CHAPTER II

AN OVERVIEW OF INDIAN PHARMACEUTICAL INDUSTRY

2.1 INTRODUCTION

The Indian Pharmaceutical Industry currently tops the chart amongst India's sciencebased industries with wide ranging capabilities in the complex field of drug manufacture and
technology. The Indian Pharmaceutical Industry ranks very high amongst all third world
countries, in terms of technology, quality and the vast range of medicines that are manufactured.

The Pharmaceutical industry has grown from mere US$ 0.3 billion turnover in 1980 to
about US$ 21.73 billion in 2009-10. The country now ranks 3 rd in terms of volume of
production and14 th largest by value. One reason for lower value share is the lowest cost of
drugs in India ranging from 5 per cent to 50 per cent less as compared to developed countries.
Indian pharmaceutical industry growth has been fuelled by exports and its products are exported
to a large number of countries with a sizeable share in the advanced regulated markets of the US
and Western Europe .

Many Indian companies maintain highest standards in Purity, Stability and International
Safety, Health and Environmental protection in production and supply of bulk drugs even to
some innovator companies. This speaks of the high quality standards maintained by a large
number of Indian Pharma companies as these bulk actives are used by the buyer companies in
manufacture of dosage forms which are again subjected to stringent assessment by various
regulatory authorities in the importing countries. More of Indian companies are now seeking
regulatory approvals in USA in specialized segments like Anti-infectives, Cardiovasculars, CNS

group. Along with Brazil & PR China, India has carved a niche for itself by being a top generic
Pharma player.
Increasing number of Indian pharmaceutical companies have been getting international
regulatory approvals for their plants from agencies like USFDA (USA), MHRA (UK), TGA
(Australia), MCC (South Africa), Health Canada etc. India has the largest number of USFDAapproved plants for generic manufacture. Considering that the pharmaceutical industry involves
sophisticated technology and stringent "Good Manufacturing Practice requirements, major share
of Indian Pharma exports going to highly developed western countries bears testimony to not
only the excellent quality of Indian pharmaceuticals but also its price competitiveness. More than
50 per cent share of exports is by way of dosage forms. Indian companies are now seeking more
Abbreviated New Drug Approvals in USA in specialized segments like anti-infective, cardio
vascular and central nervous system groups.

India's pharmaceutical market grew at 15.7 per cent during December 2012. Globally,
Indiaranks third in terms of manufacturing pharma products by volume. According to McKinsey,
the Pharmaceutical Market is ranked 14th in the world. By 2015 it is expected to reach top 10 in
the world beating Brazil, Mexico, South Korea and Turkey. More importantly, the incremental
market growth of US$ 14billion over the next decade is likely to be the third largest among all
markets. The US and China are expected to add US$ 200bn and US$ 23bn respectively.

2.2 HISTORY OF INDIAN PHARMACEUTICAL INDUSTRY

Looking back into history reveals that it was in 1930 when the first pharmaceutical
company in India came into existence in Kolkatta. It is called the "Bengal Chemicals and
Pharmaceutical Works". This Indian company is still there and today it is the part of five drug
manufacturing companies that are owned by the government. Till the period of 60 years the
pharmaceutical industry in India was overshadowed by the foreign drug manufacturing
companies but with the Patent Act in 1970, the whole scenario of pharmaceutical companies in
India had changed since then. With this the Indian market was more open to Indian
pharmaceutical companies than the MNCs. So with this pharmaceutical companies in India
started to grow in number At present there is a cut throat competition among top pharmaceutical
companies in India with the native as well as MNCs. But there are certain issues that are
concerning the growth of pharma companies in India.
These are:Pharmaceutical drugs

Mandatory licensing and failure of new paten system.

Regular power cuts and inadequate infrastructure.

Restricted funding.

Regulatory hindrances that lead to the delays in the launch of new drug or pharma
product.

Too many small as well as big pharmaceutical companies and excessive competition.

2.3 INDUSTRY TRENDS

All companies, including MNCs, have increased their field force in the last one year.

Indian companies are entering into strategic tie-ups with MNCs to strengthen their product
portfolio.

Companies are expanding their presence in rural markets.

Acquisitions by MNCs to gain quick foothold in the fastest growing Indian pharma market.

