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Pharma & Biotech Economics

How Drugs Are Regulated in India

How India's drug regulators approve medicines and inspect factories, why quality scandals damaged trust, and how rules were tightened.

India’s drug regulation is shared between the Central Drugs Standard Control Organisation (CDSCO), headed by the Drugs Controller General of India, and state drug regulators.

Who does what

  • CDSCO approves new drugs, oversees clinical trials and imports.
  • State regulators license most manufacturing units and pharmacies.

This split has sometimes led to uneven enforcement.

Quality problems

  • Cough syrups made by some Indian firms were linked by the WHO to child deaths in The Gambia in 2022 and Uzbekistan, and similar incidents occurred in India.
  • Surveys and tests have found some substandard medicines, especially from smaller manufacturers.

Tightening rules

  • A revised Schedule M, notified in 2023, required manufacturers to meet updated good manufacturing practices similar to global standards, with deadlines for smaller firms.
  • Mandatory testing of cough syrups before export.
  • More risk-based inspections.

The economics of regulation

  • Stronger standards raise costs, especially for small firms, some of which may close.
  • But quality failures damage India’s reputation as a supplier, hurting the entire industry and patients.

Global regulators

Indian plants exporting to the US and Europe face inspections by the US FDA and others. Warning letters can block exports, so quality is also a business necessity.

The small maker's upgrade

A small medicine maker must upgrade its plant to meet revised Schedule M standards. The investment is large, but it allows the firm to supply hospitals and export, while unregulated rivals shut down.

Thinking regulation only adds costs

Strong regulation protects patients and the reputation that lets Indian firms sell worldwide.

Key takeaways
  • CDSCO and state regulators share drug regulation in India.
  • Cough syrup deaths abroad and substandard drugs exposed weaknesses.
  • Revised Schedule M (2023) raised manufacturing standards.
  • Quality is essential for exports and India's reputation.
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