions.
  • The appeal of education in India for overseas students has waned.
  • Indian expertise was sought by global organisations such as the Food and Agriculture Organisation (FAO), the United Nations Industrial Development Organisation (UNIDO) and International Rice Research Institute (IRRI).
  • Rail India Technical and Economic Services (RITES), had acquired a global profile with business in Africa and Asia.
  • The development of India’s dairy and livestock economy also attracted global interest.

Factors responsible

  • India lost this leadership in the knowledge economy, barring sectors like space, pharma and information-technology, for two reasons.
  • First, a flight of Indian talent that began in the 1970s and has since accelerated. This has sharply increased in recent years.
  • Second, China has emerged as a major competitor offering equally good, if not better quality, S&T products and services at lower cost.

Consider the question “India’s success in pharma and space indicates its potential. What are the challenges India faces in replicating the success in these two sectors in other areas of the economy?


Global success of space and pharma points to the diplomatic potential of the knowledge industry and to India’s “soft power”. However, the fact that they are the exception rather than the rule points to the lack of political and intellectual support to the development of India’s knowledge base and an inadequate commitment to excellence.

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

What is the Emergency Use Authorization (EUA) for Drugmakers?


From UPSC perspective, the following things are important :

Prelims level : Vaccine for COVID

Mains level : Universalization of vaccines and associated challenges in India

The US drugmaker Moderna said it was applying for emergency use authorisation for its vaccine in India.

Practice question for Mains:

Q. What is Vaccine Nationalism? Discuss various ethical issues involved and its impact on vulnerable populations across the globe.

Emergency Use Authorisation (EUA)

  • Vaccines and medicines, and even diagnostic tests and medical devices, require the approval of a regulatory authority before they can be administered.
  • In India, the regulatory authority is the Central Drugs Standard Control Organisation (CDSCO).
  • The approval is granted after an assessment of their safety and effectiveness, based on data from trials. In fact, approval from the regulator is required at every stage of these trials.
  • This is a long process, designed to ensure that medicine or vaccine is absolutely safe and effective.
  • The fastest approval for any vaccine until now — the mumps vaccine in the 1960s — took about four-and-a-half years after it was developed.

Exceptions for emergency

  • In emergency situations, like the current one, regulatory authorities around the world have developed mechanisms to grant interim approvals.
  • However, there should sufficient evidence to suggest a medical product is safe and effective.
  • Final approval is granted only after completion of the trials and analysis of full data; until then, EUA allows the medicine or the vaccine to be used on the public.

What is the process of getting a EUA in India?

  • India’s drug regulations do not have provisions for a EUA, and the process for receiving one is not clearly defined or consistent.
  • Despite this, CDSCO has been granting emergency or restricted emergency approvals to Covid-19 drugs during this pandemic — for remdesivir and favipiravir in June, and itolizumab in July.

Associated risks

  • The public has to be informed that a product has only been granted a EUA and not full approval.
  • In the case of a Covid-19 vaccine, for example, people have to be informed about the known and potential benefits and risks.

Not a compulsion

  • There has been an ongoing debate over whether people have the option of refusing to take the vaccine.
  • Incidentally, no country has made vaccination compulsory for its people.
  • Initially, all vaccines are likely to be deployed on emergency use authorizations only. Final approval from may take several months, or years.

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

What are Bulk Drugs Parks?


From UPSC perspective, the following things are important :

Prelims level : Bulk Drugs

Mains level : India's pharma sector

Himachal Pradesh is one of the states vying for the allotment of a bulk drug park under a central government scheme announced earlier this year for setting up three such parks across the country.

Try this question:

Q.The drug pricing system in India is an indirect outcome of the growing dependence on China for APIs. Discuss.

What are Bulk Drugs or APIs?

  • A bulk drug also called an active pharmaceutical ingredient (API), is the key ingredient of a drug or medicine, which lends it the desired therapeutic effect or produces the intended pharmacological activity.
  • For example, paracetamol is a bulk drug, which acts against pain.
  • It is mixed with binding agents or solvents to prepare the finished pharmaceutical product, ie a paracetamol tablet, capsule or syrup, which is consumed by the patient.
  • APIs are prepared from multiple reactions involving chemicals and solvents.
  • The primary chemical or the basic raw material which undergoes reactions to form an API is called the key starting material, or KSM.
  • Chemical compounds formed during the intermediate stages during these reactions are called drug intermediates or DIs.

Why is India promoting bulk drug parks?

  • India has one of the largest pharmaceutical industries in the world (third largest by volume) but this industry largely depends on other countries, particularly China, for importing APIs, DIs and KSMs.
  • This year, drug manufacturers in India suffered repeated setbacks due to disruption in imports.
  • Factories in China shut down when the country went into a lockdown, and later, international supply chains were affected as the Covid pandemic gripped the entire world.
  • The border conflict between India and China exacerbated the situation.

What is the Centre’s scheme?

  • The Centre’s scheme will support three selected parks in the country by providing a one-time grant-in-aid for the creation of common infrastructure facilities.
  • The grant-in-aid will be 70 per cent of the cost of the common facilities but in the case of Himachal Pradesh and other hill states, it will be 90 per cent.
  • The Centre will provide a maximum of Rs 1,000 crore per park.
  • A state can only propose one site, which is not less than a thousand acres in area, or not less than 700 acres in the case of hill states.

What does a bulk park offer?

  • A bulk drug park will have a designated contiguous area of land with common infrastructure facilities for the exclusive manufacture of APIs, DIs or KSMs, and also a common waste management system.
  • These parks are expected to bring down manufacturing costs of bulk drugs in the country and increase competitiveness in the domestic bulk drug industry.

Why Himachal?

  • Himachal already has Asia’s largest pharma manufacturing hub, that is the Baddi-Barotiwala-Nalagarh industrial belt, and the state produces around half of India’s total drug formulations.
  • Himachal offers power and water at the lowest tariffs in the country, and the state also has an industrial gas pipeline.
  • It jumped nine places in this year’s ease-of-doing-business rankings declared by the Centre last month, securing the seventh position in the country.

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

Online Pharmacy Regulation in India


From UPSC perspective, the following things are important :

Prelims level : Pharma sector regulations

Mains level : E pharmacy and its benefits

In the last week, India’s online pharmacy market saw two significant merger and acquisition deals. This has suddenly caused activity in a sector from which large investors have shied away due to lack of proper regulations.

Try this easy question:

Q. Discuss the prospects and benefits of online pharmacy in India. (150W)

How is the pharmacy market in India currently shaped?

  • Unlike the US, where the top three pharmaceutical distributors have a 90 per cent share in the market, India’s is a fragmented market with over 8 lakh pharmacies.
  • This gives online pharmacies an opportunity to capture their space without opposing large traditional retailers.
  • Currently, companies in the Indian e-pharmacy space mainly operate three business models — marketplace, inventory-led hybrid (offline/online) and franchise-led hybrid (offline/online) — depending on the way the supply chain is structured.

Rules governing the pharma sector

  • Work on regulations specifically for e-pharmacies has been in progress for several years now.
  • In the absence of clear regulations, online pharmacies currently operate as marketplaces and cater to patients as a platform for ordering medicines from sellers that adhere to the Drugs and Cosmetics Act and Rules of India.
  • Other regulations, like the Information Technology Act and the Narcotic Drugs and Psychotropic Substances Act, also apply.

What do the draft e-pharmacy regulations propose?

  • Draft rules for e-pharmacies sought to define the online sale of medicines, what an e-prescription means and what type of licences online firms would need to get from regulators to operate.
  • The draft had proposed to allow e-pharmacies to get a central licence to operate from the country’s apex drug regulator, which could be used to allow it to operate across the country.
  • It also proposed to define e-pharmacies in a way that would allow them to distribute, sell and stock medicines.
  • The proposed regulations prevent them from selling habit-forming drugs like cough syrups specified in Schedule X of the Indian drug regulations.

Current status

  • Regulations for online pharmacy players have been in the works since 2016 but are yet to come out.
  • The last attempt to clear these regulations saw the draft rules being pushed through two expert committees under the Central Drugs Standard Control Organisation–India’s apex drug regulatory body–in June 2019.

Online pharma is growing in scale

  • While Covid-19 and the subsequent behavioural shift towards e-commerce may have catalyzed growth for online pharmacies, the sector was already poised to grow seven-fold by 2023 to $2.7 billion.
  • This was mainly on account of the challenges faced by physical pharmacies that gave their online counterparts a problem to solve.
  • Experts believe that e-pharmacies will be able to solve the problems that traditional pharmacies couldn’t.
  • But for this, they need to have a large-scale presence that calls for either huge investments or consolidation.


  • The e-pharmacy sector holds immense potential to address the persisting issue of affordability and accessibility of medicines in India.
  • Steps should be taken to foster the e-pharmacy sector with sufficient safeguards and under regulatory control to protect the interest of the consumers.

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

Drug pricing and dependence on China


From UPSC perspective, the following things are important :

Prelims level : APIs, NLEM

Mains level : Paper 3-Issue of India's dependence on China for APIs.

Whether or not the drug pricing system in India resulted in the growing dependence on China for APIs is analysed in this article. 