Most of the Pharma companies have shown considerable decline in growth in the first
half of 2011. The slowdown is widely visible in the Chronic and Acute categories. Antiinvective, pain and gastro together contribute 1/3rd of the total pharma market. The pharma
companies have started facing challenges in domestic market due to increase in competition from
unlisted MNCs in this segment. They are rapidly expanding their field force to extend their
geographical reach. Companies like Cipla, Torrent and IPCA which are mainly focused on
Indian market are already feeling the heat. Growth rates of companies such as Cadila, Dr. Reddy
and Ranbaxy have already come down. On the other hand Lupin and Sun are showing growth
due to the shift of focus towards specialty therapies, where competition is relatively low.

Basing on the changing macro factors and economic growth Emkay Research has
expected the growth estimates of the pharma companies to decrease. It cut down the domestic
growth estimates for Cadila, Cipla, Dr. Reddy, IPCA, Torrent and Unichem for FY12 and FY 13
by 2% to 5% and retained the growth estimates for Lupin, Ranbaxy, Sun, GSK and Pfitzer.

A highly fragmented industry, the Indian pharmaceutical industry is estimated to have

over 10,000 manufacturing units, as given by the Organisation of Pharmaceutical Producers of
India. The organized sector accounts for just 5% of the industry with around 300 players, while a
huge 95% is in the unorganized sector. A large number of players in the unorganized segment
are small and medium enterprises and this segment contributes 35% of the industrys turnover.

In calendar year (CY) 2005, turnover of the organized sector companies aggregated to Rs
302 bn, of which 19% came from MNCs while the remaining 81% was contributed by Indian
companies. Turnover of players in the unorganized segment, though difficult to assess, is
estimated to be around Rs 160 bn.

The Indian pharmaceutical industry consists of manufacturers of bulk drugs and

formulations. Bulk drugs include the active pharmaceutical ingredients (APIs) which are used for
the manufacture of formulations. According to estimates, the proportion of formulations and bulk
drugs is in the order of 75:25. There are believed to be over 60,000 formulations manufactured in
India in more than 60 therapeutic segments. More than 85% of the formulations produced in the
country are sold in the domestic market. India is largely self-sufficient in case of formulations,
though some life saving, new-generation-technology-barrier formulations continue to be
imported.

Among the therapeutic segments, the anti-infectives top domestic production in volumes.
In 2005, the chronic therapy segment accounted for around 26% of the domestic formulation
business, growing at a rate of 10%; faster than the acute therapy segment. The chronic therapy
segment includes anti-diabetics, cardiac and neuro-psychiatry formulations.
Bulk drug manufacturing is largely concentrated in Andhra Pradesh, which accounts for
more than one-third of the countrys total bulk drug production, followed by Gujarat. The Indian
bulk drug industry has lately been gaining signifi cant presence in the global market as foreign
and multinational companies are looking to sourcing APIs and intermediates from Indian
manufacturers. Factors favouring the industry are a vast resource of technical people, stateofthe-art manufacturing facilities, low cost and the advantage of the English language. As part of
governments support to increase exports, duty free zones have been set up and several
manufacturers of bulk drugs have been shifting their facilities to these areas. As a result, the
diverse spread has now started getting consolidated and concentrated in certain regions across
the country.

India has a significant share in the global generics market and is ranked third. In recent
years, this segment has been facing stiff competition which makes the scale of production
important to improve profitability. India has pre-dominantly been a generic player and has the
potential to gain a global presence for the following key developments:

Multiple branded drug patent expirations in the short term. According to IMS Health, in
2006 and 2007 a total of US$ 28 bn and US$ 20 bn, respectively, of branded sales were
likely to become susceptible to the entry of generic equivalents

Increasing confidence of consumers in generics in the developed markets

A pro-generic sentiment from healthcare authorities driven by the pressure of containing

rising healthcare costs

An aging population across the world, leading to increasing demand for low cost
therapies

Global healthcare crisis like AIDS in the developing world, necessitating affordable
medication for the masses

Generic companies in India are recognizing the importance of patent expiries and are
making significant incremental investments in research and drug development.

Key Strengths of Pharma Sector

Low cost of innovation/Manufacturing/Capex costs/expenditure to run a cGMP
compliance facility.
Low cost scientific pool on shop floor leading to high quality documentation.
Proven track record in design of high tech manufacturing facilities.
Excellent regulatory compliance capabilities for operating these assets.
Recent success track record in circumventing API/formulation patents.
About 95 per cent of the domestic requirement being met through domestic production.
India is regarded as a high-quality and skilled producer in the world.

