Government Crackdown Leads to Revocation of Licenses for 64 Pharma Companies


The government ordered to revoke the license of 17 Drug Testing Labs due to Non-Compliance with good manufacturing practices and procedures.

64 pharmaceutical companies had their licences revoked by Indian authorities over a year. Whereas 17 drug testing laboratories faced closure due to “continuous” procedural violations and non-compliance with “good manufacturing practices.”

“Good manufacturing practices” are defined by the World Health Organisation (WHO) as the part of quality assurance that guarantees pharmaceutical goods are consistently manufactured and controlled by the quality standards acceptable for their intended use and as mandated by the product specification. In addition to production and quality control issues, there is a legal component to address distribution duties, contract manufacturing and testing, and handling complaints and product defects.

Insiders within the Union Ministry of Health and Family Welfare informed BusinessLine over the past year by conducting inspections and inquiries scrutinising 423 companies, including listed entities and drug testing laboratories. These investigations unfolded in five phases, covering numerous manufacturing facilities.

Everything you need to know about the ongoing issue

Following the investigation, operations ceased at 101 pharmaceutical companies, with 52 instances of license suspensions. Additionally, 281 companies received show-cause notices. The government took action against 131 drug testing laboratories, with testing activities suspended for 52 of them.

The official said, “None of the licences that were cancelled has been renewed or re-issued so far,” further pointing out that “review of operations across pharma companies and drug testing laboratories is an ongoing process.”

Some examples involved the issuance of notices, followed by a review of the entire process and corrective action, and others involved suspension and cancellation in response to persistent non-compliance with good manufacturing principles.

Another official from the Union Health Ministry states that there are approximately 10,500 manufacturing units across the country, with 8,500 categorised as MSMEs. Among these, roughly 2,000 MSMEs, primarily exporters, possess WHO GMP (good manufacturing practice) certification. Compliance with GMP standards is now obligatory for all pharmaceutical companies operating in India.

Revoking the license of drug makers

According to a different official from the Union Health Ministry, there are an estimated 10,500 manufacturing units nationwide, of which 8,500 are classified as MSMEs. About 2,000 MSMEs, mainly exporters, hold WHO GMP (good manufacturing practice) certification. It is now mandatory for all pharmaceutical companies in India to adhere to GMP standards.

The second official stated that until December, some fifty manufacturers of cough syrup had not met quality criteria and that India had already tightened export regulations.

In a directive issued in May, the Commerce Ministry mandated that manufacturers of cough syrup must have their stocks tested at a government laboratory before shipment.

India ranks as the world’s third-largest producer of drugs by volume, following the US and China. Pharma exports are projected to exceed $20 billion in FY24, with cough syrup exports reaching $15 million annually.

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