Incentives for domestic production of APIs

  • The department of pharmaceuticals (DoP) has recently notified the Production-Linked Incentive (PLI) scheme.
  • The scheme aims to encourage domestic production of 41 active pharmaceutical ingredients (APIs), key starting materials (KSMs) and drug intermediaries (DIs).
  • A Drug Security Committee constituted by the DoP had identified 53 APIs with high dependence on China.

Did drug price control policy increase dependence on China?

  • India was self-reliant on APIs until the mid-1990s.
  • Liberalisation in import restrictions led to a gradual influx of APIs from China.
  • India had a more stringent price control policy before the 1990s.
  • If price control system were the culprit, India would not have been self-sufficient in APIs until the mid-1990s.
  • A cost-based price control system that existed until 2013 regulated the prices of both APIs and formulations.
  • The approach to price control shifted from a cost-based to a market-based one since 2013.
  • The new price control policy does not regulate the price of APIs.
  • New price control policy regulates the prices of formulations of those APIs, which figure in the National List of Essential Medicines (NLEM).
  • There are many APIs which do not fall under DPCO but are still imported in a significant way from China.

Understanding the growing dependence on China from the past perspective

  • Even though India now has a less stringent drug price control policy, the dependence on Chinese imports has been growing.
  • The share of China in India’s total import of APIs has increased from 61% in 2011 to 69% in 2019.
  • The experience in India was that firms would tend to rely on imported APIs if they have an option.
  • The Hathi Committee (1975), which had looked into why Indian firms were not engaging in the production of APIs, found that the capital invested to turnover ratio of APIs was much lower as compared to formulations.
  • This ratio was 1:1 for APIs at best and 1:2.6 for formulations on average, and in some cases, as high as 1:7.2.
  • Subsequently, various measures were adopted.
  • The ‘ratio parameter’ mandatorily required the producers of formulations to produce a certain quantity of APIs.
  • It was the government interventions to overcome the market failure that resulted in India attaining self-sufficiency in APIs.

Consider the question “What are the APIs? Examine the implications of India’s dependence on imports for API and suggest the measures to reduce such dependence.”


An enquiry into the causes of dependence on China needs to go much beyond price control policy and look into whether the state continued to play a proactive role during the post-1991 period to maintain an ecosystem to enhance the competence of Indian API industry.


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

Decoupling pharmaceutical industry from China should be strategic


From UPSC perspective, the following things are important :

Prelims level : APIs

Mains level : Paper 3- Indian pharmaceutical industry

Abrupt ban on import from China would harm the India pharmaceutical industry and disrupt the supply of several essential medicines. Any attempt at reducing the dependence on China for APIs should be strategies, argues the author.

Dependence of Indian pharma industry on China

  •  India is the third-largest producer of finished drugs in the world.
  • However, India relies significantly on China for supplies of active pharmaceutical ingredients APIs.
  • An estimated 70 per cent of API requirements of India’s pharmaceutical industry are sourced from China.
  • For some drugs, such as paracetamol and ibuprofen, this dependence is almost 100 per cent.
  • This import reliance has been fuelled by environmental controls in India and competition with China, which has higher volumes of production and lower costs.

Implications of banning import from China

  • Restricting or banning the import of APIs would cause significant disruption to the Indian pharmaceutical industry
  • The pharmaceutical industry had $40 billion in revenues in 2018-19, according to Pharmexcil.
  • Such a prospect is especially of concern to potential patients.
  •  Indian pharmaceutical industry annually exports $20 billion worth of medicine.
  • An ad hoc or reactive decoupling could disrupt the production of a wide range of medicines in India and globally.
  • Such disruption could affect the availability of Dexamethasone and painkillers, such as paracetamol and ibuprofen, as well as antibiotics, such as penicillin.
  • The impacts would be especially high in low and middle-income countries.
  • In many African countries, in fact, India supplies almost 50 per cent of the medicines in value terms.

Lessons from the past: Policy initiative matters

  • Market share of foreign-owned multinationals in India was 80-90 per cent in 1970 in the pharmaceutical industry.
  • It fell to 50 per cent by the early 1980s, and down to 23 per cent today.
  • The prices of medicines in India fell from being amongst the highest in the world to amongst the lowest.
  • But this did not happen through sudden decoupling from foreign multinationals or a complete boycott or ban on imports.
  •  The 1970 Indian Patent Act removed product patent protection in pharmaceuticals.
  • So, the 1970 Patent Act is widely lauded for facilitating the growth of India’s industry.
  • India also benefited from the 1973 Foreign Exchange Regulation Act (FERA) and the subsequent New Drug Policy (1978).
  • Thus, a series of policy initiatives succeeded in tilting the balance in favour of Indian-owned firms.

But does it mean we have to depend on China forever?

  • No, but reducing dependence on China will not be easy to achieve.
  • In India, any decoupling from China must be strategic, with significant policy support.
  • It will take time for a paced indigenisation.

Government moves to reduce dependence for API

  • In March, the government announced Rs 3,000 crore to develop three bulk drug parks.
  • The government also announced Rs 6,940 crore to manufacturers of 53 bulk drugs over the next eight years.
  • Planning ahead towards greater domestic production of APIs, as well as reduced dependence on China, is an understandable and sensible policy objective.
  • Despite a decline in recent decades, India has a stronger starting point than most countries given the continued presence of some API production capabilities.
  • Indian firms have capacities, for instance, to produce COVID-19 treatments, including Remdesivir.

Consider the question “What are the APIs? Why India depends on other countries for it and what are implications of it? Suggest ways to reduce this dependence.”


In the short run, boycotts or bans would be counter-productive for the Indian industry, while also affecting access to much-needed medicines to India’s citizens and beyond. In the long run, however, reducing dependence on China would be strategically prudent.

Back2Basics: What are APIs?

  • Active pharmaceutical ingredient (API), is the term used to refer to the biologically active component of a drug product (e.g. tablet, capsule).
  • Drug products are usually composed of several components.
  • The API is the primary ingredient.
  • Other ingredients are commonly known as “excipients” and these substances are always required to be biologically safe, often making up a variable fraction of the drug product.
  • The procedure for optimizing and compositing this mixture of components used in the drug is known as “formulation.”

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

What are Biosimilars?


From UPSC perspective, the following things are important :

Prelims level : Biosimilars

Mains level : Paper 3- What are the bio-similar molecules and their applications in the pharma sector?

Recently an Indian pharma company has been granted a USFDA approval for Insulin Glargine, a biosimilar. This article briefly introduces us to this term, complexities involved in its manufacturing and also explains why the USFDA approval create hype.

The story of simple molecules and some difficult diseases

  • Ever since modern medicine started to emerge post the Industrial Revolution, simple molecules have been used to treat most diseases.
  • While these formulations are highly effective against some illnesses, they aren’t particularly effective against more complex diseases like cancer.
  • Our immune system has evolved over millions of years to specifically defend against outside intruders.
  • But cancer isn’t like most diseases.
  • It’s not caused by an invasion of a foreign pathogen.
  • Instead, it’s a byproduct of rogue cells that destroy our bodies from within.
  • To this end, using simple molecules to defend against a barrage of mutating versions of our own cells is an exercise in futility.

What is biologic?

  • A biologic is manufactured in a living system such as a microorganism, or plant or animal cells. Most biologics are very large, complex molecules or mixtures of molecules. Many biologics are produced using recombinant DNA technology.
  • What we probably need is a biologic or a complex protein isolated from natural sources that can mimic our immune cells.
  • Maybe this would help us in fighting cancer.

So, Biosimilars are..

  • A biosimilar is a biological product that is developed to be similar to an already FDA-approved biologic, known as the reference product. It can be tempting to think of a biosimilar as a “generic” version of the reference product.
  • But biosimilar is not an exact duplicate of another biologic. There is a degree of natural variability in all biological products; it is not possible to generate a precise copy of a product that comes from living cells. All biologics—including reference products—show some batch-to-batch variation.

Utility of patents in the pharmaceutical industry

  • Success in this market is deeply intertwined with the research and development process that characterizes the pharmaceutical industry.
  • It might take 5 years for you to develop a new drug and you might still need another 10 years to clinically test the product and get the necessary approvals from the regulatory agencies.
  • This is a capital intensive process and the only way to remunerate the pharma company’s contribution is to protect their investment through patent laws.
  • This way the companies can be incentivised to invest more in research and we can ensure a steady supply of new drugs that could cure the greatest maladies of modern time.

What happens when the patent expires?

  • Once the patent expires, other companies can market their own version of the drug (copycats) if they can figure out how to synthesize it.
  • Consider — Aspirin. It’s a simple molecule drug and it’s quite easy to replicate the manufacturing process.

Why biologics would be difficult to replicate after the patent expires

  • Biologics are harvested from living cells and are often produced using complicated manufacturing processes.
  • Most modern biologics are assembled inside vats — or bioreactors — that house genetically engineered microbes or cell cultures and can often take a whole decade of research to perfect.
  • So replicating the process isn’t exactly a cakewalk.
  • Meaning if you want to market your own version of a “biologic” once all the patents expire, you need some expertise and India’s Biocon is at the forefront of this revolution.
  • For the past few years, they’ve been building a “biosimilar pipeline” — copycats of famous biologics and they’ve been using it to fight cancer, diabetes, and arthritis.
  • And it’s not all that easy for most pharma companies to enter this market.