2.4 GOVERNMENT INITIATIVES:

Government initiatives in the public health sector have recorded some noteworthy
successes over time with focus on investments related to better medical infrastructure, rural
health facilities etc.

100 per cent FDI is permitted for health and medical services under the automatic route.

The National Rural Health Mission (NHRM) had allocated US$ 10.15 billion for the
upgradation and capacity enhancement of healthcare facilities.

Moreover, in order to meet revised cost of construction, in March 2010 the Government
allocated an additional US$ 1.23 billion for six upcoming AIIMS-like institutes and
upgradation of 13 existing Government Medical Colleges.

As a result, FDI inflow in hospital and diagnostic centres was US$ 1.1 billion during
April 2000 and November 2011, according to st Department of Industrial Policy & Promotion
(DIPP) data. FDI inflow in medical and surgical appliances stood at US$ 472.6 million during
the same period. And the drugs and pharmaceuticals sector has attracted FDI worth US$ 5.0
billion between April 2000 and November 2011

2.5 BUDGET 2012:

Union Budget 2012-13, as expected, is positive for the pharmaceutical sector. The government
has again increased budgetary allocation for healthcare spending, which would be an overall
positive for the sector. Indian pharmaceutical companies have been investing on the R&D front
to tap opportunities in the domestic and global markets. To encourage the same, the weighted
deduction on R&D expenditure to 200% (in-house research) was extended for a further period of
five years. R&D sops would continue to be positive for the sector as a whole.

Budget Proposal

Impact

Proposal to extend weighted deduction of 200%

for R&D expenditure in an in-house facility for Positive for
a further period of five years beyond March 31, companies.

all

Indian

pharmaceutical

2012.

Allocation for NRHM proposed to be increased

from Rs 18,115cr in FY2011-12 to Rs 20,822cr Positive for all pharmaceutical companies.
in FY2012-13.

Proposal to continue to allow repatriation of Positive for all pharmaceutical companies,

dividends from foreign subsidiaries of Indian mainly Indian companies, as they generate the
companies at a lower tax rate of 15% up to highest revenue from export markets.
March 2013.

Would negatively impact Cadila Healthcare

and Sun Pharmaceuticals. Since we have
Introduced MAT on partnership firm.

already factored in higher

tax provision for FY2013, we are not
changing our FY2013 estimates for both the
companies.

4.5 DOMESTIC PHARMA INDUSTRY

The domestic Pharma Industry has recently achieved some historic milestones through a
leadership position and global presence as a world class cost effective generic drugs'
manufacturer of AIDS medicines. Many Indian companies are part of an agreement where major
AIDS drugs based on Lamivudine, Stavudine, Zidovudine, Nevirapine will be supplied to
Mozambique, Rwanda, South Africa and Tanzania which have about 33 per cent of all people
living with AIDS in Africa. Yet another US Scheme envisages sourcing Anti Retrovirals from
some Indian companies whose products are already US FDA approved.
Many Indian companies maintain highest standards in Purity, Stability and International
Safety, Health and Environmental protection in production and supply of bulk drugs even to
some innovator companies. This speaks of the high quality standards maintained by a large
number of Indian Pharma companies as these bulk actives are used by the buyer companies in
manufacture of dosage forms which are again subjected to stringent assessment by various
regulatory authorities in the importing countries. More of Indian companies are now seeking
regulatory approvals in USA in specialized segments like Anti-infectives, Cardiovasculars, CNS
group. Along with Brazil & PR China, India has carved a niche for itself by being a top generic
Pharma player.
Increasing number of Indian pharmaceutical companies have been getting international
regulatory approvals for their plants from agencies like USFDA (USA), MHRA (UK), TGA
(Australia), MCC (South Africa), Health Canada etc. India has the largest number of USFDA approved plants for generic manufacture. Considering that the pharmaceutical industry involves
sophisticated technology and stringent "Good Manufacturing Practice (GMP) requirements,
major share of Indian Pharma exports going to highly developed western countries bears
testimony to not only the excellent quality of Indian pharmaceuticals but also its price
competitiveness. More than 50 per cent share of exports is by way of dosage forms. Indian
companies are now seeking more Abbreviated New Drug Approvals (ANDAs) in USA in
specialized segments like anti-infective, cardio vascular and central nervous system groups.

