India’s Pharma Traceability Hits Another Roadblock

In a blow to India's pharmaceutical export ambitions, implementation of the country’s planned track and trace (T&T) system has hit another roadblock, with the Directorate General of Foreign Trade (DGFT) announcing a one-year extension that pushes the deadline to February 2025. This delay follows a previous setback in August 2023.

India's pharmaceutical industry is vital to global healthcare as it is the largest supplier of low-cost generics, vaccines, and affordable HIV medicines, as well as third largest in terms of volume, and 14th in terms of value. Its aspiration, however, is to become the world's number one supplier of drugs by 2030, increasing its revenue to $130 billion, from the current $50 billion.

India has a well-established domestic manufacturing base, a low-cost but skilled workforce, and a growing research and development ecosystem. The Indian pharma industry is therefore well-placed to play a more prominent role in global drug security.

Despite this vital role, the industry grapples with various challenges in a multifaceted landscape where health and commerce intersect. Such challenges include counterfeiting, pricing sensitivity, and a complex global supply chain.

The quality of India’s pharma products has also lately been put into question as a result of several incidents involving substandard drugs.

In early 2023, at least 19 children in Uzbekistan and 70 in Gambia died after consuming cough syrup manufactured by Indian companies. Investigations revealed the presence of toxic substances in the syrup, highlighting potential lapses in quality control.

In addition, cases of fake active pharmaceutical ingredients (APIs) originating from India have surfaced in recent years, posing risks to the efficacy and safety of medications globally. Concerns have extended to the domestic market, with reports of counterfeit drugs circulating within India, raising questions about the integrity of the supply chain.

Then in December 2023, India’s Central Bureau of Investigation was ordered to probe allegations of substandard medicines supplied to Delhi government hospitals. While details regarding the specific nature of the medicines are still under investigation, the lack of a robust traceability system is a significant factor contributing to such issues.

India's practice of loan licensing and third-party manufacturing further compound these issues, as they raise concerns regarding accountability and quality control. Identifying responsible parties and enforcing oversight becomes challenging in such scenarios.

Domestic T&T moving forward… export stalling

To address these issues, India is currently rolling out mandatory QR codes on the 300 most essential pharma products sold in its domestic market. However, the T&T system planned for export products – which was due to be implemented at the same time as the domestic system – has been facing repeated challenges stemming from difficulties within the industry, according to the DGFT.

‘Technical obstacles and concerns regarding system readiness have contributed to this hurdle. The Pharmaceuticals Export Promotion Council of India has advocated for more time to ensure smoother implementation and address industry concerns. Many pharmaceutical exporters, particularly small and medium-sized enterprises, have been encountering challenges in integrating their operations with the T&T system,’ said a senior official at DGFT.

Industry stakeholders have responded to the extension of the deadline with a mix of relief and concern, in that it offers both opportunities and risks. While companies now have more time to invest in technology and infrastructure and to train staff, experts say continued delays could heighten scrutiny from international markets and impact India's standing as a reliable pharmaceutical exporter.

Domestic and export combined

The extended deadline has now raised the question of whether the T&T system should also cover products on the domestic market, in order to have one combined system. Again, there are arguments for and against such a move.

‘Extending the export deadline could also allow for the utilisation of the same technology and infrastructure for domestic and export tracking, potentially enhancing cost-effectiveness. However, concerns exist regarding public health risks associated with delaying domestic traceability measures, as this may prolong the circulation of counterfeit drugs in the domestic market,’ said Rajiv Singhal, General Secretary of the All India Organisation of Chemists and Druggists.

However, Manoj Kochar, President of the Authentication Solution Providers’ Association (ASPA), considers that the domestic market is already well-protected against counterfeits.

‘India has strong authentication ecosystems and Indian pharmaceutical brands actively employ various anti-counterfeiting measures. These measures include physical security features such as tamper-evident packaging, holograms, security inks, and destructible labels. The industry also uses digital technologies, including unique serial numbers, barcodes, and QR codes, SMS-based authentication, and mobile authentication apps’, he said.

Despite the delay, the T&T system remains highly pertinent for several reasons, ranging from global pressure and patient safety to trade facilitation. Counterfeiting within the pharma sector is a significant global issue, with many countries mandating similar T&T systems. Therefore, India, as a major global player in this sector, cannot afford to delay much longer.