Why marketing a drug in the US gather headline?

  • Because the US provides an opportunity like no other.
  • Buying drugs here is expensive and pharmaceutical companies make a killing in the process.
  • It might not necessarily bode well for consumers.
  • But it does provide a lucrative market for potential Indian manufacturers who are looking to sell their products elsewhere.

Consider the question “What is biosimilar technology? How is it different from generic medicine? Discuss its application.”


Growing expertise of Indian pharmaceutical companies in the complex research area bodes well for the Indian pharma sector which is known otherwise for the manufacturing of generic medicines.


Reference Source:

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

Fund for pharmaceutical innovators


From UPSC perspective, the following things are important :

Prelims level : Drug patents

Mains level : Paper 3- Drug pricing issue

Pricing of the drugs in a contentious issue across the world. In some countries like the U.S. price of the drug at 100000%  of the production cost is not atypical. In India, prices are much lower. This article suggests the novel of Health Impact Fund which could strike the balance between affordability and R&D.

Medicines: Humanities greatest achievements

  • They have helped attain dramatic improvements in health and longevity as well as huge cost savings through reduced sick days and hospitalizations.
  • The global market for pharmaceuticals is currently worth ₹110 lakh crore annually, 1.7% of the gross world product (IPFPA 2017, 5).
  • Roughly 55% of this global pharmaceutical spending, ₹60 lakh crore, is for brand-name products, which are typically under patent.

Issue of high drug prices

  • Commercial pharmaceutical research and development (R&D) efforts are encouraged and rewarded through the earnings that innovators derive from sales of their branded products.
  • These earnings largely depend on the 20-year product patents they are entitled to obtain in WTO member states.
  • Such patents give them a temporary monopoly, enabling them to sell their new products without competition at a price far above manufacture and distribution costs, while still maintaining a substantial sales volume.
  • In the United States, thousandfold (100000%) markups over production costs are not atypical.
  • In India, the profit-maximising monopoly price of a new medicine is much lower, but similarly unaffordable for most citizens.

Covering large R&D costs: before we think about a solution

  • To be sure, before such huge markups can yield any profits, commercial pharmaceutical innovators must first cover their large R&D costs.
  • Currently, this cost is  ₹14 lakh crore a year (Mikulic 2020).
  • This includes the cost of clinical trials needed to demonstrate safety and efficacy, the cost of capital tied up during the long development process, and the cost of any research efforts that failed somewhere along the way.

Three concerns with R&D

1. Neglect of the diseases suffered by the poor

  • Innovators motivated by the prospect of large markups tend to neglect diseases suffered mainly by poor people, who cannot afford expensive medicines.
  • The 20 WHO-listed neglected tropical diseases together afflict over one billion people (WHO n.d.) but attract only 0.35% of the pharmaceutical industry’s R&D (IFPMA 2017, 15 and 21).
  • Merely 0.12% of this R&D spending is devoted to tuberculosis and malaria, which kill 1.7 million people each year.

2. High prices of new medicines

  • Thanks to a large number of affluent or well-insured patients, the profit-maximising price of a new medicine tends to be quite high.
  • Consequently, most people around the world cannot afford advanced medicines that are still under patent.
  • This is especially vexing because manufacturing costs are generally quite low.

3. Rewards are poorly correlated to the therapeutic value of drugs

  • Firms earn billions by developing duplicative drugs that add little to our pharmaceutical toolbox — and billions more by cleverly marketing their drugs for patients who won’t benefit.
  • These large R&D investments would be much better spent on developing new life-saving treatments for deadly diseases plaguing the world’s poor.

Health Impact Fund: Solution to the above problems

  • The Health Impact Fund as an alternative track on which pharmaceutical innovators may choose to be rewarded.
  • The basic idea behind it:
  • Any new medicine registered with the Health Impact Fund would have to be sold at or below the variable cost of manufacture and distribution.
  • But would earn ten annual reward payments based on the health gains achieved with it.

How health impact fund would work?

  • The Health Impact Fund could start with as little as ₹20000 crore per annum and might then attract some 10-12 medicines, with one entering and one exiting in a typical year.
  • Registered products would then earn some ₹17000-₹20000 crore, on average, during their first ten years.
  • Of course, some would earn more than others – by having greater therapeutic value or by benefiting more people.
  • Long-term funding for the Health Impact Fund might come from willing governments.
  • Those countries would contribute in proportion to their gross national incomes — or from an international tax, perhaps on greenhouse gas emissions or speculative financial transactions.
  • Non-contributing affluent countries would forgo the benefits: the pricing constraint on registered products would not apply to them.
  • This gives innovators more reason to register as they can still sell their product at high prices in some affluent countries and affluent countries reason to join.

The fund will have the following 5 major benefits

1. Help the Neglected areas of research

  • The Health Impact Fund would get pharmaceutical firms interested in certain R&D projects that are unprofitable under the current regime – especially ones expected to produce large health gains among mostly poor people.
  • With the Health Impact Fund in place, there can be more research on diseases like Tuberculosis or Malaria, even Covid.
  • We can develop rich arsenal of effective interventions and greater capacities for targeted responses quickly.

2. Rewarding health outcomes and not sales

  • The Health Impact Fund will focus on performance of drugs and not make it a marketing stunt.
  • Like in its model, firms would earn annual reward payments based on the health gains achieved with by the medicine.
  • Present scenario: firms seek to influence hospitals, insurers, doctors and patients to use their patented drug and to favour it over other more effective medicines.

3. Sustainable research and marketing system

  • A reward mechanism oriented towards health gains rather than high-markup sales would lead to a sustainable research-and-marketing system.
  • How? Simple for health gains, innovators will have to ensure:
  • They will have to think holistically about how their drug can work in the context of many other factors relevant to treatment outcomes.
  • They will need to think about therapies and diagnostics together, in order to identify and reach the patients who can benefit most.
  • They will need to monitor results in real time to recognize and address possible impediments to therapeutic success.
  • Finally, they will have need to ensure that patients have affordable access to the drug and are properly instructed and motivated to make optimal use of it with the drug still in prime condition.
  • Such a system would obviously make research more streamlined and sustainable.

4. No fear of compulsory licence clause

  • Participation of commercial pharmaceutical firms is crucial for tackling global pandemics.
  • At present such firms have issues with use of compulsory licences by governments as it divest them of their monopoly rewards.
  • Health Impact Fund registration would remove this risk as states would have no reason to interfere with innovators whose profit lies in giving real and rapid at-cost access to their new product to all who may need it.

5. Holistic approach

  • Multinational firms can collaborate with national health systems, international agencies and NGOs, to build a strong public-health strategy around its product.
  • The highest goal here would be complete eradication of many communicable diseases(Example: Malaria) which we are fighting right now.

Can we apply the above to Covid-19?

  • Applying it to a new disease like COVID-19 is complicated by the fact that we lack here a well-established baseline representing the harm the disease would have done in the absence of the new medicine to be assessed.
  • For malaria, such a baseline can be established on the basis of a stable disease trajectory observable over many years.
  • In the case of a new epidemic, one must rely on a modelling exercise that estimates the baseline trajectory on the basis of obtainable data about the spread of the disease and its impact on infected patients.
  • This surely is a challenging undertaking which cannot yield precise or uncontroversial results about what damage the epidemic would truly have done if the vaccine or medication in question had not appeared.

Consider the question “Drug pricing has always plagued the authorities and policymakers. Cap it and you tend to lose on innovation. Deregulate it, and high prices make it unaffordable. In light of this, examine the issues with the R&D in the pharmaceutical sector and suggest the ways to strike the balance between lives and innovation.”


The Health Impact Fund would give innovators the right incentives. It would guide them to ask not: how can we develop an effective product and then achieve high sales at high markups? But rather: how can we develop an effective product and then deploy it so as to help reduce the overall disease burden as effectively as possible?

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

Private: Pharmaceutical Sector in India – Opportunities and Challenges

India’s pharmaceutical sector is expected to be one of the very few industries that will record growth in this fiscal year amid strains from the COVID-19 pandemic and the Great Lockdown. Investors are looking at pharma companies as safer bets and the sudden surge in global demand for cheap and reliable drugs has presented a rare opportunity for the Indian pharmaceutical sector to transition from ‘Pharmacy of the World’ to ‘a Global Research Hub’. However, there are also issues in the way of India reaching this goal.

What is the current status of the Indian pharmaceutical sector?

  • India is considered as the ‘pharmacy of the world’ due to its ability to produce a wide range and great volume of medicines, that too at low costs.
  • Between 2000 and 2019, FDI of $16.2 billion was realized.
  • Currently, the sector is one of the top 5 sectors that are bringing down India’s trade deficit with other countries.
  • India is the largest producer of vaccines in the world – a title held by it even before the advent of COVID-19 and the demand stimulated by it. Its supplies meet more than 50% of the global demand for different vaccines
  • It is one of the leading producers of generic medicines.
  • A noted landmark in the growth history of the Indian pharmaceutical sector was when Cipla (an Indian firm) marketed anti-HIV medicines at 1/25th the market cost in sub-Saharan Africa.
  • 62% of the revenue contribution to this sector is from bio-pharmaceuticals.
  • More than 80% of the antiretrovirals used for treating AIDS around the world is supplied by India.
  • Of the Indian pharmaceutical sector, generic drugs constitute the largest segment with a market share of 70%.
  • OTC drugs constitute the next biggest segment with 21% of the market segment. Patented drugs account for 9% of the market share.
  • It has a presence even in countries like the USA, Japan, Australia and countries in Western Europe, which are noted for their stringent pharmaceutical standards.
  • Apart from this, India has been showing substantial progress in its ‘Ease of Doing Business’ ratings and the ‘Global Competitiveness Index’ rankings. This is an indication of the business environment improvement- and would attract more foreign players.

