Impact of COVID 19 on the Pharmaceutical Industry in India
Co-authored by Rahul Dwarkadas (Partner) | Sanaya Contractor (Senior Associate) | Rohini Jaiswal (Senior Associate)
1. In the pre-COVID-19 era, the Indian drugs and pharmaceutical industry held a third ranking worldwide for immense production by volume and fourteenth by value in 2019. Subsequently, due to the COVID-19 pandemic, the affairs of the Indian pharmaceutical industry have benefitted from substantial changes in the regulatory regime as enumerated below.
2. The primary statute that regulates the Indian pharmaceutical industry is the Drugs and Cosmetics Act, 1940 (“DCA”) and the Drugs and Cosmetics Rules, 1945 (“DCR”).
3. Whilst, the pandemic created enormous pharmaceutical supply chain disruptions that escalated costs, the Indian government implemented regulatory restrictions to minimize interruption of essential drug supplies such as:
(i) E pharmacy
On account of the mobility restrictions imposed by the government during the COVID-19 induced lockdowns, the drug retailers and distributors were permitted via the Drug Delivery Notification to extend their last‐mile delivery of prescriptive drugs as mentioned under Schedule H1 and Schedule X of DCR provided that compliance of mail registration, book keeping of stocks, invoice generation etc. is made.
(ii) Export of PPE kits, surgical masks, ventilators, sanitizers
In order to match an excess demand against limited domestic production, the government temporarily banned exports of inter alia these essential goods. Consequently, this trade measure resulted in optimal price standardization and prevention of illegal hoarding of these goods.
4. While the onset of pandemic highlighted some of the major lacunae in the Indian pharmaceutical industry such as shortage of manpower, domestic unavailability of medical inventory, lack of storage and logistics infrastructure, limited R&D design capability etc., however, the Indian government supported the recovery of the pandemic hit pharmaceutical sector by comprehensive upgradation of following policy measures:
(i) Accountability for quality of drugs
The DCR was amended to enable best practises of quality, labelling and marketing of drugs by the marketers. The DCR imposes the responsibility on every marketer who sells or distributes any drugs to ensure highest quality of supply of drugs and holds them accountable for any deviation with this standard. Subsequently, an agreement is required to be entered into by the marketer with the drug manufacturer affirming adequate labelling of the drug with the marketer’s name and contact information prior to effecting its sale.
(ii) Mandatory registration of medical devices
The MD Rules were also amended to enable categorization of all medical devices as ‘drugs’ in order to bring them within the purview of DCA and DCR for regulating quality and price of the drug. Consequently, all manufacturers are also required to obtain an ISO-13485 standard accredited by the National Accreditation Board for Certification Bodies to demonstrate their acumen for medical device production and services.
Post COVID 19 era
5. Based on the issues which arose in the pandemic, the Indian government has undertaken pivotal initiatives, set out below, to create a conducive, self-reliant pharmaceutical regulatory framework :
(i) Introduction of sale of drugs Over the Counter
The DCA is proposed to be amended to include a new category of drugs deemed to be sold Over the Counter (“OTC Drugs”) that are frequently required for the treatment of COVID-19 and related complications without a prescription. The sale and distribution of OTC Drugs may be made without a sale license, however only for dosages that are for brief dosages.
(ii) Implementation of QR Code in labelling of Active Pharmaceutical Ingredients (“API”)
The DRA is amended to provide an additional labelling requirement of QR Codes for domestically manufactured and imported APIs. This measure is for ensuring timely drug tracing, speedy availability and adequate security of essential medicines. The QR code is required to contain contact basic details of drug, brand name, batch number, manufacturer name etc.
(iii) Increased vaccine awareness in the Indian market
There has been an increased efforts to create awareness of and reduce vaccine resistance in adults for the Covid-19 vaccine in the Indian market. The Ministry of Health and Family Welfare, Government of India released the ‘Covid-19 Vaccine Communication Strategy’ to disseminate timely, accurate and transparent information to generate awareness and alleviate apprehensions and fears regarding the Covid-19 vaccine. As a result, Indian pharmaceutical manufacturers and marketers have used this opportunity to increase awareness of other adult vaccinations offered by them for vaccine preventable diseases.
There has a been an increase in vaccine awareness campaigns by such manufacturers and marketers for adult vaccination on platforms such as social media, radio, television etc. While initiating such awareness campaigns the vaccine manufacturers and marketers must ensure that the same is not being undertaken in contravention of the applicable laws, so as to induce promotion or advertisement of a particular brand of vaccines, but is only an awareness creation measure. Patients must be advised that any person choosing to be vaccinated for any vaccine preventable disease must consult their health care professional and be administered the same under supervision.
The COVID-19 resultant geo-economic and geo-political paradigm in India has fostered a shift from drug production to higher awareness and innovation of drug, equipment and vaccine manufacturing by pharmaceutical companies. With recalibration of business models, tailored to the requirements of each company, the same can be aligned with the newly amended pharmaceutical laws and regulations.
 Annual Report 2020 ‐ 2021, Department of Pharmaceutical, Ministry of Chemical Fertilizers, Government of India.
 Available at https://egazette.nic.in/WriteReadData/2020/218928.pdf