REGULATORY FRAMEWORK OF

PHARMA SECTOR

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 PHARMACEUTICAL BUSINESS IN INDIA
 The Pharmaceutical Industry is one of the fastest growing industries in the world and it
is one of the biggest contributors to the world economy. The Indian Pharmaceutical
Industry may be divided into two broad segments, indicated as below:

Pharmaceutical Business

Active Pharmaceutical Ingredients/ Bulk Drug Formulation(s)

Branded Generic Chronic Acute

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 THE MARKET SHARE

 The Indian Pharmaceutical Industry is the third largest, in terms of volume and it is
number thirteen in terms of value in the world market.

 The Present market size of the Indian pharmaceutical sector is USD 20 billion and
expected to reach USD 55 billion by the year 2020 with a compound annual growth rate
(CAGR) of 15.92 per cent between 2015 and 2020.

 It is projected to grow more than the annual growth rate of the world pharmaceutical
sector, which is estimated about 5 per cent between same period.

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 USP FOR SETTING UP PHARMACEUTICAL
BUSINESS IN INDIA
 Promising Domestic Market
 Lifestyle related medicines like cardiovascular, anti diabetic, gastrointestinal and respiratory
drugs.
 Increasing demand for quality health care and the size of the population are some of the other
favourable domestic market conditions in India.

 Contract Research and Manufacturing Services (CRAMS)

 Large number of scientific and professional human resources, India is recognized as a global
manufacturing hub.
 Availability of developed R&D infrastructure made India as a favourable nation for
outsourcing.

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 USP FOR SETTING UP PHARMACEUTICAL
BUSINESS IN INDIA
 Government Initiatives to boost the Pharmaceutical sector
 Approval time for new facility reduced and NOC for export licenses will be issued within two
weeks.
 Customs duties and excise duty exempted for the HIV/AIDS drugs and diagnostic kits
supplied under the National AIDS Control Program funded by the Global Fund to fight AIDS,
TB and Malaria (GFATM).
 Government is planning to further relax FDI norms, which currently stands at 74 per cent in
Brownfield and 100 per cent in Greenfield projects.
 Pharma Vision 2020 aims to convert India into a major hub for end- to- end discovery.

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 REGULATORY FRAMEWORK
 The Regulatory supervision on the manufacturing and sale of Drugs has been introduced by
the British in India.

 The then Government formed a Drug inquiry committee under Sir Ram Nath Chopra also
known as ‘Chopra Committee’ whose recommendations were later tabled in legislative
assembly as ‘The Drug Bill’ and paved way for the Drugs and Cosmetic Act 1940 and
Drugs and Cosmetic Rules of 1945.

 These two are central legislations till date which regulates India's drug and cosmetic import,
manufacture, distribution and sale.

 Under the 1940 Act, exists a system of dual regulatory control or control at both Central and
State government levels. The central regulatory authority undertakes approval of new drugs,
clinical trials, standards setting, control over imported drugs and coordination of state bodies’
activities. State authorities assume responsibility for issuing licenses and monitoring
manufacture, distribution and sale of drugs and other related products.
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 Indian Drug Regulatory System:
Government of India

Ministry of Chemicals Ministry of Ministry of

Ministry of Health Ministry of Science Commerce &
& Family Welfare & Technology & Petrochemicals Environment &
Industry Forest