How is the sector regulated in India?

  • India has some of the toughest legislation in the world for drug regulation. It even provides for life imprisonment as a penalty for manufacturing spurious drugs.
  • According to the Drugs and Cosmetics Act, in case any sub-standard drugs are detected, the remaining stocks are to be recalled.
  • Under the provisions of the Drugs and Cosmetics Act of 1940, manufacturing, sale and distribution of drugs are regulated mainly by the state authorities under the states’ health departments.
  • Other aspects like licensing, approval, regulation of clinical trials and the quality assurance are handled by the Drugs Controller General of India at the central level.
  • The office of DCGI functions under the Central Drugs Standard Control Organisation (CDSCO). He/ she is advised by the Drug Technical Advisory Board and the Drug Consultative Committee.
  • The ultimate implementation and regulation of the drug manufacturers are carried out by drug inspectors, who are the foot-soldiers of the regulatory framework.

What are the government efforts for this sector?

  • FDI: The government has allowed 100% FDI in Greenfield pharmaceutical projects and 74% FDI in brownfield pharmaceutical projects. This move encourages investment for R&D work- especially for finding solutions for endemic health problems.
  • The government had launched the Pharma Vision 2020 with the following objectives:
  1. Transform India into a global leader in low-cost generics and end-to-end drug discovery and development.
  2. Make India one of the top 5 pharma innovation hubs in the world- this would entail India launching one out of every five new drugs globally.
  3. Meet the rising demand from the growing middle-class and quickly ageing population, which would exert significant pressure on the country’s healthcare system.
  • The government had launched the Pradhan Mantri Bhartiya Janaushadhi Pariyojana to supply low-cost pharma drugs to the economically weaker sections.
  • The government, in 2019, released draft rules for regulating the e-pharmaceutical companies. A regulatory platform is to be set up by the centre.
  • Drug intermediaries produced or imported into the country are to be tracked using QR codes according to a 2019 government initiative. This is soon to be made mandatory and will ensure quality and transparency in the sector.
  • In March this year, the Union Cabinet approved the establishment of mega ‘Bulk Drug Parks’ in association with state governments. These parks will have common facilities like solvent recovery, effluent treatment, distillation, etc.
  • The Cabinet also approved the ‘Production Linked Incentive Scheme’ for encouraging domestic manufacturing of drug intermediaries.

How is India making use of the opportunity presented by COVID-19 crisis?

  • India has been making use of ‘medical diplomacy’ to increase its influence in the international sphere.
  • Medical diplomacy is the state’s use of essential medicines’ trade and medical personnel’s dispatch to affected countries to improve its international relations.
  • India has been supplying essential drugs like hydroxychloroquine and paracetamol to different categories of countries ranging from USA, Russia, France and UK to African and Latin American countries like Zambia, Uganda, Niger, Kenya, Colombia and Uruguay.
  • In the neighbourhood, the drugs are being supplied to Afghanistan, Bangladesh, Bhutan, Nepal, Maldives, Mauritius, Myanmar and Sri Lanka.
  • While some of these countries received the drugs on a commercial basis, others received it as grants from India.
  • Apart from this, India is also dispatching its medicinal personnel to neighbours like Nepal.

What are the issues and challenges?

On the regulatory side:

  • Timely detection: The detection of spurious drugs often takes place much later than it is released into the market, which may be even months. Hence the CDSCO’s power to recall the drug stocks remains ineffective.
  • Insufficient capacity: A 2019 report highlighted the insufficient capacity and number of drug inspectors, lack of records on errant manufacturers, etc. The issue of uneven punishments for violators and incomplete enforcement of recalls were also highlighted.
  • Communication gap: The report also emphasised the communication gap between the drug regulatory bodies at the central and state levels.
  • Lax implementation: The lax implementation of regulations in India is evident from India’s handling of the NDMA (a carcinogen) contamination in ranitidine (a medication for treating heartburn).
  • While other countries’ regulators were recalling the product and studying its safety profile, the DCGI simply asked the drug manufacturers to ‘verify and take appropriate measures to ensure patient safety’.


On the quality side:

  • Assessment by Bureau of Pharma Public Sector Undertakings of India found that a significant portion of low-cost generics supplied under the PMBJP since 2018 was sub-standard. This led to batches being recalled.
  • Increased demands from the emergence of anti-microbial drug-resistant pathogens, changing lifestyles, demographics, the spread of non-communicable disease and other aspects have triggered several profit-driven firms to cut corners.

On the marketing side:

  • A significant slowing in the flow of prescriptions due to a drop in quality of medical representatives (MRs). The job is being done even by non-science graduates and undergraduates.
  • The pharma firms have been reducing the time and money spent on training MRs- in some cases, completely doing away with any training and directly putting the MRs on the field.
  • Compared to this, in countries like Russia, only medical graduates can be pharma sales representatives. In the EU, personnel are required to pass stringent examinations to qualify as MRs. They are also required to periodically renew their certification.
  • Pharma sales growth through the ‘Prescription Generation Model’ (mutual dependence between the doctors and the MRs for prescription generation) has been declining. Consequently, there has been an increase in return of expired stocks from stockists – sometimes as high as 4 to 5% (accepted level is 1%).
  • Use of freebies and gifts from the pharma firms to doctors to unethically promote the prescription of their drugs.

On capital and R&D aspects:

  • Indian pharmaceutical sector lags in the R&D aspect for developing new medicines- far behind other WTO countries. There has only been limited focus on research and innovation.
  • Developing novel drugs is a completely different game given its high capital and risk requirements. According to a 2016 assessment, it takes 2.87 billion USD to develop and get a drug approved.
  • The private capital is generally funnelled into SMEs- for expanding,  building larger factories, developing and registering generic drugs, acquisitions and product launches in different markets- not in producing novel pharmaceuticals.
  • R&D expense to GDP ratio of India is low- a mere 0.6%- compared to other countries. Eg: 2.1% in China. This is unfortunate as India has the required human capital and academic strengths to develop such novel drugs.

International aspects:

  • There is stiff competition from firms in countries like China, Israel and Japan.
  • Hostile and negative lobbying by the big players who frequently accuse Indian firms of violating patent laws.
  • Immediately following the 2005 implementation of the TRIPS agreement, the sector saw a surge in the number of patents grants. However, with the weakening of the Intellectual Property environment, there was significant waning.
  • Many countries have started working on policies to develop their own domestic pharmaceutical sector. This will reduce the demand for India’s generic drugs’ exports in the long run.
  • Warning letters about CGMP (Current Good Management Practices) violations from the US FDA to India has been historically high. In 2019, 34% of the FDA warnings were issued to Indian firms. In 2015, India firms had 50% share in such FDA warnings.

The API issue:

  • API or Active Pharmaceutical Ingredient is the raw material used for the production of pharmaceutical drugs. These are the components of the drug that are responsible for the actual curative/ therapeutic function.
  • China is one of the major producers of the APIs- especially in Hubei (of which Wuhan is the capital), Zhejiang and Jiangsu (neighbouring regions). The API production took a hit due to the COVID-19 outbreak and the subsequent lockdown in China.
  • This came to affect a significant part of world’s API supply.
  • India, for its part, depends heavily (nearly 90%) on Chinese-manufactured API. Indian firms like Granules India and AurobindoPharma are heavily dependent on Chinese raw materials for manufacturing antibiotics and antiretrovirals.
  • Concerns have been raised about the depleting API inventories in India.
  • This foreign-dependence and declining supply of API is expected to affect India’s ability to supply cheap drugs to the world.

