India: Food & Pharma Flash - March 2014

Last year, Pharma sector witnessed major positive developments on the regulatory front. Where on one hand big players like Ranbaxy came under scanner for allegations owing to sale of fake drugs or USFDA's ban on Sun Pharma's drugs, on the other hand, proposal for introducing FDI cap in the sector was rejected and a conditional ban on non-compete clauses was introduced. Further, the courts directed the government to improve the procedure for conducting clinical trials in India. It's interesting and a positive sign to know that ever since the clinical trials have come under the scanner of courts, the regulatory agencies of the sector have intensified the monitoring of the clinical trials and the government too has set up Apex Committee and Technical Committee to supervise the clinical trials. The Department of Health Research has recently signed an MoU with the National Institute of Health and Clinical Education to draw a framework for healthcare policy making and facilitating and encouraging innovations into public health service. Efforts are being done at ministerial level to fix price of patented drugs. In fact, very recently Medical Council of India had also asked the doctors to prescribe drugs with generic names so as to minimize usage of drugs of very high end brands. Below is a round up of these news pieces which made rounds last year.

1. Revised FDI policy in pharma

Cabinet Committee on Economic Affairs had decided in November 2013 and conveyed its decision to the Department of Industrial Policy and Promotion ("DIPP") regarding the changes in the FDI policy in pharmaceutical sector. The announcements to continue with the same FDI limits were taken earlier this year. The current position is that 100% FDI is allowed in both Greenfield (new) Brownfield (existing) segments and the investments under the Brownfield is subject to approval by the Foreign Investment Promotion Board ("FIPB"). However, DIPP has said that a "non-compete clause" will not be allowed except in special cases and that too with the prior approval of FIPB.

PSA view -Though Health and Commerce Ministry had suggested to lower the FDI cap but Cabinet Committee decided not to do that but in order to give some respite to the local players they have suggested the "non-compete clause" deletion. Now the sellers will not have to agree regarding not competing with the buyers and in launching of similar products in the same or relevant markets. This can allow the local players to start afresh in the same segment, in the same market and hire its old employees from the entity it has just sold.

2. Supreme Court guides the government on DPCO and Clinical Trials

A bench headed by Justice G S Singhvi said that the central government is being guided by market-driven forces and the current DPCO would encourage profiteering of medicine brands prescribed by doctors. The court was hearing a PIL filed by NGO, All India Drug Action Network, which contended that market based pricing is never used for any price regulatory purposes and under the new policy simple average ceiling prices are in many cases higher than the market leader price.

In another PIL filed by an NGO, Swasthya Adhikar Manch in February 2012, Supreme Court got all geared up to guide the central government for ensuring a proper mechanism on clinical trials. A bench headed by Justice R.M. Lodha made observations on the conducting of clinical trials.

PSA view -These observations by the Supreme Court suggests the apathy of the government and government agencies in firstly providing for a regulatory mechanism and secondly, wherever there is a mechanism, to enforce strictly such a mechanism to bring about the desired result for which the mechanism was set up. A lot needs to be done to ensure safe and cost effective essential drugs to the common citizen and to ensure that clinical trials are conducted by the rule book in India and subjects are appropriately taken care of or compensated.

3. Clinical trials in India: new statistics, new regulations

Ever since the clinical trials have come under the scanner of the Supreme Court of India ("SC") following its order on January 3, 2013, the regulatory agencies, the Drug Controller General of India ("DCGI") and the CDSCO have intensified the monitoring of the clinical trials and the government had also set up Apex Committee and Technical Committee to supervise the clinical trials. In the last few years, they have issued notices in 235 cases and inspected 577 clinical trial sites. Increased proactive steps and new guidelines have resulted in a sharp decline in the number of clinical trial approvals. Till the end of August this year, the DCGI has given permission to only 162 clinical trial applications.

The government had also constituted 12 New Drugs Advisory Committees ("NDACs"). The NDACs met 78 times and evaluated 1,122 applications for approval of clinical trials, new drugs and fixed dose combinations. Among these applications, 331 were related to approval of Global Clinical Trial ("GCT"), which included clinical trials of new chemical entities and NDACs have recommended for approval of 285 applications. For 46 applications, no recommendation have been made. Out of the above 285 applications, DCGI has given approval to conduct clinical trials in 162 cases.

As per the directions by the SC to consider the views of all the states, a meeting of the Chief Secretaries, Health Secretaries of the State Governments and the Administrators of the Union Territories was convened by the Union Health Ministry. With a view to further streamlining clinical trials and minimizing the irregularities in the sector, some states have suggested restricting the trials only to the government-run hospitals in the country.