Patent GEAC-[Genetic
National Office Engineering
Pharmaceutical Approval
DGHS Indian Council Pricing Authority Committee]
of Medical (NPPA)
Research
(ICMR) Dept. of
Department of Commerce &
Chemical & Pharmexil Department of
Central Drugs Petrochemicals Biotechnology
BARC
Standard Control (DCP)
Organization (Radioactive)
(CDSCO) DGFT
r-DNA Advisory
Council of Committee
Department of
Scientific & Pharmaceuticals
Industrial
Research Controller Review
General of Committee
(CSIR) 7
Genetic
Patent
Manipulation
 Regulatory/Apex/Committee Functions
CDSCO Central Drugs Standard Control Laying down standards, Clearance of new drugs, CLAA
Organization (1948) items, Banning Drugs, Clinical Trails etc.
ICMR Indian Council of Medical Research Formulates, Coordinates and Promotes biomedical
(1911) research & Ethical Principles
GEAC Genetic Engineering Approval Manufacture, Use, Import of Hazards
Committee (1989) Microorganisms/Genetically Engineered Organisms or
Cells
DBT Department of Biotechnology (1986) It promote transgenic research, molecular biology of
human genetic disorders, brain research, and
commercialization of diagnostic kits and vaccines for
communicable diseases
AERB Atomic Energy Review Board (1983) Promotes Radio therapy & Research, Safety review for
Gamma Irradiators (Devices)
BARC Bhabha Atomic Research Centre Promotes Isotopes application in Medicine & also
(1967) monitoring usage of radioactive materials
DTAB Drug Technical Advisory Board (1950) To advise Central & State Govt. on Technical Matters
arising out of the Drugs & Cosmetics
RCGM Review Committee on Genetic No Objection Certificate for Clinical Trial & also r-DNA
Manipulation (1989) strains,
DCC Drug Consultative Committee (since Advisory Committee to DTAB and 8Central & State Govt.
1951) for uniform implementation of Various provisions of the
Act
 GOAL AND KEY FUNCTIONS OF
REGULATORY AUTHORITIES

 The main goal of drug regulations in India is to ensure safety, efficacy and quality of
drugs available to people in India. Accordingly, the key functions of the authorities
named above is:
 To register Product (drugs evaluation and authorisation; monitoring of drug efficacy and
safety);
 To regulate drug manufacturing, imports and its distribution and sale in India;
 To regulate drug promotion and dispensation of necessary information;
 To monitor adverse drug reaction & promote R&D;
 To grant license to person, premise and practice.

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 KEY AUTHORITIES
 Drug Controller General of India (DCGI)
 The DCGI is the central licensing authority that has the power to issue, renew, suspend or
cancel licences for import, export or manufacture of drugs, cosmetics or medical devices or
permission for conducting clinical trials.

 The DCGI also has the sole power to issue licenses for the manufacture, sale, and export of
17 categories of drugs.

 The DGCI is advised by the Drug Technical Advisory Board (DTAB) and the Drug
Consultative Committee (DCC).

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 KEY AUTHORITIES
 The National Pharmaceutical Pricing Authority (NPPA)
 NPPA which was instituted in 1997 under the Department of Chemicals and Petrochemicals,
which fixes or revises the prices of decontrolled bulk drugs and formulations at judicious
intervals.

 Drugs have been declared as essential and accordingly put under Essential Commodities Act,
1955.

 NPPA also periodically updates the list under price control through inclusion and exclusion of
drugs in accordance with established guidelines; maintains data on production, exports and
imports and market share of pharmaceutical firms; and enforces and monitors the availability
of medicines in addition to imparting inputs to Parliament in issues pertaining to drug pricing.

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 KEY AUTHORITIES
 Central Drugs Standard Control Organization (CDSCO)
 The CDSCO works in the Directorate General of Health services, which is a division in
Ministry of Health and Family welfare, Government of India, headed by Drug Controller
General of India (DCGI).

 CDSCO is responsible for licensing Blood Banks, LVPs, Vaccines and other Medical and
Diagnostic Agents and Centres. It is also responsible for banning any drug or cosmetic and
providing NOC for export of such drugs and cosmetics.

 CDSCO has six zonal offices, four sub-zonal offices, 11 port offices and six laboratories
under its control. It has four zonal, three sub-zonal and seven port/airport offices and six
laboratories to carry out its activities

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 KEY AUTHORITIES
 State Drug Controller
 It is headed by Drugs Controller who is responsible for licensing of drug manufacturing and
sales establishments and of drug testing laboratories. It also grants approval of drug
formulations for manufacture

 Monitoring of quality of Drugs & Cosmetics, manufactured by respective state units and
those marketed in the state. Investigation and prosecution in respect of contravention of legal
provisions.