way forward

  • The CDSCO must be empowered to conduct surprise inspections of manufacturing plants. The plants can be graded accordingly to help consumers understand the differences in the quality of the drugs.
  • In 2018, the creation of intelligence cells at the state level was recommended for detecting cases of sub-standard drug manufacturing. A dedicated post of Assistant Drug Controller for implementing recalls was also proposed.
  • It is vital to manage a comprehensive database on cases of non-compliance. This will enable better prosecution of offenders and risk-based deployment of the scarce personnel.
  • Reduce the chances for counterfeit drug production by getting top brands to use an anti-counterfeiting solution. Eg: uniquely coded products that can be verified using mobile phones.
  • Need for a revised ethics code to punish the use of gifts to promote pharmaceuticals.
  • There is a need for reforming and revamping the MR qualification processes.
  • Fortification of the MR model with new technologies like apps and devices.
  • Basic educational qualification for working as medical sales representatives must be made mandatory.
  • Establishing quality pharma schools is essential for a well-trained human resource in the field.
  • Though the Indian pharmaceutical sector has been moving ahead mostly using its generics segment, this isn’t reliable in the long term given the increasing tendency of many countries to develop their own pharmaceutical sectors for the same. A sure-fire way of maintaining pharmaceutical market presence is focusing on novel drug development.
  • Apart from high calibre academic institutions, there is a need for promoting R&D work and even more essentially, capital funding for developing these drugs.
  • Use of emerging technologies to aid in drug synthesis. Eg: in 2018, scientists in the UK have developed a ‘Chemputer’ program to ‘democratize the pharma industry’.
  • One possible route in developing these new drugs, the R&D work can be prioritised towards developing solutions for country-specific diseases.
  • Developing clarity on India’s patent laws and their enforcement will secure the sector’s viability. It will also promote innovation.
  • The policies governing IP rights must also be well-framed and rational.
  • In line with India’s Self-Reliance Mission, there is a pressing need to develop self-reliance in API production. India has far more FDA-approved API production centres than anywhere else in the world. This reflects the unexplored potential presented by the API segment. SMEs could be incentivized to manufacture API domestically under various initiatives like Make in India and StartUp India.
  • The time is especially ripe for attracting more FDI into India given the prevalence of anti-China sentiments in the global market. Developing the API production capabilities is low-hanging fruit for developing the Indian pharma sector. The works towards this goal can start with identifying API ingredients that are most in demand for production in India.
  • Over the last few years, the government has been improving the health infrastructure and healthcare accessibility via various schemes like Ayushman Bharat and Janaushadhi Pariyojana. This presents a vast potential to the pharma sector for expansion and reaching deep into the domestic market. It simply has to ensure quality and affordability.


The pharmaceutical sector is a lucrative but high risk and capital-intensive sector. India has made use of its human capital and knowledge base to catch the generic drugs’ wave. However, for the sector to stay afloat, it must diversify into more valuable products like novel drugs instead of only copying off-patent drugs. Developing a new drug and getting it approved for a market introduction may take decades. The current disruptive situation has presented another opportunity for addressing the various issues dragging the sector down. The question is how effectively and how quickly it is made use of.

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

Price Monitoring and Resource Unit (PMRU)


From UPSC perspective, the following things are important :

Prelims level : Price Monitoring and Research Unit (PMRU)

Mains level : Drug prices monotoring mechanisms in India

The National Pharmaceutical Pricing Authority (NPPA) has set up price monitoring and resource unit (PMRU) in the UT of Jammu and Kashmir. With this J&K has become the 12th State/UT where the PMRU has been set up.

Price Monitoring and Research Unit (PMRU)

  • It is a registered society set up for drug price monitoring.
  • PMRUs have already been set up by the drug price regulator NPPA in 11 states such as Kerala, Odisha, Gujarat, Rajasthan, Punjab, Haryana, Nagaland, Tripura, Uttar Pradesh, Andhra Pradesh and Mizoram.

Its composition

  • The State Health Secretary would be the Chairman of the society and the Drugs Controller would be its member secretary.
  • Its members include a State government representative, representatives of private pharmaceutical companies, and those from consumer rights protection fora.
  • The society would also have an executive committee headed by the Drugs Controller.

Terms of reference

PMRU offers technical help to the State Drug Controllers and the NPPA to:

  • Monitor notified prices of medicines
  • Detect violation of the provisions of the DPCO
  • Look at price compliance
  • Collect test samples of medicines, and
  • Collect and compile market-based data of scheduled as well as non-scheduled formulations.

Why need PMRU?

  • Pharma companies have been accused of overcharging prices of drugs in the scheduled category fixed by the DPCO and those outside its ambit too.
  • The suggestion to set up PMRUs was made against the backdrop of the lack of a field-level link between the NPPA and the State Drugs Controllers and State Drug Inspectors to monitor drug prices.

Expected outcomes

  • The NPPA had fixed the prices of around 1,000 drugs and the unit would track if buyers were being overcharged.
  • It would also check if pharma companies were hiking the prices of non-scheduled drugs by more than 10% a year.
  • It will check if there is any shortage of essential medicines.

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

What is an ‘Essential Commodity’?


From UPSC perspective, the following things are important :

Prelims level : Essential commodities

Mains level : Regulation of essential commodities

Following reports of shortage and irrational pricing of hand sanitisers and masks, the union government has declared these items “essential commodities” until the end of June. It has notified an Order under the Essential Commodities Act to declare these items as Essential Commodities up to 30th June, 2020 by amending the Schedule of the Essential Commodities Act, 1955.

Why such move?

  • The coronavirus pandemic has triggered panic buying of masks and hand sanitisers at many places around the world, including in India.
  • The government’s order has come in the wake of reports of a shortage of these commodities and a sudden and sharp spike in their prices, and the alleged hoarding of stocks by manufacturers.

What does the government’s declaration mean?

  • The Essential Commodities Act provides, “in the interest of the general public, for the control of the production, supply and distribution of, and trade and commerce, in certain commodities”.
  • The law was passed in 1955 to essentially protect consumers from unreasonable and exploitative increases in prices of commodities in times of shortage.
  • It has been amended several times over the years, and made more stringent.
  • Under the Act, the government can also fix the maximum retail price (MRP) of any packaged product that it declares an “essential commodity”.

What kinds of items or products are generally classified as essential commodities?

  • The government has sweeping powers in this regard. The Act defines an “essential commodity” as simply “a commodity specified in the Schedule”.
  • The Act empowers the central government to add new commodities to the list of Essential Commodities as and when the need arises, and to remove them from the list once the crisis is over or the situation improves.
  • Over the years, a long list of items has been designated as essential commodities, including various drugs, fertilisers, cereals, pulses, sugar, edible oils, petroleum and petroleum products, and certain crops.
  • In the present situation, the government can intervene to regulate the supply and pricing of masks and hand sanitisers, and also notify their stock-holding limits.

How do states and UTs implement these orders?

  • They act on the notification issued by the Centre and implement the regulations.
  • Anybody trading or dealing in the essential commodity, including wholesalers, retailers, manufacturers, and importers, is barred from stocking it beyond the specified quantity.

What if the retailers/traders/manufacturers do not comply?

  • The purpose of designating any commodity as “essential” is to prevent profiteering at a time of extraordinary demand.
  • Violators are, therefore, termed as illegal hoarders or black-marketeers who can be prosecuted.
  • Besides penalties, the violation may lead to imprisonment for a maximum period of seven years.
  • Agencies of state governments and UT administrations are empowered to conduct raids to catch violators.
  • The government can confiscate excess stock hoarded by retailers/traders/manufacturers, and either auction it or sell it through fair-price shops.

Impact on Corona curbing

  • It is important to note that the designation of masks and hand sanitisers as “essential commodities” does not mean that the government considers them to be ‘essential’, in the literal sense, in the fight against COVID-19.
  • Doctors and health experts have underlined that the use of masks is helpful only if you have symptoms yourself, or if you are caring for someone who has symptoms.
  • The infection is spreading mostly through infected surfaces — and masks, especially the cheap surgical ones, can’t actually block the virus out.

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

[pib] Amendment to the Export Policy of APIs and formulations made from these APIs


From UPSC perspective, the following things are important :

Prelims level : Active Pharmaceutical Ingredients

Mains level : Regulations of API

The Government has made amendments in the export policy and restricted export of specified APIs (Active Pharmaceutical Ingredients) and formulations made from these APIs.

Active Pharmaceutical Ingredients (APIs)

  • All drugs are made up of two core components: the API, which is the central ingredient, and the excipients, the substances other than the drug that helps deliver the medication to your system.
  • The API is the part of any drug that produces its effects.
  • Excipients are chemically inactive substances, such as lactose or mineral oil.
  • The quality of APIs has a significant effect on the efficacy and safety of medications.

The notification covers the following APIs and formulations made from these APIs:

  • Paracetamol
  • Tinidazole
  • Metronidazole
  • Acyclovir
  • Vitamin B1
  • Vitamin B6
  • Vitamin B12
  • Progesterone
  • Chloramphenicol
  • Erythromycin Salts
  • Neomycin
  • Clindamycin Salts
  • Ornidazole

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

Medical Devices (Amendment) Rules, 2020


From UPSC perspective, the following things are important :

Prelims level : Medical Devices (Amendment) Rules, 2020

Mains level : Regulation of medical devices in India

The Ministry of Health and Family Welfare has notified changes in the Medical Devices Rules, 2017 to regulate medical devices on the same lines as drugs under the Drugs and Cosmetics Act, 1940.

Medical Devices (Amendment) Rules, 2020

  • These rules are applicable to devices intended for internal or external use in the diagnosis, treatment, mitigation or prevention of disease or disorder in human beings or animals” (as notified by the ministry).
  • It requires online registration of these devices “with the Central Licensing Authority through an identified online portal established by the Central Drugs Standard Control Organisation for this purpose.
  • Among the information that the manufacturer has to upload are “name & address of the company or firm or any other entity manufacturing the medical device along with name and address of manufacturing site.
  • It also need to upload certificate of compliance with respect to ISO 13485 standard accredited by National Accreditation Board for Certification Bodies or International Accreditation Forum.
  • This would mean that every medical device, either manufactured in India or imported, will have to have quality assurance before they can be sold anywhere in the country.
  • After furnishing of the above information a registration number will be generated. Manufacturer shall mention the registration number on the label of the medical device.

