Photographer: Dhiraj Singh/Bloomberg

India's Government Plans to Expand Its Drug Regulator

  • Generics from India have come under greater FDA scrutiny
  • Modi government is making a push to lower health-care costs

India plans to beef up its domestic drug regulator to boost confidence that the medicines sold by its sprawling generics industry at home and overseas are safe and effective, people with knowledge of the matter said.

The country’s Central Drugs Standard Control Organisation is looking at hiring as many as 250 new inspectors this year, inspecting wholesalers and retailers for things like storage practices, and increasing the number of medicines tested this year for safety and efficacy by 70 percent, according to two of the people, who asked not to be identified because the deliberations aren’t public or finalized.

The regulatory expansion comes after a wave of inspections by the U.S. Food and Drug Administration, which has boosted scrutiny of overseas suppliers. FDA visits in recent years have uncovered shortcomings at various Indian drug manufacturers, resulting in sanctions that restricted their access to the U.S., the world’s largest drug market, and necessitated months of costly remediation.

At the same time, Prime Minister Narendra Modi is looking to lower the cost of medicine for India’s poor by mandating doctors prescribe drugs by their generic names rather than brands which can be more expensive. While generic drugs dominate India’s domestic market, a hybrid category has emerged known as branded generics, where a generic formulation is sold under a trademarked name, often for a premium. Building confidence in the safety of cheaper unbranded copycat medicines could help encourage their use.

India’s pharmaceutical exports brought in $12.5 billion in 2015 and accounted for 20 percent of global generic drug exports by volume, making it the world’s biggest supplier of generics, according to the most recent government data. Large companies like Sun Pharmaceutical Industries Ltd. and Dr. Reddy’s Laboratories Ltd., the country’s two biggest drugmakers, have several factories approved to sell to the U.S. But many manufacturers don’t sell to foreign markets at all.

International Capabilities

"We are committed to the quality, safety and performance of the medical products," G.N. Singh, the Drugs Controller General of India, who heads the regulator, said when reached by phone and asked about the expansion of the organization. "Whatever steps have to be taken we are going to take."

While the Indian regulator already inspects drug factories, the added resources would help it boosts its oversight over the industry. By the end of this year, the agency is also aiming to have capabilities in place to conduct inspections in China, source of many of the raw chemicals used in Indian drug production, two of the people said.

India’s northern neighbor has emerged as the supplier of as much as 65 percent of the Indian industry’s raw chemical materials for drug production, according to a paper last year from the Associated Chambers of Commerce & Industry of India.

Drug affordability at home has emerged as an area of focus for Modi’s government. With a limited public health-care system and underdeveloped insurance market, nearly 90 percent of health-care spending in India is paid out of pocket, according to the World Bank.

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