Measures for Nationalisation, Quality Control and Growth of Drugs & Pharmaceutical Industry in India

Item

Title
Measures for Nationalisation, Quality Control and Growth
of Drugs & Pharmaceutical Industry in India
extracted text
i

Measures for Nationalisation, Quality Control and Growth
of Drugs & Pharmaceutical Industry in India

Government of India
Ministry of Industry
Department of Chemicals and Petrochemicals

MEASURES FOR RATIONALISATION, QUALITY CONTROL AND
GROWTH OF DRUGS 6 PHARMACEUTICAL INDUSTRY IN INDIA.

INTRODUCTORY
1.1.
Health is a fundamental human right. The Constitution
of India directs the State to regard the improvement of public
health as among its primary duties. The Five Year Plants have been
providing the framework within which the Centre and States have
developed their health services infrastructure and programmes.
Since the attainment of Independence considerable progress has been
achieved in the promotion of health status of the people - as refleced
in the eradication/control of diseases like small-pox, malaria etc.,reduction in mortality rate, jtise in life expectancy, creation of
a fairly extensive network of health care institutions and the avail­
ability of a large stocks of medical and health personnel.

1.2
The National Health Policy of 1983 marks a significant
step in the national endeavour to improve public health. It reiterates
India's commitment to the goal of "Health for all by the year 2000
A.D." through the universal provision of comprehensive primary
health care service. The attainment of this goal requires an accele­
rated development of all inputs to the health care system, including
essential and life saving drugs and vaccines of proven quality.
Drugs alone are not sufficient to provide health care. However,
if rationally used, they do play an important role in protecting
maintaining and restoring the health of the people and in controlling
population. The Indian Pharmaceutical Industry has, therefore, a
vital role in serving the basic health needs of the poeple.
1.3
The Report of the Hath! Committee (1975) is an important
landmark in the development of the Indian Pharmaceutical Industry.
The Hath! Committee emphasized the achievement of self-sufficiency
in medicines and of abundant availability at reasonable prices of
essential medicines. Since 1975, the Indian Pharmaceutical Industry
has grown to be the most diversified and vertically integrated
pharmaceutical industry in the entire Third World. The country
has achieved self-sufficiency in formulations and also in a large
number of bulk drugs. In 1984-85, imports of formulations were
only Rs. 10.17 crores or about 0.5% of the total formulation production
in the country and imports of 49 bulk drugs were neglible. Techno­
logies for the production of several bulk drugs, including antibiotics
like Ampicillin,
Amoxycillin,
Erythromycin, Anti-infectives like
Sulphamethaxazole and Trimethoprim., anti-TB drugs like EthambutoCardio Vascular drugs likeMethyl Dopa; Analgesics like Ibuprofen and
Isopropyl antipyrine; anti-amoebics like Metronidazole and Tinidazole,
anti-cancer drugs like Vinblastine, Vincristire and Cisplatin were
indigenously developed. The trade balance in pharmaceuticals is
also improving as a result of increasing exports. In 1984-85, exports
of drugs and formulations were Rs.217.49 crores while imports were
Rs. 215.62 crores. A wide range of bulk drugs and formulations
1

being exported to several countries, including the U.S. and
West European countries. Some Indian firms have also
set
up production facilities in other countries'' and are also engaged
in the sale of turnkey plants and technical services. The diverse
production and technological capabilities developed by the Indian
Pharmaceutical Industry are valuable assets in achieving the goals
of the National Health Policy and in fully harnessing the export
potential.

are
the

1.4
While these achievements are impressive by themselves,
there are many areas where the industry
has to reorient itself
if it has to effectively serve the health needs of the people. The
present production pattern does not adequately reflect the genuine
requirements of the health care needs of the country. The prolife­
ration of formulations and packs without adequate therapeutic ratio­
nale is a matter of concern. While many firms in the organised
as well as small scale sector have excellent internal testing faci­
lities and a good record of quality control and adoption of good
manufaturing practices, the same cannot be said of a large number
of firms manufacturing
formulations. The present institutional and
statutory arrangements for enforcing quality control for registration
of new formulations, for monitoring adverse reactions and for dissemi­
nation of unbiased information about the safety and efficacy of pro­
ducts marketed in the country are far from being adequate.

