India’s Pharmaceutical Traceability Hit Another Roadblock
In a blow to India's pharmaceutical export ambitions, implementing the Track & Trace (T&T) system has hit another roadblock. The Directorate General of Foreign Trade (DGFT) has announced a one-year extension, pushing the deadline to February 1st, 2025. This delay follows a previous setback in August 2023.
The system, proposed in 2011 and aimed at combating counterfeit drugs and improving transparency in drug exports and pharmaceutical supply chain, has been meeting repeated challenges stemming from difficulties within the industry and representation from industry leaders.
According to the DGFT, ‘technical obstacles and concerns regarding system readiness have contributed to this hurdle. The Pharmaceuticals Export Promotion Council of India (Pharmexcil) has advocated for more time to ensure smoother implementation and address industry concerns. Many pharmaceutical exporters, particularly small and medium-sized enterprises (SMEs), have encountered challenges integrating their operations with the T&T system.’
The T&T system mandates the recording and uploading crucial data, including the ‘parent-child’ relationship of drug packaging levels, onto a centralised portal. This data enables a drug's journey to be tracked from production to its final destination, facilitating the identification and prevention of counterfeit medicines.
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 pharmaceutical sector is a significant global issue, with many countries mandating similar T&T systems.
Industry experts claim that delaying India's adoption could disadvantage domestic exporters and impact the nation's international standing. Counterfeit drugs pose a grave threat to patient safety and public health. Implementing the T&T system is imperative to ensure the authenticity and quality of exported drugs, safeguarding the well-being of consumers. The streamlined tracking and monitoring facilitated by the T&T system have the potential to expedite customs clearance and enhance international trade efficiency for Indian pharmaceutical companies.
The potential extension of the T&T system for domestic purposes raises complex considerations, with arguments for and against such a move. Extending the export deadline also allows 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.
The decision to extend the domestic deadline depends on various stakeholders, including regulatory bodies, industry associations, and consumer groups, each weighing the trade-off between addressing industry concerns and protecting public health; experts believe that the stakeholders might ask for further extension.
Furthermore, India's delay in implementing domestic traceability systems could hinder efforts to align with international standards, potentially affecting investor confidence and export competitiveness.
However, Indian pharmaceutical brands actively employ various anti-counterfeiting measures despite delays in implementing the track and trace system. 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, QR codes, SMS-based authentication, and mobile authentication apps are also being utilised.
India has had incidents wherein the country's pharmaceutical product quality has been questioned. In early 2023, tragic incidents occurred in Uzbekistan and Gambia, where at least 19 and 70 children, respectively, died after consuming cough syrups manufactured by Indian companies. Investigations revealed the presence of toxic substances, diethylene glycol and ethylene glycol, highlighting potential lapses in quality control. These events prompted regulatory actions and heightened scrutiny.
Additionally, 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 extend to the domestic market, with reports of counterfeit drugs circulating within India raising questions about the integrity of the supply chain.
India's practices 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. The repercussions of these incidents have tarnished India's reputation as a global pharmaceutical hub. Doubts surrounding quality control and adherence to international standards have cast a shadow on India's status as a reliable supplier, potentially impacting export opportunities and global trust in Indian pharmaceutical products.
Industry stakeholders have responded with a mix of relief and concern to extending the deadline, which offers both opportunities and risks. Companies now have more time to invest in technology and infrastructure and to train staff. However, experts say continued delays could heighten scrutiny from international markets and impact India's standing as a reliable pharmaceutical exporter.
In December 2023, the Central Bureau of Investigation (CBI) was ordered to probe allegations of substandard medicines being supplied to some Delhi government hospitals. This case involved concerns about the quality and safety of drugs procured and administered to patients. While details regarding the specific nature of the ‘substandard’ medicines are still under investigation, the lack of a robust traceability system is a significant factor contributing to such issues.
‘In medical devices, we have been recommending enforcement of tracking and tracing on shipping cartons and shelf boxes for low-risk and medium-risk devices based on QR or bar codes and individual high-risk implants. It can additionally be on unit packs based on QR codes with unique device indemnification (UDI) for exports and domestic markets to enable traceability and recall for ensuring patient safety; for low and moderate-risk devices, this can be considered on a unit pack of sale, if needed in due course by a consultation process,’ said Rajiv Nath, Forum Coordinator Association of Indian Manufacturers of Medical Devices (AiMeD).
India's pharmaceutical industry is vital to global healthcare as it is the world’s largest supplier of low-cost generics, vaccines, and affordable HIV medicines.
The industry aims to become the world's largest supplier of drugs by 2030, increasing its revenue from $120-130 billion to $50 billion. India has a well-established domestic manufacturing base, a low-cost but skilled workforce, and a growing research and development eco-system; the Indian pharma industry is 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.
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