More than 85% of the formulations produced in the country are sold in the domestic
market. India is largely self-sufficient in case of formulations. Some life saving, new generation
under-patent formulations continue to be imported, especially by MNCs, which then market
them in India. Overall, the size of the domestic formulations market is around Rs160bn and it is
growing at 10% p.a.
4.6 IMPORTS:
Registration of imported drugs
All drugs to be imported require their own import registration. This is independent of new
the required drug registration. Foreign manufacturers must apply for registration certification for
their manufacturing premises and for the individual drugs to be imported. Applications can be
made by authorized agents of foreign firms in India.
Import licensing:
India does not permit the free import of all goods. While India is a signatory to the world
trade organization (WTO), it has been given time to remove its quantitative restrictions on
imports (QRs) in a phased manner, with QRs to be totally lifted by 2002 or earlier. At present
most non-consumer goods items are permitted to be imported freely, while some consumer
goods are permitted to be imported freely, and others are prohibited for import. Most items are
classified under the international harmonized system (HIS of BTN) and categorized for import
accordingly. Imports and exports are regulated by the foreign trade (Development and
Regulation) act, 1992.
Pharmaceutical imports:
Most pharmaceuticals are still freely importable under the foreign trade law. Certain drugs
may not, however, be imported except under a license given by the drug controller of india. Such
products cannot be imported after the date shown on the lable as being that on which the potency
would reduce or toxicity would increase beyond the standard permitted.

4.7 EXPORTS OF INDIAN PHARMACEUTICALS

Over 60% of Indias bulk drug production is exported. The balance is sold locally to
other formulators. Indias pharmaceutical exports are to the tune of Rs87bn, of which
formulations contribute nearly 55% and the rest 45% comes from bulk drugs. In financial year
200, exports grew by 21%. Indias pharmaceuticals imports were to the tune of Rs20.3bn in
FY2001. Imports have registered a CAGR of only 2% in the past 5 years. Import of bulk drugs
have slowed down in the recent years.
The exports of Pharmaceuticals during the year 1998-97 were Rs 49780 million. From a
meager Rs 46 crores worth of Pharmaceuticals, Drugs and Fine Chemicals exports in 1980-81,
pharmaceutical exports has risen to approximately Rs 6152 Crores (Prov.1998-99), a rise of
11.91% against the last year exports. Amongst the total exports of India, the percentage share of
Drugs, Pharmaceuticals and Fine Chemicals during April-October (2000-2001) was 4.1%, an
increase of 7%.
Top 10 destinations of Indian Pharma products for the period April-December 2012
S. No.

Importing country

Amount (US$ million)

USA

1791.0

UK

263.9

Germany

243.6

South Africa

226.8

Russia

221.4

Brazil

165.0

Nigeria

154.1

Kenya

137.3

Netherlands

131.7

10

Turkey

119.0

4.8 CHALLENGES OF PHARMACEUTICAL INDUSTRY

The following challenges faced by the global pharmaceutical industry also open up a
number of opportunities for the Indian pharmaceutical industry:
Higher healthcare costs
Competition from generics
Pastent expiries of blockbuster drugs
Increasing R & D costs
Poor all-round infrastructure is a major challance
Stringent price controls
Lack of data protection
Tomorrows challenge is to develop new medicines that can prevent or cure currently
incurable diseases. Todays challenge is to get to tomorrow and thats a tall order in itself.
Rising customer expectations:
The commercial environment is getting harsher, as healthcare payers impose new cost
constraints on healthcare providers and scrutinise the value medicines offer much more carefully.
They want new therapies that are clinically and economically better than the existing
alternatives, together with hard, real-world outcomes data to back any claims about a medicines
superiority.
Poor scientific productivity:
Pharmas output has remained at a stable level for the past decade. Using the same
discovering and developing processes, theres little reason to think its productivity will suddenly
soar.
Cultural sclerosis:
The prevailing management culture, mental models and strategies on which the industry
relies are the same ones its traditionally relied on, even though theyve been eclipsed by new
ways of doing business

