In our last post, Dangers in Growth for Dynamic India, we discussed pressures on the Indian pharmaceutical industry to improve its manufacturing processes to prevent reputation and legal issues from other countries.
The Federal Government of India announced it would spend USD$79.6M on strengthening the regulatory system for medicines.
The Minister announced funding allocations for setting up additional drug testing laboratories and upgrading those extant. The timing of the spending was not clearly defined.
The risks for the USD$24.5B (2021-2022) Indian pharmaceutical industry are very large. Indian manufactured drug substances are typically priced at advantageous costs compared to first-world pharmaceuticals. Reputational risks are very high, focused on the Indian Government Indian government's encouragement of the industry will be extended with measures to protect the reputation of Indian products sold globally. Domestic pressures in jurisdictions like Japan, the EU, and the USA led to a strong movement to eliminate offshore/contract manufacturing of pharmaceuticals. The continuing role of Indian regulators also compels them to act to protect the reputations and business turnover of Indian-based firms and manufacturing.
The implications of the new Federal quality and GMP initiatives on Indian firms are very large. Additional costs, priorities, and assignments to improve plant quality will inevitably fall on enterprises that have expended the least amount of toil and resources. Those Indian firms will become less competitive with enforcement as competitors better prepared for the international markets see a return on their sunk costs and ongoing quality efforts. Any additional regulations will only continue the trend of increasing compliance and conformance costs while better-prepared competitors will not be held back.
You can find more pieces about Dynamic India at www.ekalore.com/india-business. EkaLore tracks the unique advantages and challenges India faces domestically and abroad.
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