 It is also responsible for Pre- and post- licensing inspection and recall of sub-standard drugs

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 KEY REGULATIONS
 The Drugs and Cosmetics Act of 1940 and Rules 1945
 Pharmacy Act, 1948
 The Drugs and Magic Remedies Act, 1954
 Drug Prices Control Order, 1995

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GOOD MANUFACTURING PRACTICES (GMP)
 GMP constitute an international set of guidelines for the manufacture of drugs and
medical devices in order to ensure the production of quality products.

 The objective of GMPs is to minimize risks with reference to the manufacturing,

packaging, testing, labelling, distributing and importing of drugs, cosmetics, medical
devices, blood and blood products, food items etc. These protocols are largely
concerned with parameters such as drug quality, safety, efficacy and potency.

 WHO GMP Protocols:

 These guidelines were instituted in 1975 in order to assist regulatory authorities in different
countries to ensure consistency in quality, safety and efficacy standards while importing and
exporting drugs and related products. India is one of the signatories to the certification
scheme. The WHO-GMP certification, which possesses two-year validity, may be granted
both by CDSCO and state regulatory authorities after a thorough inspection of the
manufacturing premises.
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GOOD MANUFACTURING PRACTICES (GMP)
 Schedule M Compliance:
 The requirements specified under the upgraded Schedule ‘M’ for GMP have
become mandatory for pharmaceutical units in India w.e.f. July 1, 2005. Schedule
M classifies the various statutory requirements mandatory for drugs, medical
devices and other categories of products as per the current Good Manufacturing
Practices (cGMP).

 These revised protocols include detailed specifications on infrastructure and

premises, environmental safety and health measures, production and operation
controls, quality control and assurance and stability and validation studies

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GOOD MANUFACTURING PRACTICES
(GMP)
 International regulatory certification for Indian manufacturing units
 A principal issue relating to good manufacturing practices is that WHO-GMP is no longer
sufficient, particularly for exporting of drugs and related products to developed countries.
Regulators from these countries visit Indian firms to carry out a thorough inspection of their
manufacturing units before registering the concerned product.

 India has the distinction of having the largest number of US-FDAapproved manufacturing
units, totaling 100, mainly for production of Active Pharmaceutical Ingredient (API), outside
of the United States.

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 CASE STUDY – DRUG PRICING
(All India Drug Action Network v. Union of India & Ors.)

 1978-79: Drug Policy of 1978 and Drug Price Control Order (DPCO) of 1979 notified.
For the first time comprehensive price control imposed on drugs. 347 bulk drugs
brought under price control covering an estimated 80-90% of drugs in the market. Mark
up (including profits) over production costs capped at 40%, 50% and 75% on different
categories of price controlled drugs.

 1980-85: Manufacturers shift production away from price controlled drugs creating
shortages and putting pressure on government to attend the DPCO.

 1986-87: New Drug Policy of 1986 and DPCO of 1987 notified. Drugs under price
controlled category slashed to 142, reducing span of coverage to 60% of drugs in the
market. Mark ups increased to 75% and 100%

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 CASE STUDY – DRUG PRICING

 1994-95: Drug Policy 1994 and DPCO 1995 notified. Drugs under price control slashed
to 74 and a uniform mark-up of 100% allowed. Only 25-30% of drugs now under price
control.

 2002: Drug Policy of 2002 proposes reducing drugs under price control to just 39
covering 10-20% of drugs in the market.

 2002: Karnataka High Court, responding to a Public Interest Litigation, stays

implementation of Drug Policy 2002

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 CASE STUDY – DRUG PRICING
 2003: Drug Price case taken over by Supreme Court. Supreme Court sought Central
Government to take steps to ensure affordable access to all essential drugs

 2012: Government announces DPCO 2012. All essential drugs (348) brought under price
control but system of identification of drugs to be placed under price control and of price
fixation changed radically. Price fixation is now based on average of existing costs in the
market and not on production cost. As a result price reduction is meager (overall less than
3% impact on overall drug market) and price control extends to less than 17% of the market.