4.9 RESEARCH AND DEVELOPMENT

In no other Industry segment innovative R&D is as critical as in Pharma industry. Here,
the New Drug Discovery Research (NDDR) has to keep pace with the emerging pattern of
diseases as well as responses in managing existing diseases where target organisms are becoming
resistant to existing drugs. The NDDR is also an expensive activity. It is encouraging to observe
that at least 10 Indian companies are into new drug discovery in the areas of infections,
metabolic disorders like diabetes, inflammation, respiratory, obesity & cancer. Most of these
companies have increased their R&D spending to over 5 per cent of their respective sales
turnovers. There is notable success from some Indian companies in out licensing new molecules
in the asthma and diabetes segments to foreign companies. Introduction of Product Patent for
Pharmaceuticals is an important feature for Indian Pharma R&D scenario. This has boosted the
confidence of MNC Pharma companies in India where a number of western Pharma companies
have already R&D collaborations with Indian Pharma companies in the field of NDDR. Some
Indian companies have also got US-FDA approvals for their new molecules as Innovative New
Drugs (lND).
Western Pharma companies have recognized the attractiveness of India as a R&D
outsourcing destination due to low cost scientific manpower, excellent infrastructure, top quality
with capability to conduct modern research under GLP, GCP guidelines. Many of them have set
up independent R&D centres in India.
Clinical Trials to establish safety and efficacy of drugs constitute nearly 70 per cent of
R&D costs. Considering the low cost of Research and Development in India, several MNC
Pharma companies as well as global Clinical Research Organizations are increasingly making
India a clinical research hub. In conclusion new drug discovery in India has made a promising
start wherein at least five to six potential candidates in the areas of Malaria, Obesity, Cancer,
Diabetes and Infections are likely to reach Phase II clinical trials.

4.10 PRODUCTION AND TRADE

The domestic bulk drug and formulation industry has been able to largely meet the
domestic demand for these products. Besides, it also exports to several regions, including the EU
and US. Exports currently constitute nearly 48% of the industrys turnover, and have been
growing at an average 22% annually since 1994. In FY06, exports grew by an impressive 21%
touching Rs 215.8 bn.

The growing demand from the domestic market and increased manufacturing activities
has led to rising imports during the past few years. In FY06, imports were worth Rs 45.2 bn as
against Rs 31.7 bn in FY05. The nature of imports has undergone a significant change over the
years, from finished doses imported prior to the 1970s, to largely bulk drugs today.

Domestic demand has been showing significant growth; the rise in consumption being
primarily attributed to the rising population, rise in income levels and increasing health
awareness among people. New product launches by the Indian and multinational companies have
also catalyzed market demand. Moreover, the favourable regulatory environment, increased
expenditure on R&D and improved technical skills in the fi eld of chemical synthesis has also
played an important role.

The increasing alliances and tie-ups of Indian companies with global players has further
given a boost to Indian exports.

4.11 Pharmaceutical Export Promotion council

Pharmaceutical Export Promotion Council (Pharmexcil) having its Headquarters at

Hyderabad and Regional offices at Mumbai and Delhi, was set up by the Ministry of
Commerce and Industry, Government of India vide Notification No 64 dated the 12th May,
2004. Under Para 3.12.1 of Export and Import Policy 2002-2007, Pharmexcil is the only
Designated Agency for issue of Registration and Membership Certificates for
Pharmaceutical Exports dealing in products/services like: Bulk Drugs, Drug Intermediates, Drug Formulations, Biotechnology, Biological
Products, Herbal Products (Ayurveda, Siddha & Unani ), Medicinal Plants, Homeopathy,
Nutraceuticals and Physiochemical, Diagnostics, Contact Research; contract Manufacturing
, Clinical Research, Surgical, Collaborative Research and Technologies/ Consultancy.
Objectives
The objectives of the Council (Pharmexcil) are to extend all assistance to the
pharmaceutical industry in India to explore their opportunities. Towards achieving this aim,
the Council is taking delegations to various countries, organizing Business meets etc.
encouraging export activities by arranging fund support under MAI programmes of the
Government.
Services
This Council is a Government sponsored single window contact to the world of
Pharmaceuticals from India and an only authorized agency for issue of Registration cum
Membership Certificate (RCMC) for pharmaceutical exports under Foreign Trade Policy of
Government of India. Apart from this, the Council is also providing following assistance: -