1.5
Abundant availability on a continuous basis,at reasonable prices,
of essential, life saving and prophylactic medicines of good quality,
is the corner stone of the new measures. It shall be the end­
eavour of the Government to ensure that the above objective, which
is in consonance with the Government's Policy of reaching Health­
care facilities to the common masses and with that of ensuring
Health for all by the year 2000 A.D., is achieved. In or ■' to
subserve this objective, changes have been brought about in the
system of price control of drugs as well as in the licensing and
approval procedures. Experience gained in the implementation of
the Drugs (Prices Control) Order, 1979 has clearly shown that
the pricing system needs to be simplified and rationalised, if the
benefits of the price control are to be effectively realised by
the consumer, particularly the weaker sections of the society for
safeguarding whose interests the Government is committed. The span
of price control
at present is impracticably large covering 347
bulk drugs and over 4,000 formulations marketed in- about 20,000
packs. It is proposed to reduce to a considerable extent this span
of control and to make the price control system less cumbersome
but more effective.
1.6
As prices of drugs are also determined by the cost
effectiveness of domestic production, it is imperative to impart
a technological and productivity thrust to the Indian Pharmaceutical
Industry which would also enable it to harness export opportuni­
ties. The objective of ensuring abundant availability of medicines

2

at reasonable prices, will be best served by promoting competition
and economic scales of production and also by removing unnecessary
barriers to growth. To this end, licensing and approval procedures
have been simplified and greater
flexibility given in order to
encourage investment and production in the desired areas, specially
those of essential and life saving drugs. The validity of this premise
has already been estanlished by the experience, in recent years,
with the market prices of bulk drugs being lower than the statutory
prices whenever a bulk is produced by a good number of manufac­
turers. At the same time, FERA companies will continue to be regu­
lated by Government to ensure that their operations are in conso­
nance with the national objectives and priorities.

1.7
• It is against this backdrop that the Government has
reviewed the functioning of the Drug Policy and now restructured
the policy in the light of the experience gained and keeping in
mind the objective of achieving "Health for All by the Year 2000
A.D."

PART II - OBJECTIVES

2.

The new measures aim at:
(a)

ensuring abundant availability, at reasonable prices,
of essential life saving and prophylactic medicines
of good quality;

(b)

strengthening the system of quality
drug production and promoting the
of drugs in the country;

(c)

creating an environment conducive to channelising
new investment into the pharmaceutical industry,
to encouraging cost-effective production with eco­
nomic sizes and ‘to introducing new technologies
and new drugs, and

(d)

strengthening the
tion of drugs.

indigenous capability for produc­

PART - HI - RATIONAL
3.1

control over
rational use

USE OF DRUGS

Registration of new formulations, rationalisation of exist­
ing formulations and creation of a National Drug Authority.

New ‘formulations based on drugs already approved for
use in the country would not be allowed to be manufactured unless
their therapeutic efficacy and rationality are adequately tested
and proved. A machinery to be called the National Drug 8 Pharma3

ceutital Authority would
a permanent secretariat.

be established at the Central level,

3.2

Registration of new drugs

with

With a view to exercise closer scrutiny over the intro­
duction of new drugs in the country, the Drugs and Cosmetic Rules
will be amended to define clearly a new drug and to give statutory
basis to the detailed guidelines which would be drawn up for the
scrutiny and approval of new drugs.

3.3.

Standardisation of packaging

With a view to ensuring the proper dispensing and use
of
drugs , statutory guidelines for packaging instructions would
be laid down. Colour coding of packs would be insisted upon to
differentiate products according to the degree of hazard. Packs
would also be standardised.

3.4.

Monitoring of adverse reaction

During the VII Five Year Plan, Central and peripheral
units would be set up to monitor adverse drug reactions. It is
also proposed to develop a Central Information Bank on the safety.
efficacy, prescription and use of all drugs.

3.5.

Use of generic name

Pending a final decision by the Supreme Court, per­
mission is being granted for marketing single ingredient formulations
of new drugs subject to the following conditions that the generic
(Proper) name should be displayed in double the size of the trade
(brand) name both in equally bold letters. Generic names will be
progressively adopted in the case of all drugs included in the
list of essential drugs.

