- The Drugs and Cosmetics Acts, 1940, has been amended so many times that it has become too complex and lost its original character.
- The Drugs and Cosmetics Act, which regulates the import, manufacture, distribution, and sale of Drugs, Cosmetics, and medical devices will be replaced by a new law
- The new ordinances are expected to propel the growth of the Indian pharmaceutical sector
The Modi government is all set to frame new laws to regulate medicines, cosmetics, and medical devices in a bid to replace the existing Drugs and Cosmetics Act, formed in 1940. The drugs and cosmetics sectors are being regulated through the colonial law for the last eight decades, while medical devices was an unregulated sector until the government brought it under the Drugs and Cosmetics Act through an amendment.
The Drugs and Cosmetics Acts, 1940, has been amended so many times that it has become too complex and lost its original character. Since the industry has come a long way since the 1940s, needs to go to bring transparency in the sector and make the legal framework as per today’s industry needs.
“The government has decided to constitute a committee for framing/preparation of New Drugs, Cosmetics and Medical Devices Bill so that New Drugs, Cosmetics and Medical Devices Act can be framed,” said the internal order as per a report by News18.
The committee is lead by the Drug Controller General of India, VG Somani while the other members include Rajiv Wadhawan (Director, Ministry of Health and Family Welfare), Dr Eswara Reddy (joint drug controller), AK Pradhan (joint drug controller), IAS officer NL Meena followed by drug controllers of Haryana, Gujarat and Maharashtra.
The Drugs and Cosmetics Act, which regulates the import, manufacture, distribution, and sale of Drugs, Cosmetics, and medical devices will be replaced by a new law, which will probably prioritise Indian players, keeping the overall economic philosophy of Atma Nirbhar Bharat in mind.
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The new ordinances are expected to propel the growth of the Indian pharmaceutical sector, which is growing at a double-digit pace riding on post-Covid demand.
To built a resilient supply chain and end dependence on China for critical materials, in July last year, the government notified a 7,000 crore rupees production-linked incentive (PLI) scheme to promote domestic manufacturing of API or raw materials that are used to manufacture drugs. As per the Department of Pharmaceuticals, Ministry of Chemicals and Fertilizers, “India is significantly dependent on import of some of the basic raw materials, viz., bulk drugs that are used to produce the finished dosage formulations.”
Bulk drugs account for 63 per cent of total pharmaceutical imports of the country. India is largely self-dependent in end-product manufacturing but for raw materials, it depends on imports from China. Therefore, the PLI scheme, which worked very well in the electronics manufacturing sector, was implemented in the pharmaceutical sector in July.
The Pharmaceutical Industry of India witnessed unprecedented growth during the year when the world was suffering from Coronavirus. The effective and low-cost Indian medicines and vaccines saved the lives of a large number of people around the world. This is the reason behind the fact that when the global pharmaceutical industry declined by 1-2 per cent, the pharmaceutical exports of India grew by 18.7 per cent.
In FY 21, the total pharmaceutical export was 24.4 billion dollars compared to 20.58 billion dollars in the last year – when the growth was in the single-digit at 7.57 per cent. North America emerged as the biggest purchaser accounting for 34 per cent of the total exports, while exports to Canada surged by 30 per cent.
As of 2019, the industry has an annual revenue of around 1.3 lakh crore rupees or 33 billion US dollars but by 2025, it is expected to reach 100 billion dollars, thanks to double digits growth in the coming years. The largest players are Dilip Shanghvi led Sun Pharmaceutical, Lupin Limited of Desh Bandhu Gupta, Dr Reddy laboratories of Kallam Anji Reddy, Cipla, Aurobindo Pharma, Piramal Enterprise, Glenmark Pharmaceutical, Torrent, Biocon and Serum Institute.
Many Indian billionaires made their fortunes in the pharmaceutical sector, and it is arguably the largest sector in terms of the number of billionaires after the Information Technology-BPM sector. Once new simplified regulations are put in place, the growth would accelerate further and, India would capture a larger part of the global pharmaceutical value chain.
