What is happening with the 86-year-old drug law?

**Lavika** (0:04)
In today's episode, we'll break down two important stories. First, what is happening with the 86-year-old drug law?
Then, why did tractors not get the monsoon memo? Welcome to The Daily Brief by ZeroDha, where we cut through the noise to help you understand what's actually happening in the most important stories from business and markets. I'm your host Lavika, today's Friday, 14th August. Coming to our first story, medicines are unusual products because the buyer cannot really judge the quality themselves. For every other thing like a shirt or a car, you can check the quality before you buy it. But once you buy a tablet, there's no way a lay person can look at it and tell whether it is harmful or not. The stakes are even higher because buying a bad shirt is just inconvenient. But a wrong tablet puts your life at risk. That is why medicines need a much stronger system of regulation than ordinary consumer products.
India has had such a system for over 80 years, built around the Drugs and Cosmetics Act 1940 And right now, the government is considering replacing it with a new drugs, medical devices and cosmetics law. This is hardly the first attempt. Similar drafts have been discussed multiple times over the years.
One version even reached parliament as an amendment bill in 2013, before the cabinet withdrew it in 2016
Later, attempts stalled during stakeholder consultations. Yet, the idea keeps coming back. Usually, it takes a drug safety disaster to put it back on the table. Remember the Madhya Pradesh incident in 2025, when India made cough syrup was linked to the deaths of dozens of children? Similar tragedies have already played out in Gambia and Uzbekistan in 2022 and 2023 These tragedies damage India's reputation as the pharmacy of the world, a massive exporter of affordable medicines that other countries rely on. So the bill resurfacing in 2026 is not really the story. The more interesting question is why India keeps needing it? To answer that, we need to look at how India's drug regulation system actually works. The easiest way to understand India's drug regulation system is to follow what happens when a company wants to sell a new medicine. The first question is about the medicine itself. Can this drug be sold in India? If it is a new drug, the company needs central approval. Today, that comes through the Central Drug Standard Control Organization or CDSCO, headed by the Drugs Controller General of India. The regulator reviews clinical trials and safety data to check whether the drug is safe and effective. But this modern approval process sits on top of a much older law. India's basic drug law is still the Drugs and Cosmetics Act, 1940, created to control imports, manufacturing, and sales at a time when India had no national drug standards. The act was fairly bare bones, so detailed laws were added as medicine became more complicated, and some things changed completely. In 1914, nobody could have imagined buying pills on a mobile app. Today, online pharmacies are a massive business, but still operate in a regulatory gray area without a clear modern law governing them. New drug approvals, meanwhile, are now governed much more specifically by rules like the New Drugs and Clinical Trials Rule 2019
Once a company gets central approval, the drug itself is cleared, but someone still has to manufacture it. That leads to the second question. Can this particular factory make the medicine properly? This is where the Drugs Rules 1945 comes in. Manufacturing licenses are largely handled by state regulators, which inspect factories, issue licenses, and monitor production standards. So the system splits responsibility between two levels. The center asks, should this new drug be allowed? The state asks, can this manufacturer make it properly? One decides whether the medicine itself passes muster.
The other makes sure the factory producing it does too. One category of medicine showed just how badly this chain could break down. Fixed-dose combinations or FDCs. An FDC combines two or more drugs into a single pill. Legally, a new combination counts as a new drug. After all, nobody has tested what happens when you take those ingredients together in that exact mix. So, it still needs central CDSCO approval. And this is where the cracks appeared. Over the years, some state regulators independently licensed thousands of FDCs without central approval, treating them as ordinary, already approved drugs. This eventually led to the massive FDC crackdown of 2026, when the center banned hundreds of combinations. The ban then got tied up in court battles for years. One of the best known products affected was Vicks Action 500 Extra. The problem was not necessarily that the individual ingredients were dangerous. Combining multiple drugs can expose patients to medicines they do not need, increase side effects, and make it harder to adjust the dose for each ingredient separately. But the bigger problem was regulatory. These drugs were supposed to need central approval, yet state licenses were enough for thousands of them to reach the market anyway. The FDC mess was the symptom. The real problem was the system that allowed it to happen. India's drug regulators often do not know what the others are doing. When 36 independent state and union territory regulators, enforcement can vary sharply across the country. That gives manufacturers an incentive to strategically choose the easiest regulator, shifting production towards states with softer enforcement. But different standards are only part of the problem. Sometimes, basic information does not travel either.