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India’s pharmaceutical sector caters to 20 percent of the global demand for generic drugs and 60 percent of the global demand for vaccination. Notably, we also have the largest number of pharma manufacturing sites approved by the United States Food and Drug Administration (USFDA) outside of the United States.

In 2021, India’s pharmaceutical market was valued at $42 billion and this is likely to reach $65 billion by 2024, and further increase to $120-130 billion by 2030. Growth in this sector can be further accelerated if quality standards are upgraded. And if India can firm up its position as a hub for manufacturing and supply of high-quality pharmaceutical products.

In 2019, the USFDA conducted a total of 239 audits for drug quality assurance in India and issued 19 warning letters (amounting to approximately 46 percent of the total letters issued) to Indian pharmaceutical companies. Notably, India has undergone the highest number of USFDA inspections since 2009.

In a survey conducted by TeamLease Regtech in 2021 on the compliance officers of major pharmaceutical companies, it was observed that 97 percent of the major pharmaceutical companies believe that they lack the required visibility and control over their compliance program. Further, 90 percent of the major pharmaceutical companies had missed at least one critical compliance during the previous year, and 95 percent of them had incurred fines and penalties for non-compliance.

In this context, it may be noted that while large players have the benefit of enabling resources, smaller players are falling behind in ensuring quality testing and automation, and product quality and regulatory compliance are compromised.

Also read: These are the top 10 pharma companies in the world

Quality concerns have led to reputational risk and increased scrutiny by foreign regulatory authorities. This needs to be dealt with on an urgent basis to ensure that India can achieve maximum benefit on account of the opportunities created by the ongoing economic and political developments.

1) Follow global practices

Pharmaceutical companies can consider adopting global best standards. Benchmarking and sharing best practices by pharmaceutical companies are also critical tools for fueling business strategies and growth. Monitoring and analysing competitors’ products, as well as the customers’ sentiments towards such products, can help companies gain competitive intelligence that can be used to improve product quality.

Under the amended Drugs and Cosmetics Rules, 1945, drug marketers are equally accountable for quality concerns arising from products manufactured by third parties. Efficient implementation of this measure will result in awareness amongst various stakeholders, and ultimately have a positive impact on the quality of pharmaceutical products manufactured and sold.

2) Digitise

An effective digital track and trace system will also go a long way in eliminating counterfeit drugs being sold in the market. Reportedly, the Indian government has such a track and trace program in the pipeline.

Recently, guidelines for “strengthening of the pharmaceutical industry” to deal with the demand and requirement for support to, among others, MSME enterprises in the pharmaceutical sector have been introduced. The intention is to enable MSMEs to meet national and international regulatory standards such as the WHO-GMP and Schedule-M and, consequently, improve quality. Since the MSME sector is the backbone of our economy, any reform introduced for this sector will lead to its growth and consequent generation of employment and income.

While the Indian Government is taking steps to promote the pharmaceutical sector, concerted action is necessary and large players need to integrate effectively with MSMEs so that the sector can benefit from consequent synergies and market expansion.

3) Internal checks

Simplification of regulatory hurdles, streamlining of the compliance requirements, and enhanced usage of information technology and, where possible, artificial intelligence is going to be the key driver in helping pharmaceutical companies focus more on quality control and assurance.

Further, pharmaceutical companies need to invest more in improving their internal control-check mechanism. They should also focus on strengthening their quality management systems, fostering a quality culture, and training and upskilling their talent pool.

The Indian Government has stated its intent to become a member of the ICH (International Council for Harmonisation of Technical Requirements for Pharmaceuticals for Human Use) and the PIC/S (Pharmaceutical Inspection Co-operation Scheme). This endeavour will lead to the harmonisation of quality and regulatory standards on a global level and consequently allow Indian pharmaceutical companies to achieve global quality standards. This will also decrease repeated inspections by regulators.

4) Self-regulation

Self-regulation is another tool that could be employed more effectively by pharmaceutical companies to improve quality. However, it may be noted that while self-regulatory systems have proved to be effective in the European markets, it has seen little success in India. Necessary corrective action should be taken and self-regulation should be used as an effective measure for quality control considering its low costs and ease of implementation.

One of the key advantages of manufacturing in India is the low manpower cost. To have the continued benefit of this advantage, it is critical that suitable training is imparted to develop competence to apply technology and artificial intelligence in optimising production processes and quality.

Export of pharmaceutical products from India is anticipated to grow multifold. However, certain other developing countries are posing steep competition to become viable destinations for manufacturing and exporting pharmaceutical products. If India’s pharma sector can fix its quality loopholes, its growth is inevitable.

The writer is a partner at Shardul Amarchand Mangaldas & Co. 

The thoughts and opinions shared here are of the author.