Keen on improving the current scenario, government has proposed a new Drugs and Cosmetic (Amendment) Bill, 2013, now under the scrutiny of the Parliamentary panel. The idea is to have a separate chapter on clinical trials and put all the existing guidelines and instructions from the DCGI under the framework of law. It has comprehensive provisions to monitor the trials and also deciding compensations to the victims. Further, an expert panel has been appointed under Prof Ranjit Roy Chaudhury, which recommended several changes including creation of a Central Accreditation Council to oversee the accreditation of institutes, clinical investigators and institute ethics committees for clinical trials in the country. It also suggested that trials should be carried out only at centers which have accreditation.

PSA view -India needs a robust system for conducting clinical trials and to ensure that trials are conducted in a scientific and ethical manner and in compliance to the regulatory provisions. There have been allegations that the approvals to the clinical trials are coming hard and slow after the SC order thereby impacting the overall performance of the clinical trials sector. This sector has great potential to grow but the slew of legislations and guidelines has already stopped several CROs to suspend trials here. As the government is aware of the implications from investments perspectives, it has started taking proactive measures to streamline the sector and gain back the confidence of the foreign players in the market, while also keeping the concerns and safety of subjects involved in the overall process.

4. Ministry issues formula to determine quantum of compensation in deaths occurring during clinical trials

The proposed formula will prove to be a great aid in computing the quantum of compensation in the cases of SAEs of deaths occurring during clinical trials. The criteria on which it is based includes the age of the subject and the risk factor depending on the seriousness and severity of the disease, presence of co-morbidity and duration of disease of the subject at the time of enrolment in the clinical trial. As per the new formula, the compensation amount will vary from Rs. 4 lakhs - Rs. 73.60 lakhs depending on the age of the deceased and the risk factor. However, in case of patients whose expected mortality is 90% or more within 30 days, a fixed amount of Rs. 2 lakhs would be given. The expert committee has also said that the trials can only be carried out in accredited centers and the principal investigator and ethics committee of the institute where the trial is being done, should also be accredited. During the deliberations, the expert committee felt that the criteria used to determine the quantum of compensation should not be discriminative in nature due to socio-economic conditions like income and education, and it should not discriminate gender/sex. The criteria should not be such which may have minimal impact but may create large variability and the formula should be such that the inter group variability of compensation value so arrived at, has little scope of discretion, thus avoid possible bias.

PSA view -It is an appreciable development that the formula has finally been created and introduced in public domain. It would be good to see that at implementation stage the formula is applied without any bias and no discrimination is caused owing to factors such as income, sex, gender etc. Secondly, the payment of compensation should be done in a timely manner, otherwise this practice of creating the formula will be rendered futile.

5. Department of Health Research signs MoU with NIHCE

The MoU between Department of Health Research and National Institute for Health and Care Excellence, UK ("NIHCE") provides the framework for strategic and technical cooperation between the two countries with an aim to (i) bring modern health technology to people by encouraging innovations; (ii) translate these innovations into products/processes by facilitating evaluation; (iii) introduce the aforesaid innovations into public health service. The two countries will also exchange institutional expertise and experience on clinical trial guidelines, quality standards, application of health technology assessment and implementation of the decisions of the assessment into clinical policy and practice. They will also explore the opportunities for collaborative research projects in clinical policy and practice.

PSA view -This is a good collaborative step towards healthcare policy making and facilitating innovations. This strategic and technical collaboration will benefit the Indian healthcare system to a greater extent.

6. DoP's constant efforts to fix patent drugs' prices

Even after facing utter failure in fixing the prices of patented drugs in the country DoP is back in action, this time with an inter-ministerial committee of joint secretaries of different ministries to look into the issues and suggest ways and means to fix the prices of patented drugs. The inter-ministerial committee has been constituted in light of the diverse opinion of different stakeholders received on DoP's earlier report on patented drugs. In its past report on the issue, DoP committee had recommended a formula on price negotiation of patented drugs, linking it to the per capita income in the country and had also suggested that the price of patented drugs should be frozen before the drugs are marketed.

PSA view -A patient's interest can be protected in a better manner if the rates of drugs is well regulated. Recently MCI had also asked the doctors to prescribe drugs with generic names so as to minimize usage of drugs of very high end brands. It is praiseworthy that DoP has not left the matter in lurch and is doing constant efforts to fix the prices of patented drugs. Once the move is successful, it is surely going to benefit the customers who sometimes end up spending more than their spending capacity on drugs alone. Secondly, once the rates are regulated, the drugs makers will not be able to exploit the market with their patented drugs.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.