3.6
Apart from the allopathic system of medicine, it is
also proposed to encourage and improve upon the traditional system
of medicine with a view to widening the coverage of health care
schemes of the government. It is a recognised fact that large portions
of our population, ■specially those in the rural areas, prefer to
use the traditional Indian system of medicine, both for reasons
of faith as also lack of access to the modern medicines; Ayurveda,
Unani and Siddha systems of medicines have been practised in this
country for several centuries. However, there is no uniformity in

4

the methods of preparation of the compound drugs
in
use in
these systems, identification of ingredients and their composition.
In order to bring about some uniformity and standardisation. Ayur­
vedic, Siddha and Unani Pharmacopoeial Committee constituted by
the Government of India are bringing out "National Formularies". The
Formularies indicate the ingredients with their scientific names,
the proportions in which these drugs are used and the method
of preparation. This is the first phase for the standardisation
work before finalising pharmacopoeial standards. The Pharmacopoeial
Committees have now simultaneously taken up the work of evolving
of standards in respect of single ingredient drugs used in these
systems.
3.7
It is proposed to speedily evolve pharmacopoeial stan­
dards in respect of the drugs in these systems and also to enlarge
and reactivate drugs testing facilities in each State in order to
ensure quality control.
It is also
proposed to take steps for
ensuring steady and regular availability ot raw material for the
growing pharmaceutical industry in the Indian systems of medicine
both to meet internal as well as export demands.

PART - IV 4.1

QUALITY CONTROL

Strengthening infrastructural facilities

It is decided to step up the Central and State infrastruc­
tural facilities for quality control in a phased manner during the
VII and VIII Five Year Plan periods. The progress made in the
provision of these infrastructural facilities and the effect on en­
forcing quality control would be reviewed at the end of the VII
Five Year Plan with a view to make the necessary corrections and
to strengthen the machinery for ensuring quality control.

4.2

Internal Testing Facilities

During the VII Five Year Plan period, it will be ensured,
through intensive inspection and corrective action, that all manu­
facturers have internal testing facilities.

4.3

Good Manufacturing Practices

Statutory effect would soon be given to the good manufac­
turing practices which lay down the minimum
requirements to be
observed in terms of accommodation,equipment, qualified personnel',
testing facilities and hygiene in a manufacturing unit.

5

Loan Licensing

4.4

It is decided to discontinue the loan licensing system
in a phased manner before the end of the VII Five Year Plan.
Certification Scheme

4.5

With a view to promote quality-consciousness in the
field of drugs both among the manufacturers and user-agencies and
to simultaneously reduce the workload on the statutory Drug Controller
Agencies, efforts will be made to introduce a certification system
under which recognised institutions with proven expertise and testing
facilities can certify the adoption
by formulators of good manufac­
turing practices and the quality of formulations manufactured.

PART V - PRICING
Basic Approach

5.1

The Hath! Committee was of the view that more selectivity
in the system of price regulation with a view to ensuring fair prices
of drugs and formulations would be desirable. In the case of formu­
lations (other than generic), selectivity could be in terms of (a)
size of the units; (b) selection of items, and (c) controlling the
prices only of market leaders, in particular, of products for which
price control is contemplated. An appropriate combination of these
criteria is also feasible. The new pricing regulation would be in
conformity with the principle of selectivity commended by the Hath!
Cortmittee.

5.2

Coverage

It is decided to rationalise the present categorisation
of bulk drugs and formulations keeping in view the following objec­
tives:
(a)

To stimulate production of drugs and formulations
which are essential to the needs of large majority
of the people of the country;

(b')

To make the price control system less cumbersome
but more effective, by reducing the span of control;

(c)

To ensure a reasonable return to the producers
of essential drugs, while at the same time restric­
ting undue increase in their price.

6

Keeping this objective in view, it is now decided to
have 2 categories of formulations and bulk drugs required in place
of 3 categories which exist at present. Category I wlould consist
of drugs required for the National Health Programme and the MAPE
(maximum allowable post manufacturing expense incurred from the
stage of manufacuring to retailing and manufacturers' margin) allowed
for drugs in
this category would be 75%; category II would consist
of drugs other than those in category I but which are also considered
essential for the health needs and a MAPE of 100% for formulations
would be allowed while fixing the prices for this category of drugs.