 2014: Government notified DPCO 2013 covering around 680 formulations. The same was
challenged vide a PIL contending that under the said policy the margin of profit for drug
manufacturers and dealers had become 10-1300 per cent. Also, the National List of Essential
Drugs consists of only 348 drugs and left out many essential medicines from price control.

 2015: The Supreme Court directed Centre to re-examine its drug pricing policy for essential
medicines, calling it "unreasonable and irrational”.
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 CASE STUDY – Unethical Clinical Trials in India
(Swasthya Adhikari Manch Indore & Anr. v. Union of India & Ors.)

 2005: Amendment of ‘Schedule Y’ of the Drugs and Cosmetics Rules, in January 2005,
allowed "concurrent phase" trials in the country. This made it easier for drug companies to do
research that involved Indian participants.

 2003-2011: From 40 to 50 trials in 2003, the country saw around 1850 trials registered with
the government registry in June 2011.

 2004-2008: Around ten firms, including Pfizer, GlaxoSmithKline and Astra Zeneca,
conducted unethical clinical trials in the hospital in Bhopal reserved for victims of industrial
genocide. The trials were called off in 2008 on the orders of the hospital’s management.

 2007-2009: Registration of clinical trials introduced as a voluntary measure in 2007 and

made mandatory (with full disclosure of trial data with the Clinical Trials Registry) from
June 15, 2009.

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 CASE STUDY – Unethical Clinical Trials in India

 2010: A US based NGO called Program for Appropriate Technology in Health (PATH)
was given approval for a trial that they called a ‘demonstration project’ on the HPV
vaccine. Gross ethical violations in the manner in which trial participants were
recruited.

 2008-2010: Government and private doctors in Indore, Madhya Pradesh, reportedly

carried out clinical trials of various medicines on some 233 patients who had gone to
them seeking psychiatric treatment. The trials, which included gross ethical violations.

 2013: The Parliamentary Standing Committee on Health found several instances of

ethical and procedural violations in the manner in which the HPV trials were
conducted.

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 CASE STUDY – Unethical Clinical Trials in India

 2013: The Supreme Court, taking cognizance of the issue after a pubic interest
litigation was filed by the Indore based Swasthya Adhikar Manch (health rights
platform) imposed a stay on clinical trials in country.

 2013: The Supreme Court stopped the country’s drug regulatory agency from
approving any new drug trials on humans. The court banned clinical trials for new
drugs unless they were personally verified and cleared by the health secretary.

 2014: Government admited before the Supreme Court that an estimated 3,458 research
participants died during clinical trials conducted in the period, January 1, 2005, to
December 31, 2012. Out of these, 89 deaths were found to be attributable to the clinical
trials. In this period, trials on 475 new drugs were conducted and only 17 drugs were
approved for marketing in India.

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 CASE STUDY – Unethical Clinical Trials in India

 2014: In response, the government introduced new measures which required that
compensation had to be paid to affected patients irrespective of whether the damage was
caused as a result of the trial or not. The government also made it mandatory that all
companies engaging in clinical trials must maintain audio-visual recording of ‘informed
consent’ of the patients participating in the trial.

 According to the new regulations, all clinical trial applications (CTA) have to be submitted
online and shall be reviewed by a Subject Expert Committee (SEC), Technical Committee
and an Apex Committee. The major criteria for review are assessment of risk versus benefit
to the patients, innovation vis-a-vis existing therapeutic choice and fulfilling the unmet
medical needs of the country.

 Independently functioning Ethical Committees (EC) at hospitals and investigator sites were
accredited by the Central Drugs Standard Control Organization/Drugs Controller General of
India (CDSCO/DCGI).
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THANK YOU

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