1. The Drug Policy of 1986, which was titled “Measures for Rationalization, Quality Control and Growth of Drugs Pharmaceuticals Industry in India” was evolved under the dynamic guidance and leadership of late Shri Rajiv Gandhi. This was done after a detailed examination of the various issues. The main objectives of the Drug Policy, 1986 are as under :

• ensuring abundant availability, at reasonable prices of essential and life saving and prophylactic medicines of good quality;
• strengthening the system of quality control over drug production and promoting the rational use of drugs in the country;
• creating an environment conducive to channelising new investment into the pharmaceutical industry to encouraging cost-effective production with economic sizes and to introducing new technologies and new drugs; and,
• strengthening the indigenous capability for production of drugs.

2. For meeting the requirements of medicines for health needs at reasonable prices and strengthening the indigenous base the Government has, over the years been guided by the above Policy. Implementation of the main policy provisions has been through the I(D&R) Act on Industrial Licensing aspects and through Drugs (Prices Control) Orders under the Essential Commodities Act in regard to the pricing mechanism. The Drug Policy has also given the policy framework in regard to Quality Control and Rational Use of Drugs. Enforcement of quality and standards in medicines is done through the provisions contained in the Drugs & Cosmetics Act, which is administered by the Ministry of Health and Family Welfare.

Present Status and Approach Adopted in Review

3. Over the last several years, policy inputs have been directed towards promoting the growth of the industry and in helping it to achieve a broad base in terms of the range of products and technologies needed to produce them from as basic a stage as possible. The results have been very encouraging. As on date there are about 250 large units and about 8,000 small scale units in operation, which form the core of the Industry (including 5 Central Public Sector Units). These units produce the complete range of formulations i.e. medicines ready for consumption by patients, and about 350 bulk drugs,i.e.chemicals having therapeutic value used for production of formulations. It is estimated that 70 per cent of the indigenous demand for bulk drugs and almost the entire demand for formulations are being met through domestic production.

4. During the last decade the production of bulk drugs has grown from Rs. 240 crores in 1980-81 to Rs. 1320 crores in 1993-94 and corresponding increase in production of formulations has been from Rs. 1200 crores to Rs. 6900 crores. The export performance of Industry has also been commendable. The trade balance has been positive for the last four consecutive years. During 1992-93 the trade balance was Rs. 560 crores (excluding exports of Medicinal Castor Oil).

5. Since 1986, the Drug Industry has grown significantly, as mentioned earlier, in terms of production of bulk drugs and formulations. In many cases manufacture of bulk drugs has also been established from the desired basic stage. It is estimated that in case of bulk drug production the contribution of small scale sector is approximately 30 per cent of the total production in the country. It may also be mentioned that the pharmaceutical sector has been able to carve a special niche for itself in the international market as a dependable exporter of bulk drugs. As already mentioned, the industry has been a net exporter in the last four years.