The list of drugs in Category II on the basis of these
guidelines would be drawn up within 3 months, by a committee consis­
ting of representatives of Department of Chemicals 8 Petro-chemicals,
Ministry of Health, Bureau of Industrial Costs and Prices and some
State Governments. Till such time as this is finalised the existing
Drug Price Control Order will continue to be in operation. In the pro­
posed Drugs (Price Control) Order which would be announced after
the list of drugs in each category is finalised,
there would be a
stipulation to the effect that Government will have the right to bring
within the ambit to control any drug in the de-controlled category
at any point of time, should it be considered necessary to do so.
With a view to encourage production of drugs which
are more essential to the needs of the country, incentives, other
than the MAPE, would also be considered. Government would at
the same time strictly monitor the prices of drugs of de-contrrolled
category and for this purpose an effective monitoring machanism
shall be developed.

Norms of Pricing

5.3

It is decided to have a uniform norm for all bulk drugs
falling in the
controlled category I and II and the manufacturers
will be given the following three options

i)

14% post tax return on net worth; or

ii)

22% return on capital employed; or

iii)

Long term marginal costing with 12%
rate of return in the case of new plants.

internal

The maximum retail price of domestically produced
items excluding excise duty and local taxes, if any, would not
be higher than ex-factory cost by more than 75% in the case of
category I formulations and by more than 100% in the case of category
II formulations. This is to say, MAPE would be 75% and 100% respec­
tively for category I and II formulations, of the ex-factory cost.

7

In respect of imported formulations, selling and distri­
bution expenses, including interest and importers' margin, shall
not exceed 50% of the landed cost.

5.4

Drug Price Equalisation Account (DPEA)

The DPEA was set up essentially to encourage domestic
production of bulk drugs through a system of retention pricing;
However, in actual practice the operation of DPEA is giving rise
to
intractable administrative problems, with anticipated accruals
to the DPEA being thwarted by disputes and claims on the DPEA
put forth promptly. It is, therefore,
decided to discontinue the
system
of retention and pooled pricing. Protection
for indigenous
productio of bulk drugs, wherever necessary, would be provided
through the tariff machanism. However, provision would be made
in. the new Drug Price Control Order to ensure that amounts which
have already accrued to the DPEA and those which are likely to
accrue as a result of action in the past, are protected and used
for the purpose stipulated in the existing DPCO.
PART VI - LICENSING
6-1

FERA Companies

The business operations of FERA companies would have
to be in accord with national objectives and priorities. FERA com­
panies would be eligible for entry mainly in those areas where
the entry is desirable from the objectives of better health care.
The list of bulk drugs open to all sectors has been revised accor­
dingly. FERA companies would be eligible for licenses mainly in
respect of these bulk drugs, subject to a phased manufacturing
programme, and related formulations in
order to encourage higher
bulk drug production, the ratio betwreen the value of production
of bulk
drugs
to that of formulations (hereinafter referred to
as ratio parameter) would be reduc.ed from 1:5 to 1:4 for FERA
companies. The definition of "drugs and pharmaceuticals'' listed
at Entry 14 of Appendix I of the Industrial Licensing Policy, would
now read as in Annexure I.

Companies other than FERA Companies
These companies would continue to be eligible for indus­
trial approvals in respect of all bulk drugs which are approved
for use in the country and related formulations, subject to sectoral
reservations for public and small scale sectors.

6.3

Role of Public Sector

Public Sector will continue to have an important role
particularly in the production of basic bulk drugs which are central
to the needs of the National Health Programme. However, the Goovernment recognise the fact that the public sector units will have

8

to
function at optimum levels of efficiency, in production as well
as marketing, in order to fulfil the role that has been assigned
to them in the new policy, namely, that of making available essential
bulk drugs at reasonable prices. Keeping in view the crucial role
of the public sector in achieving the objectives of National Health
Programme, indepth exercises have already been initiated to prepare
an action plan of steps to improve performance of each of the public
sector units.

