To ensure uniformly high standards in the domestic pharmaceutical industry, the Centre plans to take over from the states the authority to clear manufacturing units. This means the power of state drug controllers to license companies wanting to set up manufacturing units would be transferred to the office of a centralised drug controller general. The far-reaching measure would transform the pharmaceutical industry, which logs a turnover of Rs 60,000 crore annually, growing at a CAGR of 16%.
At present, if the drug controller in one state denies a pharma company permission to set up a facility on procedural grounds, the firm can simply apply to another state. After setting up a manufacturing facility in that other state, the company?s drugs can then be shipped to the state that had earlier denied it permission.
Currently, companies can play off states against each other to obtain favourable interpretation of procedural regulations resulting in sub-standard drugs surfacing in the market. Drug controller general of India Surinder Singh said by changing the law and empowering the central drug authority to grant manufacturing licences, such anomalies would be rectified.
The proposed new law would also bring about standardisation in drug manufacturing processes and complement the Central Drug Authority Bill that seeks to enhance the punishment for spurious drug manufacturers. Currently, the Central Drug Standard Control Organisation has powers to approve new drugs, clinical trials, import registration, licensing of blood banks, vaccines, medical devices as well as ban drugs and cosmetics.
State-level licensing authorities approve manufacturing sites for drug manufacture, license establishments for sale and distribution of drugs, grant approval for drug testing labs, monitor the quality of drugs marketed in the country and recall substandard drugs.
However, since the change in norms would need shifting the subject from the Concurrent List of the Constitution to the Central List, it requires constitutional amendment. Though the government plans to introduce the necessary legislation in Parliament, immediate passage would be difficult as constitutional amendments require not only approval by both Houses of Parliament, but also ratification by two-thirds of each state assembly. Sources said most states are likely to resist a dilution of their powers.
The government?s move forms part of the Central Drug Authority Bill, providing for a national health regulator, which conceives of a centralised licensing authority to regulate the healthcare sector, including pharmaceuticals. The Bill, which is being considered by a parliamentary standing committee on health & family welfare headed by Amar Singh is learnt to have submitted its report and the Bill might be taken up some time next year, according to a health ministry official.