What are the items covered under the new Rules?

  • A large number of commonly used items including hypodermic syringes and needles, cardiac stents, perfusion sets, catheters, orthopaedic implants, bone cements, lenses, sutures, internal prosthetic replacements etc are covered under the new rules.
  • For some items such as sphygmomanometers (used to monitor blood pressure), glucometers (to check blood sugar), thermometers, CT scan and MRI equipment, dialysis and X-ray machines, implants etc, different deadlines for compliance have been set.
  • For example for the first three, it is January 2021, for the others it is April next year. For ultrasound equipment, it is November 2020.

Is this a sudden move?

  • This has been in the offing for some time now.
  • In October last year, the ministry had circulated copies of the then proposed notification for public comments following recommendations of the Drugs Technical Advisory Board (DTAB), which is the highest technical body for these decisions and has experts among its members.
  • In April last year, the DTAB had recommended that all medical devices should be notified as “drugs” under the drug regulation law to ensure they maintain safety and quality standards.
  • The notification makes it clear that the government has issued it in consultation with the DTAB.

Why was the move required?

  • For much of the last one year, the health sector has been at the centre of attention following revelations about faulty hip implants marketed by pharma major Johnson & Johnson.
  • This has caused major embarrassment to the government, too, as it exposed the lack of regulatory teeth when it came to medical devices.
  • The matter dragged on, exposing the regulatory loopholes until finally the company agreed in court to pay Rs 25 lakh each to the 67 people who had had to undergo revision surgeries because the implants were defective.
  • That is really where the discussion started about regulation of medical devices.

What are the penal provisions under Indian law?

  • There are various penal provisions under the Drugs and Cosmetics Act, 1940 for various kinds of offences. Manufacture or sale of substandard items is punishable with imprisonment of at least 10 years, which may extend to imprisonment for life.
  • There is also a provision for fine that will “not be less than Rs 10 lakh rupees or three times value of the confiscated items”.

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

WHO prequalifies Serum’s low-cost Pneumococcal Vaccine


From UPSC perspective, the following things are important :

Prelims level : Pneumococcal Vaccine

Mains level : Not Much

Pneumococcal vaccine developed by the Pune-based Serum Institute of India has been pre-qualified by the World Health Organisation (WHO).

Pneumococcal Vaccine

  • Pneumococcal vaccination is a method of preventing a specific type of lung infection (pneumonia) that is caused by the pneumococcus (Streptococcus pneumonia) bacterium.
  • There are more than 80 different types of pneumococcus bacteria – 23 of them covered by the vaccine.
  • The vaccine is injected into the body to stimulate the normal immune system to produce antibodies that are directed against pneumococcus bacteria.
  • This method of stimulating the normal immune system to be directed against a specific microbe is called immunization.
  • It does not protect against pneumonia caused by microbes other than pneumococcus bacteria, nor does it protect against pneumococcal bacterial strains not included in the vaccine.

About the Vaccine

  • The pneumococcal vaccine PNEUMOSIL is a conjugate vaccine to help produce stronger immune response to a weak antigen.
  • Serum Institute had optimized an efficient conjugate vaccine manufacturing processes for its meningitis A vaccine (MenAfriVac).
  • It was used for manufacturing the pneumococcal vaccine. This helped the company reduce the manufacturing cost of pneumococcal vaccine.


  • It pneumonia caused 1,27,000 deaths in India in 2018, the second highest number of child mortality under the age of five in the world.
  • In India, pneumonia and diarrhoea cause the most deaths in children under five years.
  • In 2017, pneumococcal conjugate vaccine was included in the under India’s Universal Immunisation Programme (UIP).
  • It has been introduced in a phased manner starting with Himachal Pradesh, parts of Bihar, Uttar Pradesh, Madhya Pradesh and Rajasthan.
  • The efficacy of the Serum vaccine was tested against an already approved pneumococcal vaccine (Synflorix).

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

Indian Pharmacopoeia (IP)


From UPSC perspective, the following things are important :

Prelims level : Indian Pharmacopoeia (IP)

Mains level : Not Much

The Indian Pharmacopoeia (IP) has been recognised officially by the National Department of Regulation of Medicines and Health Products of the Ministry of Public Health of Republic of Afghanistan.

Significance of the move

  • With this, a new beginning has been made and Afghanistan has become the first country to recognize IP pursuant to the efforts of Department of Commerce and Ministry of Health and Family Welfare.

Indian Pharmacopoeia (IP)

  • The quality, efficacy and safety of the medicines are important from healthcare perspective.
  • In order to ensure the quality of medicinal products, the legal and scientific standards are provided by Indian Pharmacopoeia Commission (IPC) in the form of Indian Pharmacopoeia (IP).
  • IP is an officially recognized book of standards as per the Drugs and Cosmetics Act, 1940 and Rules 1945 thereunder.
  • As per, the Second Schedule of the Drugs and Cosmetics Act, IP is designated as the official book of standards for drugs imported and/or manufactured for sale, stock or exhibition for sale or distribution in India.
  • Standards prescribed in the IP are authoritative in nature and are enforced by the regulatory authorities for quality control of medicines in India.

What is IP Commission?

  • The IP Commission’s mission is to promote public and animal health in India by bringing out authoritative and officially accepted standards for quality of drugs.
  • It includes active pharmaceutical ingredients, excipients and dosage forms, used by health professionals, patients and consumers.
  • This is achieved by developing the standards for medicines and supporting their implementation.
  • In addition, IPC also develops IP Reference Substances (IPRS) that act as fingerprint for identification of an article under test and its purity as prescribed in the IP monographs.

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

[op-ed snap] A band-aid


From UPSC perspective, the following things are important :

Prelims level : API

Mains level : Price regulation in India


India’s drug regulator, the National Pharmaceutical Pricing Authority (NPPA), used the public interest provision of the Drugs Prices Control Order 2013 to allow manufacturers to increase prices of 21 essential drugs by as much as 50%. 

Price Rise

  • Critical diseases – Most of these drugs are used to treat critical diseases such as tuberculosis, malaria, and leprosy and are crucial to the country’s public health program. 
  • Usually reduces – the regulatory authority is usually known to slash prices of life-saving drugs. This decision is compelled by an extraordinary situation. 
  • Costs of production – For nearly two years, drug manufacturers are claiming an inability to keep up with the country’s healthcare demands due to increasing costs of production. 
  • Immediate crisis – Easing the price ceiling could help the healthcare system. It may preempt a situation where the public is forced to switch to costlier alternatives. 

Root cause

  • The drug regulator and the Department of Pharmaceuticals need to do much more to address the root cause of the shortage of critical drugs.
  • Imports – India’s pharma industry imports more than 60% of active pharmaceutical ingredients (APIs) or bulk drugs from China. 
  • Chinese regulators – In 2017, Chinese regulators cracked down on bulk drug manufacturing units as per the country’s environmental regulations. The Chinese API industry has raised prices. This has spin-off effects in India. 
  • Example of price rise – the cost of making Vitamin C pills has gone up by more than 250% since 2017. This has led to a 25-30% shortage of this drug in India. 
  • Leprosy drug – Pharma major, Abbot, applied to the NPPA to discontinue the production of the leprosy drug, Hansepran. It pointed out that increasing costs of API imports had made the production of Hansepran unviable in India.

Price control

  • Essential control – Making medicines more accessible to those who need them is essential. 
  • Failure – Drug price control measures in India have not always achieved this objective. 
  • Past – The ceiling on prices of 74 bulk drugs in 1995 forced many companies to opt-out of API production. 

Draft Pharmaceutical Policy 2017 

  • Indigenous API – Giving preference to drugs produced from indigenously produced APIs in government procurement and taking them out of price control for five years.
  • R&D – More importantly, the draft talked about creating research and development facilities for API production. 
  • It needs to be revisited in light of the country’s current medicine shortage.


Active Pharmaceutical Ingredients(APIs)

These are the ingredients that give medicine its therapeutic value.

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



From UPSC perspective, the following things are important :

Prelims level : Nano-pharmaceuticals

Mains level : Nano-pharmaceuticals and their applications

  • The Ministry of Health and Family Welfare released guidelines for evaluation of nano-pharmaceuticals, which are emerging as more potent tools for treating various diseases.

What are Nano-pharmaceuticals?

  • Nanopharmaceuticals represent an emerging field where the sizes of the drug particle or a therapeutic delivery system work at the nanoscale.
  • They are derived by application of nanotechnology in medical therapeutics.
  • In the pharmaceutical industry, a long-standing issue is a difficulty of delivering the appropriate dose of a particular active agent to specific disease site.
  • Nanopharmaceuticals have enormous potential in addressing this failure of traditional therapeutics which offers site-specific targeting of active agents.
  • Such precision targeting via nanopharmaceuticals reduces toxic systemic side effects, resulting in better patient compliance.


  • They are expected to bring about a revolution in treatment strategies as they would enable targeting specific delivery of drugs and therapeutic molecules.
  • They offer higher efficacy and lower toxicity in many disease conditions.
  • They are expected to be of great use particularly in cancer treatment.