Rehabilitation and restructuring plans for these public
sector undertakings are expected to be finalised very shortly.
These plans shall include changing management cultures and values*
improvement of management system; improvement in product strategy:
internal generation of cash; savings in fixed costs; reduction in
line wastage and batch rejection; improvement in technology; reduc­
tion in expenses on utilities; reduction in inventory levels; better
and more sensitive marketing
strategy; higher capacity utilisation;
better utilisation of R8D facilities etc.
It is decided to continue, to a substantial extent, the
present policy of reservation for .manufacture by the public sector
of certain important bulk drugs. At present 17 bulk drugs including
Pencillins
and Polio Vaccines are exclusively reserved for production
by the public sector units. Considering the projections of requirement
of Penicillins, it is decided to expand the capacity of Penicillin
in the existing public sector units along with induction of more
advanced technology. However, it is felt that even with these meas­
ures the public secor units will by themselves not be in a position
to meet the entire requirements of the country of these two basic
and essential drugs. The 1989-90 demand of Penicillin is estimated
to be as high as 2470 mmu as .against the existing installed capacity
of 637 mmu inclusive of 390 mmu in the public sector. Thus the
present gap in the demand and production of this crucial drug would
further widen by the end of 7th Plan period unless corrective steps
are taken to narrow it. At present, in
order to meet the require­
ments of this essential drug, imports are also resorted to which
result in an outgo of foreign exchange to a substantial extent, this
outgo being of the order of Rs.24 crores in the year 1985-86. Simi­
larly
Polio vaccine which is an extremely important input in the
immunisation
programme of the Government is yet to be produced
in the country. A capacity of 10 million doses is being installed
by M/s. Halfkine, a Maharashtra Government undertaking. However,
the 1989-90 demand is estimated to be 80
million doses
taking
into account the requirement of the Expanded Immunisation Programme.
Keeping in view the large gap between the capacities created and
the 1989-90 demand for Penicillin and Polio Vaccine, the need to
reach self-sufficiency in these two vital products, it is decided
to open these two products for production by all sectors. The demand
for these essential drugs would continue to be met through imports
also till such time as indigenous production has reached, a level
where imports become unnecessary. However
15 other bulk drugs

9

which are presently reserved for the public
to be so reserved (Annexure - II).
6.4
DGTD Registration

sector would continue

DGTD registration would continue to be available to
non-FERA and non-MRTP companies, in respect of proposals which
satisfy the criteria for DGTD registration.
6.5

Delicensing

The scheme of de-licensing has already been extended
to 94 bulk drugs including all anti-cancer drugs, all new bulk drugs
developed through indigenous research, and related formulations
as well as two drug intermediates. The scheme, would progressively
be extended subject to the following criteria:
(a)

bulk drugs whose imports are allowed on OGL.

(b)

bulk drugs, whose production is limited to three
producers or less in the organised sector.

(c)

bulk drugs whose formulations
and mass consumption'nature.

are

of

essential

formulations and drug intermediates related to
bulk drugs which are delicensed.
The scheme of delicensing would be available for nonFERA and non-MRTP companies only excepting for new drugs which
would be cleared for use in the country and would not include
bulk drugs reserved for public and small scale sector.
(d)

The capacities to be set up under the delicensing scheme
will, however, conform to the economic scales of production.
6.6.

Encouragement of new drugs

Introduction in the country of formulations based on
new bulk drugs require the approval of the Drug Controller (India).
In order to establish the safety and efficacy of the new drugs
proposed to be introduced detailed information has to be furnished.
This information amongst others, should include toxicity data on
animals, pharmacological studies and results of clinical trials in
Indian conditions, which may extend over several years. Once a firm
obtains the approval other firms are not required to obtain approval
in respect of that drug again. In order to encourage introduction of
new drugs in the country, all new bulk drugs and related formulations
would be brought under the scheme of de-licensing. If approval for
the introduction of the new drug is based on the clinical trials conduc­
ted by a MRTP or FERA company, such a company can also avail the
scheme of delicensing in respect of such new bulk drug and related
formulations. Exemption under Section 22A of the MRTP Act would also
be available in such cases.
10

