In a significant move to tighten drug safety and regulatory oversight, the Indian government is preparing a major overhaul of its pharmaceutical licensing system. The central reform involves introducing a separate wholesale licence specifically for bulk drugs, active pharmaceutical ingredients (APIs), and key starting materials.
Dismantling the Umbrella System
The new policy aims to dismantle the current umbrella licensing framework, which has been in place for years. Under the proposed system, regulators will create a comprehensive database of nearly 1.2 million bulk drug traders operating across the country. This enhanced traceability is crucial as over 70% of India's pharmaceutical raw materials are imported from China.
Officials state that the refined licensing mechanism will allow authorities to quickly pinpoint and hold accountable dealers who supply substandard or contaminated inputs. This is a direct response to weaknesses exposed in India's vast $50-billion pharmaceutical market.
A Response to Global Scrutiny
The push for reform follows severe global reputational damage suffered by the Indian pharmaceutical industry after deaths in several countries were linked to contaminated cough syrups manufactured in India. The incident triggered sharper international scrutiny over drug safety standards and supply chain integrity.
A draft notification covering the new licensing regime is currently being prepared. It will encompass APIs and intermediates, a market valued at approximately $3.5 billion for the financial year 2024-25 (FY25).
Stricter Standards and Industry Outlook
Experts in the field believe that separate licences will enable the enforcement of stricter standards for storage, handling, and monitoring throughout the chemical-heavy bulk drug supply chain. Implementing these changes across a fragmented market may take considerable time and effort.
However, both industry and legal experts broadly view the proposed reform as a long-overdue step to strengthen quality control from the ground up. The ultimate goal is to restore confidence, both domestically and internationally, in India's pharmaceutical ecosystem. While the transition may pose logistical challenges, the consensus is that it is a necessary evolution for the industry's sustainable future.