(a) Trade Enquiries received from foreign Embassies /Buyers

(b) Market Development assistance as provided by Ministry of Commerce for business
tours to foreign countries.
(c) Arrange one to one Buyer/Seller Meets in India/Abroad.
(d) Arrange Exhibitions in India and Abroad for market promotion.
(e) Assist in Regulatory matters with domestic and Foreign Government agencies.
(f) Provide financial assistance for Product Registration charges, Research and
Development, Product showcasing etc. as per rules.
(g) Arrange Conferences/Seminars in domestic and foreign countries - for market and
technical up-gradation of information

4.12 SWOT Analysis of Indian Pharma Industry

India advantage

Cost competitiveness due to lower labour cost and production cost

Well-developed industry with strong manufacturing base

Well established network of Laboratories and R & D infrastructure for new drug
discovery and development

Access to pool of highly trained and skilled scientists, both in India and abroad

Strong marketing and distribution network in domestic as well as international market

India is second largest country in terms of population in world with rich biodiversity

Expertise in reverse engineering and development of new Chemical process made Indian
pharmaceutical industry as one of the strongest generic industry

Weaknesses

Low investment in innovative Research & Development

Lack of resources to compete with MNCs for New Drug Discovery Research and to
commercialise molecules on a worldwide basis

Lack of strong linkages between industries and academia

Lack of culture of innovation in the industry

Low per capita medical expenditure and healthcare spend in country

Inadequate regulatory standards

Production of spurious and low quality drugs tarnishes the image of industry at home and
abroad

Emerging trends and opportunities

Significant export potential to the developing as well as developed countries

Licensing deals and collaborations with MNCs for New Chemical Entities and New Drug
Delivery Systems

Providing marketing operations to sell MNC products in domestic market

India can be niche player in global pharmaceutical R & D by developing world class
infrastructure

Contract manufacturing arrangements with MNCs

Potential for developing India as a centre for International Clinical Trials

Increasing aging world population

Increasing incomes and buying power of people especially in rural areas has opened the
great opportunity for Indian pharma companies. Around 70% of the total population of
India is residing in rural areas.

Growing awareness for health and increasing spending on health

Threats

Product patent regime poses serious challenges to domestic industries unless it invests in
R & D.

R & D efforts of Indian pharmaceutical companies hampered by lack of enabling

regulatory requirement. For instance, restrictions on animal testing out-dated patent
office.

DPCO puts unrealistic ceilings on product prices and profitability and prevents
pharmaceutical companies from generating investible surplus.

Exports effort hampered by procedural hurdles in India as well as non-tariff barriers

imposed abroad.

4.13 LAWS AND REGULATIONS GOVERNING INDIAN PHARMACEUTICAL

The drugs and cosmetics act,1940
This act regulates the import,manufacture,distribution and sale of drugs in india
It contains in detail the regulation divided the difference schedules A to Y, schedule I and
schedule II. Some very impotents schedules are as follows:
Schedule M of the drugs and cosmetics act specifies the general and specific requirements
for factory premises and materials, plant and equipment and minimum recommended areas
for basic installation for certain categories of drugs part I describes good manufacturing
practices for premises and materials. Part II deals with requirements of equipments.
Schedule T

of the drugs and cosmetics act prescripts good manufacturing practices

specification for manufactures of ayurvedic, siddha and unani medicines. it is divided in two
parts. Part I deals with good manufacturing practices ,while part II deals with list of
machinery ,equipment and minimum manufacturing premises required for their manufacture.
Schedule y of the drugs and cosmetics act specifies about the requirement and guidelines on
clinical trials for import and manufacture of new drug. Additionally this act provides for
construction and functioning of various regulatory bodies like drug technical advisory board,
drug consultative committee, central drugs laboratory etc.
The pharmacy act,1948:
Indian market is 13th in domestic consumption value. Such a big market is regulated by
This act. This legislation regulates the profession of pharmacy in India. Under the provisions
of this act the central government constitutes a central pharmacy council of India and the
state governments constitutes a central pharmacy state pharmacy councils. Provisions
regarding joint state pharmacy council are also mentioned to the states who agree to share
these services jointly. the composition, structures and functions of councils are also
described. these councils control provisions regarding registration of pharmacists, education,
removal of name from register etc.

