Over the last few years, many Indian drug majors have faced international censure or action (primarily from the US drug regulator) over drug quality or for sub-par production standards. While individual companies have initiated corrective action, one of the chief reasons the sector suffers, as pointed out by an Icrier working paper, is the lack of uniformity in drug regulation.
At the moment, regulatory functions are divided between the Central Drug Standards Control Organization (CDSCO) and State Drug Regulatory Authority (SDRAs). While CDSCO approves new drugs and clinical trials and issues export-import permits, SDRAs grant manufacturing, distribution and sales licences and carry out inspection and quality control functions. This fragmentation and the lack of hierarchy between the two levels—since health is a State List subject—ensures that there is wide variance in the interpretation of the existing Drug and Cosmetics Act (DCA). The lack of uniform regulation, thus, fosters an ecosystem in which quality standards suffer. The Icrier paper recommends a more harmonised drug regulation regime, either with the CDSCO as the reporting authority for SDRAs or SDRAs becoming its regulatory partners. The former would need either a Constitutional amendment, to put health in the Concurrent List, or enactment of new laws—either under the ‘Drugs and Poison’ (Entry 19) of the Concurrent List or using the “industries whose control by the Union is … in the public interest” entry (Entry 52) of the Union List. The latter seems easier as it would require providing for greater coordination between SDRAs and the CDSCO in the Drugs and Cosmetics (Amendment) Bill 2015.