Why need guidelines?

  • Every year several new nano-pharmaceuticals are being developed and marketed across the world.
  • India too has a sizable pool of nano-scientists generating a large number of scientific publications in this domain.
  • However, regulatory approval is the most important factor for translating laboratory research into bedside medicine.
  • The new set of guidelines is designed to facilitate this process.

About the guidelines

  • The guidelines cover all the aspects of evaluation from the definition and categorization of nano-pharmaceuticals to pharmacovigilance of the new set of therapeutics.
  • It has been prepared as a joint project by the Department of Biotechnology (DBT) in the Union Ministry of Science and Technology, and ICMR and Central Drugs Standard Control Organisation under health Ministry.
  • It will give a big boost to innovators and drug manufacturers to optimise their research and come out with medicines that would be safer and more affordable.

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



From UPSC perspective, the following things are important :

Prelims level : Ranitidine

Mains level : Hazards of Ranitidine

  • India’s drug regulator this week began looking into concerns of potential cancer-causing substances contaminating popular acidity drug ranitidine.
  • The move came over a week after the US flagged the issue to American patients, some companies have suspended sales of the product worldwide, and some have ordered recalls of the product.


  • Ranitidine is an over-the-counter prescription antacid used in the treatment of acid reflux and peptic ulcer diseases.
  • It is popularly known through brand names like Aciloc, Zinetac, Rantac and Rantac-OD, R-Loc and Ranitin.
  • It is commonly used to relieve acid-related indigestion and heartburn by decreasing stomach acid production.
  • While other medicines like pantoprazole and omeprazole (omez) too treat these symptoms and are more commonly prescribed today, ranitidine is still widely used in India.

Why in news?

  • Ranitidine is a much older medication, but it was always thought to be a very safe drug because it has less side effects than the other drugs that patients use nowadays to treat these symptoms.
  • The US FDA stated in a release that it had learned that some ranitidine medicines contained “low levels” of a substance called N-nitrosodimethylamine (NDMA).
  • An environmental contaminant found in water and foods, NDMA has been classified as probably carcinogenic to humans, which means it has the potential to cause cancer.
  • This is the same impurity that the US FDA had investigated in blood pressure drugs valsartan and losartan over the last year.

How has India responded?

  • The Drugs Controller General of India (DCGI) wrote to state regulators asking them to direct ranitidine active pharmaceutical ingredient (API) manufacturers to verify their products and take appropriate measures to ensure patient safety.
  • DCGI asked states to inform him of action taken in this matter “at the earliest”.
  • So far, the DCGI has not called for any halting of supplies, which means the ranitidine brands marketed in the country can continue to be sold until further notice.
  • APIs are the ingredients that give a medicine its therapaeutic effect.
  • According to industry sources, most of the world’s supply of the ranitidine API comes from two Indian firms — Saraca Laboratories and SMS Lifesciences.

Should consumers be worried?

  • The DCGI has not clarified whether doctors and consumers in India should use ranitidine with caution, nor has the US FDA called for individuals to stop taking the drug at this time.
  • Although NDMA may cause harm in large amounts, the levels the FDA is finding in ranitidine from preliminary tests barely exceed amounts you might expect to find in common foods.

How have other countries responded?

  • While India and the US are still looking into the issue, regulators of around 15 countries are learnt to have called for recalls of ranitidine sold in their markets.
  • These include Singapore, Canada, Italy, Denmark, Finland, Norway, Switzerland and Pakistan.

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

Prohibition of E-cigarettes Ordinance 2019


From UPSC perspective, the following things are important :

Prelims level : ENDS

Mains level : Hazards of ENDS

  • The Prohibition of E-cigarettes Ordinance 2019 is being sent to a Group of Ministers as directed by the Prime Minister’s Office.

What are e-cigarettes?

  • An e-cigarette, short for electronic cigarette, is a battery-operated device.
  • One of a large variety of Electronic Nicotine Delivery Systems (ENDS), an e-cigarette emits vaporized nicotine, or non-nicotine solutions.
  • The user inhales it looking for a sensation similar to inhaling tobacco smoke, but without the smoke.
  • The pros and cons of e-cigarettes are hotly debated, with the industry refuting scientific evidence about the product being harmful, and users urging the government to legalize it.
  • India’s market for e-cigarettes, while nascent today, is projected to grow annually at more than 25 per cent in the next five years.

The draft ordinance

  • The draft ordinance was necessitated by the fact that an earlier order by the Centre asking the states to crack down against e-cigarettes could not stand judicial scrutiny.
  • However, a recent order, in which the High Court threw out a petition asking for protection from an ordinance against e-cigarettes, has emboldened the Health Ministry.
  • It now seeks legal backing for a ban (rather than just an advisory) in the form of an ordinance.
  • The ordinance makes any violation of its provisions punishable by imprisonment of one to three years, and a fine of Rs 1-5 lakh.
  • Some states have already banned use and sale of e-cigarettes, vape and e-hookah.

Why ordinance?

  • Under the Constitution, health is a state subject, so any move to ban manufacture and sale of a product on health grounds needs to come from the state government.
  • In February, the Central Drugs Standards Control Organisation had written to all state drug controllers, saying they should not allow sale, online sale, manufacture, distribution, trade, import or advertisement of ENDS.
  • The Delhi HC stayed the Centre’s circular banning sale and manufacture of ENDS like e-cigarettes and e-hookah with nicotine flavour, saying as the products were not a “drug”.

The scientific position on ban

  • The use of ENDS or e-cigarettes adversely affects almost all the human body systems with impact across the life course, from the womb to tomb.
  • The cartridges used in ENDS or e-cigarettes are filled with liquid nicotine, flavouring agents and other chemicals.
  • A typical cartridge contains about as much nicotine as a pack of 20 regular cigarettes and can act as a potential source for nicotine addiction.
  • Studies on these nicotine solvents had shown a varied degree of release of potential carcinogens depending on the battery output voltage.
  • The liquid-vaporizing solutions also contain toxic chemicals and metals that have been demonstrated to be responsible for several adverse health effects, including cancers and diseases of the heart, lungs and brain.

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

[pib] Janaushadhi Sugam


From UPSC perspective, the following things are important :

Prelims level : Janaushadhi Sugam and its features

Mains level : Ensuring quality and cheaper medicines

  • Union Ministry for Chemicals and Fertilizers launched a mobile application “Janaushadhi Sugam”.

Janaushadhi Sugam

  • It aims to enable people to search Janaushadhi generic medicines and the stores at the tip of their fingers.
  • The mobile application would have user-friendly options like- to locate nearby Janaushadhi Kendra, direction guidance for location of the Janaushadhi Kendra through Google Map, search Janaushadhi generic medicines etc.
  • It will help analyse product comparison of Generic vs Branded medicine in form of MRP & overall Savings.

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

Oxytocin and issues over its commercial use


From UPSC perspective, the following things are important :

Prelims level : Oxytocin

Mains level : Issues with use of Oxytocin

  • The final decision on whether the government can block private pharmaceutical companies from manufacturing and selling vital pregnancy drug oxytocin in India handed to the Supreme Court.


  • Oxytocin, also known as the ‘love hormone’, is a hormone secreted by the pituitary glands of mammals during sex, childbirth, lactation or social bonding.
  • It is secreted by pitutary glands in human body.
  • However, it can also be chemically manufactured and is sold by pharma companies for use during childbirth.
  • It is administered either as an injection or a nasal solution.

Why is it vital?

  • Oxytocin is a uterine stimulant hormone, prescribed for the initiation of uterine contractions and induction of labour in women, as well as stimulation of contractions during labour.
  • Oxytocin helps promote the release of breast milk.
  • It is also used to help abort the foetus in cases of incomplete abortion or miscarriage, and to control bleeding after childbirth.
  • It is also used widely in the dairy industry, agriculture and horticulture to boost production.

What is the case?

  • The health ministry in April 2018 notified a ban on private firms from manufacturing and selling oxytocin.
  • It wanted to restrict the responsibility of supplying the drug to a Karnataka-based public sector manufacturer to avoid its misuse in the veterinary field.
  • Following a case by drug makers like some private players the Delhi High Court in December 18 quashed the ban on various grounds, including that it lacked scientific basis.
  • The government has appealed the decision at the Supreme Court, arguing that the Karnataka PSUhas built up the capacity to manufacture and supply the required quantity of the drug here.

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

APIs of drugs to get track-and-trace codes


From UPSC perspective, the following things are important :

Prelims level : API

Mains level : Regulating pharma sector

  • The Health Ministry may soon make it mandatory for companies to include codes to track-and-trace key ingredients used to make medicines in India
  • If implemented, the move will potentially be the first step by the government to pinpoint the origin and movement of drugs manufactured here and ensures their authenticity.

QR code for drugs tracking

  • A draft amendment mandating quick response (QR) codes at “each” level of packaging of active pharmaceutical ingredients (APIs), used to give medicines their therapeutic effect is ready and will be notified soon.
  • An API is the basic drug/ingredient in a pharmaceutical drug or pesticide that is biologically active.
  • For a medicine to be effective, the API has to be effective.
  • As a first step to tracking and tracing medicines in the country every API manufactured or imported in India will bear a QR code on its label at each level of packaging.
  • India is currently dependent on China for imports of APIs to make certain essential medicines.

