Drug Policy

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This site provides detail information on Drug Policy of India. The site also focuses on the current scenario and objectives of Drug and Pharmaceutical industry in India.

The basic objectives of policies relating to drugs were enumerated in the Drug Policy of 1986. But, the drug and pharmaceutical industry in India today faces new challenges on account of liberalization of the Indian economy and the globalization of the world economy on account of new obligations undertaken by India under the WTO Agreements. The pharmaceutical industry has been identified as one of the most important knowledge based industries in which India has a comparative advantage.

The main objectives of the Drug Policy are:-
  • Ensuring abundant availability of medicines at reasonable price and quality for mass consumption.

  • Strengthening the domestic capability for cost effective, quality production and exports of pharmaceuticals by reducing barriers to trade in the pharmaceutical sector.

  • Strengthening the system of quality control over drug and pharmaceutical production and distribution.

  • Encouraging R&D in the pharmaceutical industry in a manner compatible with the country’s needs and with particular focus on diseases endemic or relevant to India by creating an conducive environment.

  • Creating an incentive framework for the pharmaceutical and drug industry which promotes new investment into pharmaceutical industry and encourages the introduction of new technologies and new drugs.
    • The process of liberalization set in motion in 1991, has considerably reduced the scope of industrial licensing and demolished many non-tariff barriers to imports. Important steps already taken in this regard are -

    • Industrial licensing for the manufacture of all drugs and pharmaceuticals has been abolished except for bulk drugs.

    • Reservation of 5 drugs for manufacture by the public sector only was abolished and opening them up for manufacture by the private sector also.

    • Foreign investment through automatic route was raised from 51% to 74% and further to raised to 100%.

    • Automatic approval for FTA is being given in the case of all bulk drugs, their intermediates and formulations except those produced by the use of recombinant DNA technology.

    • Drugs and pharmaceuticals manufacturing units in the public sector are being allowed to face competition including competition from imports. Wherever possible, these units are being privatized.

    • Extending the facility of weighted deductions of 150% of the expenditure on in-house research and development to cover as eligible expenditure, the expenditure on filing patents, obtaining regulatory approvals and clinical trials besides R&D in biotechnology.

    • Introduction of the Patents (Second Amendment) bill in the Parliament, provides for the extension in the life of a patent to 20 years.

Drug and pharmaceutical industry today meets almost entirely the country’s demand. In the process the drug and pharmaceutical industry in India has achieved global recognition as a low cost producer and supplier of quality bulk drugs and formulations to the world. However, two major issues have surfaced on account of globalization and implementation of our obligations under TRIPs. These have been addressed in the Pharmaceutical Policy-2002. A reorientation of the objectives of the current policy has also become necessary on account of these issues, like -
  • Improving incentives for R&D in the Indian drug and pharmaceutical industry, to help achieve sustainable growth particularly in view of anticipated changes in the New Patent Law.

  • The need for reducing bottlenecks of 'price control' particularly in view of the ongoing process of liberalization.

For further information on Drug Policy please visit the following site, www.chemicals.nic.in