Drug Makers’ Laws – Statutory Compliances For Pharmaceuticals

April 26, 2019

Being a chemical-based, life science and life-saving industry, the pharma industry is regulated and monitored strictly by many rules and compliances. Statutory compliances for pharma companies is compulsory and non-negotiable. Compliance laws for pharma companies are quite stringent and Indian pharma regulations violations are viewed very seriously. TalentPro’s statutory compliances solutions are your insurance against any problems arising out of non-compliance

India’s pharmaceutical manufacturing journey started even before we attained our independence. Bengal Chemical and Pharmaceutical Works Limited, later renamed as BCPL, was India’s first pharmaceutical company which was started in 1901. Growing at a rapid pace, the Indian pharmaceutical market size grew to over 1,29,000 crores in 2018. Indian pharmaceutical supply is nearly 20% of the global supply volume.

Currently, there are over 3000 pharma companies and over 10,000 manufacturing units across India.

Active Pharmaceutical Ingredients / Bulk Drugs

Branded Drugs / Generic Drugs


Chronic / Acute

The sub-divisions of Indian pharma market are:

Some of the most important laws in the pharmaceutical industry or pharmaceutical acts in chronological order are:

Pharmacy Act, 1948 lays down rules for the pharmacy education and profession in India. A registered pharmacist may lose his / her license and face legal action in the event of a proven offense.

Drugs and Cosmetics Act, 1940 details the rules and regulations pertaining to the manufacture, sale, distribution, and import of drugs, cosmetics, and specific medical equipment. This Act also sets our rules and regulations for storage, display, and prescriptions of drugs.

The Drugs & Magic Remedies (Objectionable Advertisements) Act, 1954 lays down rules regarding the advertisements of drugs about the disease or ailment diagnosis, cure, control, treatment, and prevention. It prohibits the declaring of any medication having any ‘magical’ remedial, healing or curative powers. There is a whole list of medical conditions or diseases for which this act is applicable.

Indian Patent Act, 1970 monitors and regulates the new patents for pharma processes and products. A patent is usually registered for 20 years in the name of an individual or organisation. There is a special rule which prevents ‘ever-greening’ wherein by making minor modifications of the original patented formula, the patent holder attempts to extend the patent period thereby leading to a sort of monopoly over a particular drug.

Research and Development Cess Act, 1986 stipulates that all imported technology, service or people resource attracts 5% tax under this Act.

Drugs Price Control Order, 1995 controls and regulates the pricing and prices of formulations and bulk drugs. Going further, this act also stipulates the profit margins of the manufacturers at which drugs have to be sold to the wholesalers and retailers within the pharma industry.

Trade Marks Act, 1999 governs the use of names, logos, and symbols for business identity and branding. A registered trademark gives an individual or company an exclusive right to manufacture and sell products under a particular brand name. If anyone else uses the name, logo or symbol, it is illegal, and action can be initiated. If an organisation or company is doing business under an unregistered trademark for many years and a new entity tries to use the same name or identity, it is considered as trying to ‘imitate’ or ‘pass off’ as the identity of the organisation that has already been doing business from before.

Information Technology Act, 2000 (IT Act) is empowered to act against any person or organisation who are negligent with security or while dealing with sensitive data which may cause an unlawful loss or gain to another person or organisation. The types of information and data covered under this act are all research-related information, manufacturing process or product information, medical history, records and information pertaining to the mental, physical or physiological health condition of patients.

Uniform Code for Pharmaceutical Marketing Practices 2014 (UCPMP) is a voluntary code of conduct issued by the Department of Pharmaceuticals pertaining to marketing practices of pharma companies and medical devices and equipment companies. This order particularly relates to doctors, chemists and druggists, and hospitals. One of the most critical points of this code is that manufacturers should not provide gifts in any form like cash, items, holiday trips, etc. to those who have the power to prescribe or sell medicines or drugs.

Apart from the above industry-specific rules and regulations, some of the generic compliances that apply to the pharma industry are:

Income Tax Act, 1961

Sales Tax / Value Added Tax (VAT)


Service Tax

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