India is the third largest producer of drugs in the world in terms of volume. However, while India has emerged as a key pharmaceutical player globally over the years, it continues to grapple with systemic challenges. Studies show that about 20 percent of drugs produced in India are counterfeit. This alarming statistic poses a threat to the population in India as well as overseas, as India remains a major exporter of drugs all over the world. As such, this articles seeks to assess the current challenges and solutions associated with the production and distribution of counterfeit drugs in India.
What Are Counterfeit Drugs?
According to the World Health Organisation (WHO):
‘Counterfeit medicine is one which is deliberately and fraudulently mislabelled with respect to identity and/or source. Counterfeiting can apply to both branded and generic products and counterfeiting products may include products with correct ingredients or with the wrong ingredients, without active ingredients, with insufficient active ingredients or with fake packaging.’
The Drugs and Cosmetics Act (1940) has tried to articulate this in the Indian context. It defines misbranded, adulterated, and spurious drugs. For the purpose of this article, drugs include both generic and branded drugs.
History and the Evolution of Laws
The pharmaceutical industry in its present form has been present in India for several decades, and it has especially taken off in recent years. Even in ancient India, the Vedas talk about the use of certain plants and herbs as medicine. India has traditionally subscribed to the systems of Ayurveda, Siddhi, and Unani before the arrival of the British in India in the 18th century. However, the British brought the western medicine system with them as well.
The British established the Indian Medical Service, which was mostly military, but turned out to be a stepping stone for modern medicine in India. The British also published certain pharmacopoeia, which is a list of medicines and the directions to use them. During this stage, as India could not produce adequate drugs, it had to depend mainly on imports. In the 1870s, colleges started a chemist and druggists’ course, and the graduates of this later formed the Pharmaceutical Society of India, which was later disbanded in 1949. However, the job and qualifications were still not defined appropriately. 
As modern medicines gained more popularity and Allopathy became a common medical system that people referred to, pharmaceutical industries began to be set up on a large scale. The pharma industry that was present after the Independence of India was under developed and was valued at about ₹ 100 million only, and it was the concerted efforts of the government and the pharmaceutical companies that made it what it is today.
The need for regulation came about after the Giant Quinine Fraud. It was the first large scale counterfeiting of drugs that happened in India. Patients who were diagnosed with malaria were advised to take quinine, but the disease failed to die down even after proper administration of the drug. Quinine, being a valuable medicine, faced stiff competition between companies. Both, private and public sector companies used substitutes for Quinine in order to gain higher profits. However, the substitute proved to have several side effects, some fatal.
In response to this, A Drugs Enquiry Committee was set up under Prof. R.N. Chopra that reported that almost all the drugs produced in India were considerably adulterated. The report, however, did not get to make any real impact at the time. However, eventually, the Drugs and Cosmetics Act of 1940 was passed in the Indian parliament.
The Drugs and Cosmetics Act, 1940
The Drugs and Cosmetics Act, 1940 was passed keeping in mind the recommendations made by the R N Chopra Committee. The purpose of the act is to regulate the import, manufacture, distribution, and sale of drugs. It aims to prevent substandard drugs, presumably for maintaining high standards of medical treatment. That would certainly be defeated if the necessary concomitants of medical and surgical treatment were allowed to be diluted, the very same evil which the Act intends to eradicate would continue to subsist.
The Act lays out 3 kinds of counterfeit drugs or drugs that do not meet the standards of quality. These are misbranded, adulterated and spurious drugs. Their definition, as given in the Act are as follows:
‘A drug shall be deemed to be misbranded if (a) if it is so coloured, coated, powdered or polished that damage is concealed or if it is made to appear of better or greater therapeutic value than it really is; or (b) if it is not labelled in the prescribed manner; or (c) if its label or container or anything accompanying the drug bears any statement, design or device which makes any false claim for the drug or which is false or misleading in any particular.’
‘A drug shall be deemed to be adulterated if (a) if it consists, in whole or in part, of any filthy, putrid or decomposed substance; or (b) if it has been prepared, packed or stored under insanitary conditions whereby it may have been contaminated with filth or whereby it may have been rendered injurious to health; or substance which may render the contents injurious to health; or (d) if it bears or contains, for purposes of colouring only, a colour other than one which is prescribed; or (e) if it contains any harmful or toxic substance which may render it injurious to health; or (f) if any substance has been mixed therewith so as to reduce its quality or strength.’
‘A drug may be deemed to be spurious if (a) if it is imported under a name which belongs to another drug; or (b) if it is an imitation of, or is a substitute for, another drug or resembles another drug in a manner likely to deceive or bears upon it or upon its label or container the name of another drug unless it is plainly and conspicuously marked so as to reveal its true character and its lack of identity with such other drug; or (c) if the label or container bears the name of an individual or company purporting to be the manufacturer of the drug, which individual or company is fictitious or does not exist; or (d) if it has been substituted wholly or in part by another drug or substance; or (e) if it purports to be the product of a manufacturer of whom it is not truly a product.’