Phased Manufacturing Programme
To encourage cost-effective indigenisation and to ensure
that bulk drug production does not remain confined to processing
of later intermediates only, it has been decided to introduce system
of a phased manufacturing programme (PMP). This will be applicable
to all manufacturers and to all types of industrial approvals (licence,
registration with the DGTD and registration under the Delicensing
Scheme).
Where the import content is 20% or' more of the value
of production, import licenses for bulk drug manufacturers would
be granted only in accordance with the approved PMP which would
specify the indigenisation to be achieved annually as a percentage
of the value of production. The viability of PMP would be examined
in terms of the domestic resources cost of production; with a suit­
able shadow rate of foreign exchange. All companies manufacturing
bulk drugs would be required to submit to the Department of Chemi­
cals and Petro-chemicals their PMP proposals and the existing com­
panies which import drug intermediates or other raw materials
from their principals or their associated companies would be required
to inform the Government of the details of such transactions within
a month of such import.
6.8
Broadbanding
6.7

In order to provide greater manufacturing flexibility.
broadbanding would be extended to the pharmaceutical industry,
taking into account the technical factors like plant design, process
and production facilities. To begin with 31 groups of bulk drugs
(Annexure III) would be covered by broadbanding. Products, other
than bulk drugs, would be broadbanded into the following categories:-

bulk

Annexure

(a)

Formulations
III.

(b)

Surgical ancillaries like sutures, catguts, bandages.

(c)

Seras and Vaccines.

(d)

Diagnostics of all types.

(e)

Allergins.

(f)

Transfusion

based

on

drugs

in

solutions

The facility of broad banding would be available only
in respect of products which are approved for use in the country
by the Drug Controller(India). For domestic production, companies
in the organised sector would be eligible for broad banding only
in respect of items open to them.
The procedure to be followed for this is as laid down
in the press note No.33 (1986 series) of the Department of Industrial
Development dt. 26.9.1986. The scheme of broad banding will also
be subject to the conbditione laid therein.
11

6,9

Export production

For export production, all companies would have total
flexibility to produce any product
with their existing facilities.
They
need only inform the Government of the details of such pro­
duction and export.
6.10

Revised Ratio

Parameters

In order to encourage higher production of bulk drugs
in the country, the ratio parameter between the ex-factory value
of bulk drug production to that of formulation has been revised.
The ratio parameter would be related to the size of a company,
which in turn has a relationship with its ability to invest in and
develop/procure technology for production of bulk drugs. For FERA
companies ratio parameter would now be 1:4. For other companies
the ratio parameters would be related to the ex-factory value of
production of bulk drugs and formulations as follows:

Ex-factory value of production
of bulk drugs and formulations

Ratio parameter

1.

Upto Rs.10 crores

1:10

2.

For production in excess of
Rs.10 crores and upto
Rs.25 Crores.

1:7

For production in excess of
Rs.25 crores.

1:5

3.

The following activities
in computing the ratio parameters:

would

continue

(a)

Drug Intermediates.

(b)
(c)

Empty hard gelating capsules
Surgical ancillaries

(d)

Seras and Vaccines

(e.)

Diagnostics of all types

(f)

Allergins

(8)

Transfusion solutions

to

be excluded

The companies in the organised sector are required
to submit a production programme, including the production of new
drugs, so that they can reach the new ratio parameters within
a period of 3 years. As and when a Company moved from one category
12

to another, it would be allowed a period of 3 years to reach the
new ratio parameter.
In order to encourage production of bulk drugs in the
country
the formulation turnover of all companies in the organised
sector would continue to be baged on a ratio of 2:1 between the
value of consumption of
indigenously produced bulk drugs and
that of imported bulk drugs.
6.11

Supply of Bulk Drug to Non-Asociated Formulators

FERA and MRTP companies would continue to supply
50% of the bulk drug production to non-associated formulators and
other companies, including public sector, 30% of the bulk drug
production to non-associated formulators.
6.12

RSD/Import of Know-how

R8D would gain an impetus from the various measures
proposed in the policy such as the extension
of delicensing to
companies which conduct clinical
trials and obtain the approval
of the Drug Controller (India) for introduction of new drugs. However,
wherever necessary,
import of know-how would continue to be
favourably considered on merits.
6,13
Regularisation of production
A very large number of formulations are being produced
ranging from one to two decades with industrial approvals which
are
being questioned. Majority of these drugs are claimed to be
covered
under registration certificates issued under Section 10
of the Industries (Development and Regulation) (IDR) Act. According
to the practice then in vogue, these registration certificates did
not mention individual items and capacities but merely permitted
production of "drugs and pharmaceuticals". Another major category
comprises of items claimed to be covered under notification issued
in the 1960s and 1970s, under Section 298 of the IDR Act, announcing
exemption from industrial licensing, subject to some conditions.
However, COB licences could not be issud in many cases because
of non-fulfilment of one or more of the conditions subject to which
the exemptions were granted. Having regard to the fact that the
infraction in most cases are technical and that the products have
been accepted by the medical profession. Government have decided
to regularise the production of all such formulations and surgical
aids.
6.14

