India’s Pharmaceutical Industry: An Overview

India is the world’s second most populous country after China, with a total population of about 1 billion. While much of India is rural and poor (over 70 percent of the population lives in rural areas and the per capita income is estimated at US$400), there are over 150 million Indians with annual incomes of US$1,000 or more (the “middle class”). Approximately 25 percent of the population, or 250 million people, have access to Western medicine. (The rest depend on traditional indigenous medicine, including homeopathy.)

India’s Western pharmaceutical market is valued at approximately US$3 billion and is growing at roughly 14 percent per year. There are over 6,500 pharmaceutical brands sold in India in 77 therapeutic segments. Imports account for only about 4 percent of pharmaceutical sales in India, however, because of local production, multinational (non-Indian) companies enjoy a 40 percent share of the Indian market. Price controls are in effect on certain drugs by virtue of the Drug Prices Control Order of 1995, and under the Essential Commodities Act (ECA).

The major source for pharmaceutical regulation is the Drugs and Cosmetics Act 1940 (DCA), and the Drugs and Cosmetics Rules (DCR) made there under. This legislation applies to all pharmaceutical products, whether imported or made in India. The legislation is enforced by the Central Government in New Delhi, which is responsible for overall supervision. The office of the Drug Controller of India (DCI) has primary responsibility. Matters of product approval and standards, clinical trials, introduction of new drugs, and import licenses for new drugs are handled by the DCI. At the field level, enforcement is generally done by individual State governments through their Food and Drug Administrations. This includes getting approvals for setting up manufacturing facilities and obtaining licenses to sell and stock drugs in distribution centers and retail outlets.