The drugs and magic remedies (objectionable advertisement) act,1954:

An act to control the advertisement if drugs in certain cases, to prohibit the
advertisement for certain purpose of remedies alleged to process magic qualities and to
provide for matters connected therewith.
The narcotic drugs and psychotropic substances act 1985:
This is an act to consolidate and amend the law relating to narcotic drugs, to make
stringent provisions for the control and regulations of operations relating to narcotic drugs
and psychotropic substances and for matters connected therewith.
The medicinal and toilet preparations (excise duties) act, 1956:
This act lay down the regulations for the levy and collection of duties of excise on
medicinal and toilet preparations containing alcohol. it also specifies the manufacturing
conditions to be maintained for such products.
Good clinical practice (GCP) guidelines:
For any type of clinical study involving human volunteers it is mandatory to follow these
guidelines. These are draft guideline for research in human subjects. These GCP guiltiness
are essentially based on declaration of Helsinki, world health organizations (WHO)
guidelines and international conference on harmonization (ICH) requirements for good
clinical practice.
Good laboratory practice (GLB) guidelines:
Good laboratory practice is defined in the OECD principles as a quality system
concerned with the organizational process and the conditions under which non-clinical health
and environment safety studies are planned, performed , monitored, recorded, archived and
reported. The purpose of the principles of good laboratory practice is to promote the
development of quality test data and provide a tool to ensure a sound approach to the
management of laboratory studies, including conduct, reporting and archiving.

Indian patent act 1940:

The acts started objective was to foster the development of an indigenous Indian
pharmaceutical industry and to guarantee that the Indian public had access to low-cost drugs
the patent bill was first introduced on parliament in 1967,but the patent act,1970 came into
forces only in 1972.
The drugs price control order (DPCO), 1995:
This is an order issued by the government of India under the essential commodities
act,1995 to regulate the prices of drugs. The order provides the list of prices of drugs. The
order provides the list of prices controlled drugs, procedures for fixation of prices of drugs,
method of implementations of prices fixed by government and penalties for contravention of
provisions among other things. The following are some of the other laws which have a
bearing on pharmaceutical manufacture, distribution and sale in India:
The industries (Development and regulation) act, 1951
The trade and merchandise marks act,1958
The Indian patent and design act.
Factories act.

4.12 MINISTRY OF HEALTH & FAMILY WELFARE (DEPARTMENT OF

HEALTH):
Central drugs standard control organization (CDSCO):
As an agency of the department of health, the CDSCO works both at the central and the
state level and is responsible for ensuring safety, efficacy and quality of drugs supplied to the
public. The agency performs the above mentioned functions with the drugs controller general
of India (DCGI) as the executive head.
Drugs controller general of India(DCGI):
The dcgi is an apex body in the pharmaceutical industry governing issues such as
approval/NOC for clinical trials, bioequivalence studies and marketing permission in India.
Along with it is also responsible for approval for test license, testing of drugs, registration for
import and licensing. Export NOCs=biological samples. Drugs.etc., licensing of blood banksDNA products. Vaccines and medical device. Amendment in drugs and cosmetics acts and
rules from time to time
Ministry of chemicals and fertilizers:
The ministry of chemicals & constitutes bodies such as the department of chemicals &
petrochemicals (DCP) and the national pharmaceutical pricing authority(NPPA). These
departments are entrusted with the responsibility of policy making, planning development
and regulations relating to chemicals, petrochemicals and pharmaceuticals.

4.16 NEW DRUG REGISTRATION:

Medicinal products count as new drugs in India if they fall into one of the following
categories:

Drugs not previously available in Indian market.

Drugs with new therapeutic indications or dosages that have not been
marketed in India.

New fixed-dose combinations of two or more drugs.

Any drug which was first approved in India less than four years ago, unless it
is included in the Indian pharmacopoeia.

All vaccines are treated as new drugs, unless notified otherwise by the DCGI.

For permission to import or manufacture of new drug substance and its formulation
for making in the country, applicant required to fill application in form 44 along with
prescribed fees in the form of treasury challan and all relevant data as per schedule Y to Drug
and cosmetics rules which include chemical & pharmaceutical information. Animal
pharmacological & toxicological data, clinical data of safety and efficacy regulatory status in
other countries etc and results of clinical trial on local population. New drug time frame in
which the application has to be reviewed, but a typical range is around 12-18 months.