The definition given in the Act includes all the main forms of counterfeiting that may happen with the production or the manufacturing of the drug. The Act prohibits the import, manufacture, distribution, and sale of such drugs that do not meet the quality standards, and in the event that this happens, the drug may be confiscated. The manufacture of such a drug would amount to a fine and imprisonment for no less than 10 years and up to life imprisonment in extreme cases.
The Act also calls for a government analyst who may check the standard of the drugs. Certain offences under the Act are compoundable and the case can only be tried by a First-Class Metropolitan Magistrate. It also calls for setting up the Drugs Technical Advisory Board, The Central Drugs Laboratory, and the Drugs Consultative Authority.
The Central Drugs Standard Control Organisation (CDSCO) has been set up under the Act and has regulatory control over the import of drugs, approval of new drugs and clinical trials, meetings of Drugs Consultative Committee (DCC), and Drugs Technical Advisory Board (DTAB), approval of certain licenses as Central License Approving Authority is exercised by the CDSCO headquarters.
The Current Scenario
In the 2019-20 financial year, the Indian pharmaceuticals industry was valued at US$ 20.70 billion. It accounts for about 50 percent of the demand for vaccines and generic medicines around the world. According to reports, approximately 20 percent of the drugs produced in India are counterfeit. The Indian government, however, rejects this claims, and pegs it at 10 percent. While there is lack of clarity on the precise figure, it is impossible to rule out the grave possibility of counterfeit drugs in our country. The drugs that have been produced by many pharmaceutical giants of India have been under the heat for selling drugs that do not meet quality standards. Moreover, the online sale of drugs has made the sale of counterfeit drugs even harder to control.
India, which is often called the ‘Pharmacy of the World’, accounts for the majority of the drugs produced in the world. In the present global crisis, the world still looks up to India to meet the production needs of the Covid-19 vaccine so that the world can return to normalcy again. With such a huge responsibility resting on its shoulders, counterfeit or substandard drugs are the last things that we can afford. We need to make sure that the import, manufacture, distribution, and sale of drugs meet the quality standards set by the law. This requires effective implementation and interest on the part of the ruling government. Stricter regulations need to be made on online sale of drugs and quality checks need to be done more strictly and comprehensively.
- Chimanlal Jagjivandas Sheth v. State of Maharashtra, AIR 1963 SC 665.
- Department of Essential Drugs and Other Medicines, World Health Organisation, 1999, Counterfeit Drugs: Guidelines for the development of measures to combat counterfeit drugs.
- Harikishan Singh, 2016, India’s Medico- Pharmaceutical Inheritance from Colonial Period, Pharmacy in History 56, 90-95.
- India Brand Equity Foundation, Indian Pharmaceutical Industry, 2020, https://www.ibef.org/industry/pharmaceutical-india.aspx (accessed on 29-07-2020, 8:00 pm).
- Kiran Kabbta Somvanshi, 2019, The Economic Times, Substandard drugs are a bigger problem for India than fakes, https://economictimes.indiatimes.com/industry/healthcare/biotech/pharmaceuticals/substandard-drugs-are-a-bigger-problem-for-india-than-fakes/articleshow/69137983.cms?from=mdr (accessed on 30-07-2020, 9:00 pm).
- Patricia Barton, 2006, The Great Quinine Fraud: Legality Issues in the “Non- Narcotic” Drug Trade in British India, Social History of Drugs and Alcohol, 22, 6-25.
- The Drugs and Cosmetics Act, 1940, Act No. 23 of 1940.
 Department of Essential Drugs and Other Medicines, World Health Organisation, 1999, Counterfeit Drugs: Guidelines for the development of measures to combat counterfeit drugs.
 Harikishan Singh, India’s Medico- Pharmaceutical Inheritance from Colonial Period, Pharmacy in History 56, 90-95 (2016)
 Patricia Barton, “The Great Quinine Fraud”: Legality Issues in the “Non- Narcotic” Drug Trade in British India, 1 Social History of Drugs and Alcohol 22, 6-25 (2006)
 The Drugs and Cosmetics Act, 1940, Act No. 23 of 1940 (1940)
 The Drugs and Cosmetics Act, 1940 hereinafter referred to as The Act
 Chimanlal Jagjivandas Sheth v. State of Maharashtra, AIR 1963 SC 665.
 The Drugs and Cosmetics Act, 1940, §9
 The Drugs and Cosmetics Act, 1940, §10
 The Drugs and Cosmetics Act, 1940, §11
 India Brand Equity Foundation, Indian Pharmaceutical Industry, June 2020, https://www.ibef.org/industry/pharmaceutical-india.aspx ( accessed on 29-07-2020, 8:00 pm)
 Kiran Kabbta Somvanshi, The Economic Times, Substandard Drugs are a bigger problem for India than fakes, May 02 2019, https://economictimes.indiatimes.com/industry/healthcare/biotech/pharmaceuticals/substandard-drugs-are-a-bigger-problem-for-india-than-fakes/articleshow/69137983.cms?from=mdr (accessed on 30-07-2020, 9:00 pm)