Why such move?

  • The Active Pharmaceutical Ingredient is most important constituent of any drug formulation.
  • The supply chain with respect to its security and integrity in proper storage condition plays very important role to enhance quality supply of APIs.
  • API manufacturers should be held accountable and responsible for the quality and purity of their products.
  • APIs by “various” vendors have been found to be not as per defined specifications with respect to their quality, specifications and purity and in certain cases the desired effects are not obtained.
  • Often APIs are not manufactured at the right premises or such APIs are not manufactured with the required scientific techniques to produce the bio-active substance.

Curbing fake drugs

  • Drug regulators in India on many occasions flagged medicines produced by even large drug makers for failing quality tests.
  • There is lack of clarity on the scale of India’s counterfeit and substandard drug problem.
  • The US, in its Special 301 Report this year, estimated that up to 20 per cent of drugs sold in the Indian market are counterfeit and could represent a serious threat to patient health and safety.
  • However, a nationwide survey conducted by the Indian government between 2014 and 2016 concluded that only around 3 per cent of the medicines here were substandard and only 0.023 per cent spurious or counterfeit.

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

Govt. notifies new rules for drugs, clinical trials


Mains Paper 2: Governance | Issues relating to development and management of Social Sector/Services relating to Health, Education, Human Resources.

From UPSC perspective, the following things are important:

Prelims level: Drugs and Clinical Trials Rules, 2019

Mains level:  Measures for ethical clinical trials of medicines in India


  • The Union Health Ministry has notified the Drugs and Clinical Trials Rules, 2019 aimed at promoting clinical research in the country.

Drugs and Clinical Trials Rules, 2019

  • The rules will apply to all new drugs, investigational new drugs for human use, clinical trials, bio-equivalence studies and ethics committees.
  • The rules has reduced time for approving applications, which has now come down to 30 days for drugs manufactured in India and 90 days for those developed outside the country.
  • Also, in case of no communication from Drugs Controller General of India, the application will be deemed to have been approved.
  • As per the new rule, the requirement of a local clinical trial may be waived for approval of a new drug if it is approved and marketed in any of the countries (EU, U.K., Australia, Japan and U.S.) specified by the Drugs Controller General with the approval of the government.
  • The new rules will ensure patient safety and an ethics committee will monitor the trials and decide on the amount of compensation in cases of adverse events.

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

[op-ed snap] The correct prescription


Mains Paper 2: Social Justice| Issues relating to development and management of Social Sector/Services relating to Health, Education, Human Resources.

From UPSC perspective, the following things are important:

Prelims level: E-pharmacies

Mains level: The news-card analyses the issues of cartelisation in pharma sector and how e-pharmacies will increase the competition leading to better prices.



Amid a slew of conflicting judicial decisions from different High Courts, the legality of e-pharmacies continues to be questioned by various trade associations such as the All India Organisation of Chemists and Druggists (AIOCD).


  • E-pharmacies, which operate through websites or smartphone apps on the Internet, offer medicines for sale at a discount of at least 20% when compared to traditional pharmacists.
  • The added convenience of home delivery of medicines to one’s doorstep is there.
  • For scheduled drugs, patients can submit photographs of prescriptions while placing orders.
  • The legal status of these e-pharmacies is not clear because the government is yet to notify into law draft rules that it published in 2018.

Opposition to e-pharmacies

  • The fiercest opponents of e-pharmacies are trade associations of existing pharmacists and chemists.
  • They argue that their livelihoods are threatened by venture capital-backed e-pharmacies and that jobs of thousands are on the line.
  • These trade associations also spin imaginary tales of how e-pharmacies will open the door to drug abuse and also the sale of sub-standard or counterfeit drugs, thereby threatening public health.

Need for e-pharmacies to curb cartelisation

  •  The entry of e-pharmacies will have effect on lowering the price of medicine for Indian patients.
  • Associations of pharmacists is one of rampant, unabashed cartelisation that has resulted in an artificial inflation of medicine prices.
  • In a fully functional, competitive market, pharmacists would compete with each other for business.
  • This competition could happen in the form of discounts or improving operational efficiency.
  • This practice of two competitors colluding to fix the sale price and area of operation is called cartelisation and is illegal under India’s Competition Act.
  • Over the last decade, the Competition Commission of India (CCI) has had to deal with several complaints alleging that trade associations of pharmacists are providing platforms for cartelisation.

Barriers in way of e-pharmacies

  • The practice of requiring pharmaceutical companies to apply for a no-objection-certificate (NOC) from the regional trade association before they appoint new stockists in a region to sell a particular drug prohibits competition.
  • By creating such artificial, extra-legal barriers to the free trade of medicines within India, these trade associations create huge distortions in the Indian market.
  • In its recent policy note on “Making markets work for affordable healthcare”, published in October 2018, the CCI noted, “One major factor that contributes to high drug prices in India is the unreasonably high trade margins.”
  • One of the culprits for this phenomenon identified by the CCI was “self-regulation by trade associations [which] also contributes towards high margins as these trade associations control the entire drug distribution system in a manner that mutes competition”.

Solutions Proposed by CCI

  • As stated by the CCI in its policy note, “Electronic trading of medicines via online platforms, with appropriate regulatory safeguards, can bring in transparency and spur price competition among platforms and among retailers, as has been witnessed in other product segments.”

Way Forward

Where the state has failed, it is possible that venture capitalist backed e-pharmacists will succeed in bringing back competition to the retail drug markets in India. There is no reason for India to continue indulging trade associations that have no taste for competition or fair business practices.

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

All Medical equipment notified as drugs


Mains Paper 2: Governance | Services relating to Health, Education, Human Resources.

From UPSC perspective, the following things are important:

Prelims level:  Not Much

Mains level:  Regulating medical and diagnostics devices & services


  • All implantable medical devices, CT scan, MRI equipment, defibrillators, dialysis machine, PET equipment, X-ray machine and bone marrow cell separator have been notified as drugs with effect from April 1, 2020.
  • The Central Drugs Standard Control Organization (CDSCO) is the national medical device regulator for its sale and use.

Why such move?

  1. A majority of medical devices are unregulated in India.
  2. These eight medical equipments have been notified as ‘drugs’  under Section 3 of the Drugs and Cosmetics Act, 1940.
  3. This move is important for patient’s safety as with this notification, all implantable and diagnostic devices will come under the regulatory framework.
  4. This will regulate medical and diagnostics devices in the country.
  5. It will create a new regulatory marketing approval system and the government can keep a tab on importers as well as manufacturers.



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

At first, Kerala sets up drug price monitor


Mains Paper 2: Governance | Issues relating to development & management of Social Sector/Services relating to Health, Education, Human Resources

From the UPSC perspective, the following things are important:

Prelims level: PMRU and its mandate

Mains level:  Need for an effective Pharma price monitoring agency


  • Kerala has become the first State to set up a price monitoring and research unit (PMRU) to track violation of prices of essential drugs and medical devices under the Drugs Price Control Order (DPCO).
  • The move comes more than five years after the National Pharmaceutical Pricing Authority (NPPA) proposed such a system for the States and the Union Territories.

Price Monitoring and Research Unit (PMRU)

  1. A society had been registered to get Central assistance for the functioning of the unit.
  2. The State Health Secretary would be the Chairman of the society and the Drugs Controller would be its member secretary.
  3. Its members include a State government representative, representatives of private pharmaceutical companies, and those from consumer rights protection fora.
  4. The society would also have an executive committee headed by the Drugs Controller.

Terms of reference

The new watchdog will offer technical help to the State Drug Controllers and the NPPA to:

  • Monitor notified prices of medicines
  • Detect violation of the provisions of the DPCO
  • Look at price compliance
  • Collect test samples of medicines, and
  • Collect and compile market-based data of scheduled as well as non-scheduled formulations.

Why such move?

  1. Pharma companies have been accused of overcharging prices of drugs in the scheduled category fixed by the DPCO and those outside its ambit too.
  2. The suggestion to set up PMRUs was made against the backdrop of the lack of a field-level link between the NPPA and the State Drugs Controllers and State Drug Inspectors to monitor drug prices.
  3. The unit is expected to help the State Drugs Control wing, which is hit by severe staff shortage, and regulate drug prices more effectively.
  4. There is also a plan to collect data on the prices of surgical devices and stents in the market.

Expected Outcomes

  1. The NPPA had fixed the prices of around 1,000 drugs and the unit would track if buyers were being overcharged.
  2. It would also check if pharma companies were hiking the prices of non-scheduled drugs by more than 10% a year.
  3. It will check if there is any shortage of essential medicines.
Notify of
Newest Most Voted
Inline Feedbacks
View all comments
PharmaFlair B2B Marketplace
PharmaFlair B2B Marketplace
1 year ago

Very Nicely Explained. Pharma Franchise is one of the best small investment Business opportunities. I am a Pharma Professional working as a PCD franchise & thankful to PharmaFlair that helped me to connect with Top PCD Pharma Company in India.

Casca remedies
Casca remedies
8 months ago

Read this article to know more about Pharma Franchise Business. PCD Pharma franchise is one of the best small investment Business opportunities.