In November 2013, the Indian Pharmaceutical Alliance (IPA) queried 13 drug makers about their pending applications to market new generics. "About 30 per cent of the applications had been stuck for over six months," says D.G. Shah, Secretary-General, IPA. "The industry suffers because, in a price regulated market like ours, it is new products that drive growth. People are also deprived of access to new medicines and the benefits of competition, because of such delays."

While the incident includes only a small sample of drug makers, it still indicates the challenges that pharmaceutical companies face in India. Every aspect of the pharmaceutical industry's dealings with its central regulator, the Central Drugs Standard Control Organisation (CDSCO), a division of the Ministry of Health and Family Welfare, headed by the Drug Controller General of India (DCGI), is mired in delays.

To worsen matters, companies often need sanctions from state level drug regulators as well, whose procedures are just as dilatory. "The complete approval process to merely expand production by adding a contract manufacturing facility takes between six to nine months and calls for much shuttling back and forth between the Centre and the concerned state regulator," says the founder of a leading pharmaceutical company.

The head of another pharmaceutical company maintains the entire regulatory environment is discouraging. "A small clearance takes months unless you pay money," he says. "A bio-study clearance takes time while a clinical trial clearance takes a lot of time. For a new drug, we are asked all kinds of irrelevant questions. At both the central and state levels, there is a cadre of clerks always on the lookout for ways to make money." Neither wants to be identified as both their companies await approvals.

Procedural delays is not the only challenge. There are problems also with rules enforcement and skill development to ensure quality. Many rules are also cumbersome. "Even to import a reference product you need a drug licence and a test licence," says the second pharma industry leader. "When something is not for human consumption, why is a test licence required?" He notes that pharma executives often simply carry a sample in their pockets while returning from abroad to dodge this problem.

The DCGI, G.N. Singh, does not deny the need for improvement in his department's functioning, but insists a change process has been set in motion. "Applications used to take three months to one year earlier for approval, but we have reduced the period considerably," he told Business Today during a recent visit to Hyderabad. "This includes the permission for clinical trials. We now have a robust system in place and we welcome anyone who wants to conduct clinical trials. He can get permission within one month, subject to the stipulated parameters." On the delays pointed out by the IPA, he says: "If there is a query [which is not replied to satisfactorily] or if someone is not meeting requirements, approvals can take more than six months. They may take six years or even 10."

To speed up approvals and weed out corruption, Singh is keen to make the process digital. "Everything should be online," he says. "If you want a licence, why should you come to me? You should apply online, adhere to the prescribed guidelines and get it in a time-bound period. We started efforts in this direction about two months ago and we are monitoring how it is going." Chirantan Chatterjee, who teaches Corporate Strategy and Policy at IIM, Bangalore, suggests such transparency should also extend to the drug approval committees. "There should be disclosure of any conflict of interest on the part of members," he says. "I know a couple of doctors on CDSCO committees who are also on the rolls of multinational companies whose drugs the CDSCO has to approve. Where then is the sanctity of the process?"

But even the inordinate time currently taken does not guarantee the quality of drugs in the market. In November last year, 11 women died at a sterilization camp in Bilaspur, Chhattisgarh, allegedly because the post-operative drugs they were given had rat poison mixed with them. The incident made international headlines, but many others of smaller magnitude, which put a question mark on the quality of drugs sold in India, do not. IIM-B's Chatterjee recalls a recent incident when his son had viral fever. "I gave him paracetamol but the medicine did him no good. But when I switched to another brand, he improved," he says.

Greater accountability is essential. "We need a system that ensures there is traceability and visibility of the supply chain of every pharmaceutical product from the active ingredient stage till it reaches the patient," says Tobby Simon, Founder and President, Synergia Foundation, a Bangalore-based applied research think tank. "The pedigree of the chain should also be impeccable. This just does not exist today." Dinesh Thakur, the former Ranbaxy executive who blew the whistle on some of its practices, notes that even some concepts are not clear. "We don't even agree on the definition of an adulterated drug," he says. "We have something called 'spurious drugs' defined in the rules, but that is not comprehensive."

DCGI Singh sees a solution in strengthening the law with adequate deterrents. "We need severe penalty clauses," he says. "They will be in place once the Drugs and Cosmetics Act, 1940, is amended. Penalties will be so severe that erring drug makers will go out of business." Chatterjee agrees on the need to make the law more stringent. "We should also involve citizens, using social media to report on drug quality," he adds.

But be it quick disposal of applications to regular monitoring the quality of drugs sold by pharmacists, all require resources, especially increased and trained manpower. "The CDSCO is under-resourced in every way," says another pharma company head. Today, there are just around 1,500 drug inspectors in the country, many of them with inadequate training. "Exposure of the officers to current issues and practices is very important," says Vasanthi Srinivasan, who teaches Organisational Behaviour and Human Resource Management at IIM, Bangalore. "My assessment is there is very little in-service professional development of these people."

The situation, however, is changing for the better in some states. In Gujarat, for instance, inspectors are getting trained by a US-based organisation in similar skills as imparted to USFDA inspectors and drug makers receive information about regulatory approvals by text messages.

DCGI Singh also insists great change is in the offing. "The government is going to invest about Rs 1,800 crore in drug regulation in the next three years," he says. "Around Rs 850 crore will be spent on regulatory structures in the states and the rest on the central regulator. We will use the money for capacity building, opening new offices across the country and upgrading existing facilities. The number of regulatory personnel will rise dramatically. We will double it in the next two years and keep doubling every three years. Given the size of the country, we need at least 10,000 to 12,000 people." The DCGI currently has six zonal offices apart from its headquarters in New Delhi.

Better training too will follow. "We have been doing it already for the past year," says Singh. "We just finished training analysts from 28 states who work in drug testing laboratories." His dream is to set up a university for regulatory affairs and patient safety. "I'm going to propose this to the government," he says. "India is already known as the pharmacy of the world. But we need to train people and keep improving their skills continuously. I got the idea when I saw the Forensic Sciences University at Gandhinagar which I visited for the Vibrant Gujarat summit. In due course, we can have a separate cadre of regulators, like the IAS and the IPS, and keep continuously upgrading its skills."

There is also need to clearly demarcate the roles of the central and state drug controllers. "Regulatory approval should be with the Centre, while the state regulators should focus on vigilance and enforcing good manufacturing practices," says a pharma company chief. IPA's Shah says the alliance submitted a host of suggestions to the DCGI last December on how to revamp the system. He sees some of them getting implemented and hopes others will follow. He believes the DCGI also needs to be further empowered - alongside increasing its accountability. "We need to ensure a system where the DCGI has more teeth, is not just dependent on the health ministry and is made more accountable," he adds.