Re-endorsement of capacity

Government's industrial policies in regard to re-endorsement of capacity, and recognition of additional capacities as a result
of replacement/modernisation/ renovation of equipment, as announced

13

from time to time, would be applicable to the pharmaceutical industry.

7.1

PART VII - DUTY RATIONALISATION

The measures in the areas of licensing and pricing poli­
cies would also be complemented by appropriate fiscal policy mea­
sures designed to progressively reduce import and excise duties
to the minimum possible levels and to ensure that the cumuilative
incidence of duty on the bulk drugs is higher than that on the
inputs and drug
intermediates . Duty rationalisation is intended
to encourage cost efficient production of bulk drugs and of high
quality formulations.
PART VII -CO-ORDINATION BETWEEN HEALTH
AND INDUSTRY MINISTRIES.
8.1
With a view to achieve better integration between the
Health policies and the industrial policies in the Pharmaceutical
sector, an inter-ministerial Standing Committee would be constituted
in the Ministry of Industry Department of Chemicals and Petrochemicals
with Secretary, Ministry of Health and officials of the other Depart­
ments and agencies concerned as members. In the first instance,
the Committee would oversee the implementation of the new measures
and other related decisions such as revision of the National For­
mulary, stregthening of the institutional and statutory arrangements
for enforcing quality control, dissemination of information regarding
safety and efficacy of drugs to medical and paramedical personnel,
centralisation of drug registration, rationalisation of formulations
and monitoring of adverse reactions.
PART

IX

- REVIEW

9.1
The implementation and parameters of these measures
would be reviewed at the end of the 7th Five Year Plan. Appraisal
at short intervals will also be made to ascertain the progress of
implementation and the trends emerging from time to time.

14

(ANNEXURE I)
(See para 6.1)

APPENDIX - I

Industry Policy-Government Decision Press Note dated 2nd Dec., 1973.

XXXXXXX

14.

X

X

Drugs 6 Pharmaceuticals
For FERA Drug Companies

Following bulk drugs
subject to a phased manufacture
programme, and formulations based
thereon with an overall ratio
of bulk drug consumption (from own manufacture) to formulations
from all sources of 1:4.
(1)
Rifampicin
(2)
Verapamil
(3)
Cephalexin
(4)
Pantothenate
(5)
Bacitracin
(6)
Neomycin
(7)
Cephaloridine
(8)
Alkaloids of Ergot
(9)
Thiopentone
(10)
Propoxyphenazone
(11)
Pyrantal Pamoate
(12)
Norethisterone
(13)
Oxethazine
(14)
Pentazocine
(15)
Norgestral
(16)
Dipyridemol
(17)
Tolnaftate
(18)
Triprolidine
(19)
Naproxen
(20)
Nalidixic Acid
(21)
Chlorpromazine
(22)
Chlorpheniramine
(23)
Betamethazone
(24)
Dexamethazone
(25)
Chloramphenicol
(26)
Vitamic A
(27)
Digoxin
(28)
Dapsone
(29)
Allopurinol
(30)
Vitamin B12
(31)
Prednizolone

15

(32)
(33)
(34)
(35)
(36)
(37)
(38)
(39)
(40)
(41)
(42)
(43)
(44)
(45)

Baralgan Ketone
Isulin
Primaquine
Amodiaquine
Succinyl Cholinechloride
Clofazamine
Thiabendazole
Tetramisole
Framycetin
Cyclophosphamide
Mepacrine
Triamcinolone
Phenuylephrine
Oxytecin

(46)
(47)
(48)
(49)
(50)
(51)
(52)
(53)
(54)
(55)
(56)
(57)
(58)
(59)
(60)
(61)
(62)
(63)
(64)

Vitamin P( Rutin)
Prenylamine Lacate
Thioridazine
Phenolthiazine
Penicillins
Mianserin Hydrochloride
Aminoglutethimid
Cinnarizine
Becampicillin
Captopril
Prazinuantel
Tobramycin
Timolol
Cafazoline sodium
Atenolol
Nimustine
Prithyldone
Isosorbidemonoitrate
Any new drug for which
the company conducted clinical
trials and obtained
Drug Controller's
approval.
Polio Vaccine
Measles Vaccine

(65)
(66)

For non-FERA MRTP companies the existing definition
i.e. all bulk drugs and formulations subject' to
would continue
the ratio parameters applicable on the basis of turnover and subject
to reservation for the public and small scale sectors.

16

(ANNEXURE - II)
(See para 6.3.)

LIST OF BULK DRUGS RESRVED FOR PUBLIC SECTOR

(1)
(2)
(3)
(4)
(5)
(6)
(7)
(8)
(9)
(10)
(11)
(12)
(13)
(14)
(15)

Streptomycin
Tetracycline
Oxytetracycline
Gentamycin
Sulphaguanidine
Sulphadimidine
Sulphamethoxy-pyridazine
Sulphadimethoxine
Vitamin Bl
Vitamin B2
Folic Acid
Quinine
Analgin
Phenobarbitone
Morphine

N.B.Bulk drugs would
vatives, if any.

include

17

salts,

esters

and

deri­

(ANNEXURE - III)

(See para 6.8)

GROUP OF BULK DRUGS COVERED BY BROAD-RANGING
GROUPS
1.
(2)
(3)

(4)
(5)
(6)
(7)

(8)

All types of Penicillins
Erythromycin, Griseofulvin, Rifampicin
Chloramphenicol and
its intermediates namely
L-Base.
6-APA and 7-ADCA from Potassium Pencillin G
Semi-synthetic Penicillins like Ampicillin, Amoxi­
cillin etc.
All types of Cephalsporins
Sulpha Drugs other than those reserved for
Public Sector
Steroids 8 Hormones including the following
Prednisolone,
Prednisone,
Hydrocortisone, Beta­
methasone,
Ethinyl
Oestradiol,
Norethisterone,
Norgestrel, Testosterone, Progesterons etc.

(9)
(10)
(11)
(12)

(13)
(14)
r

(15)

(16)
(17)

(18)

(19)
(20)
(21)

Theophylline, Aminophylline, Hydroxyethyl-Theophylline Xanthinol Nicotinate and Synthetic Caffeine
All Barbiturates other than Phenobabarbitone
Analgin , Isopropylantipyrine
Chlorpromazine
Prochloroperazine
Promethazine
Trifluoperazine
Triflupromazine
Chloroquine
Amodiaquine
Oxphenbutazone
Phenylbutazone
Diphenydramine
Bromodiphenhydramine
Hydrocholorothiazide
Cyclopentazide
Chlorophenesin
Mephenesin
Xylocaine
Procaine
Benzocaine
Prilocaine
Metronidazole
Tinidazole
Tobutamide
Chlorpramamide
Acetazolamide
Thiacetazone
18

(22)

(23)
(24)

(25)

(26)

(27)

(28)

(29)

(30)

(31)

N.B.

Diazepam
Chlordiazepoxide
Oxazepam
Nitrazepam
Lorazepam
Pheniramide
Chlorpheniramine
Ibuprofen
Ketoprofen
Flurbiprofen
Naproxen
Salbutamol
Terbutaline
Furazolidine
Nitrofuratoin
Nitrofurazone
Furaltadone
Chlorcyclizine
Cyclizine
Meclozine
Buclizine
Diethyl Carbarn Zine Citrate
Propranolol
Atenolol
Metroprolol
Oxprerolol
Pindolol
Mebendazole
Thiabendazole
Benbendazole
Drubs obtained by extraction from plant material
such
as
Belladonna,
Hyocymine,
Sennosides,
Digoxin,
Ammalicine,
Pesperpine,
Vincristine,
Vinblastine, Quinine, Quinidine, Emetine, Strychnine,
Brucine etc.
Drugs of animal origin other than Insulin , such
as Liver extract. Heparin, Pancreatin, Immunoglo­
bulin etc.

Bulk drugs would Include salts, esters and deri­
vatives if any.

19
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