Generic Medicines Under Scanner: CDSCO on the Backfoot

Generic Medicines Controversy: CDSCO Accused of Inaction

India, often hailed as the "Pharmacy of the World," anchors a pharmaceutical industry valued at approximately USD 50 billion in FY 2023–24, with projections estimating growth to USD 120–130 billion by 2030. The generic medicines industry forms the backbone of this sector, fueling both domestic consumption and global exports. The generic drugs market, valued at USD 24.91 billion in 2024, is projected to reach USD 35.62 billion by 2030, growing at a CAGR of 6.02%. Generics dominate India’s retail pharmaceutical market, accounting for 70–80% of revenue and nearly 100% of volume in some segments. As the largest provider of generic drugs by volume, India holds a 20% share of global exports. Yet, if the quality of these generics is compromised, the far-reaching public health implications could be catastrophic, threatening millions of lives both within India and across the globe reliant on its affordable medicines.

The Central Drugs Standard Control Organisation (CDSCO), under India’s Ministry of Health and Family Welfare, serves as the national regulatory authority tasked with ensuring the safety, efficacy, and quality of pharmaceuticals, including generic drugs. Its role is indispensable in upholding compliance with national and international standards, a responsibility that directly impacts public health and sustains India’s stature as the world’s leading supplier of generic drugs by volume. Through approving manufacturing licenses, conducting inspections, and testing drug samples, CDSCO aims to block substandard and spurious medicines from entering the supply chain. With generics comprising a large majority of India’s retail pharmaceutical market, the CDSCO’s vigilance is critical to preventing low-quality drugs from undermining trust and endangering lives both domestically and abroad.

States Are Not Sharing Data, Says CDSCO Official

In April 2025, the CDSCO released yet another list of Not of Standard Quality (NSQ) drugs, highlighting persistent concerns about substandard pharmaceuticals in India. NSQ drugs are those that fail to meet quality standards or specifications, as defined under Section 16(1)(a) of the Drugs and Cosmetics Act, 1940, often due to inadequate active ingredients, poor dissolution, or other quality failures. The CDSCO publishes this NSQ list monthly, based on random sampling and testing conducted by its central and state laboratories. For April 2025, the list flagged 196 drug samples as NSQ, with 60 identified by central drug laboratories and 136 by state laboratories, a significant portion of which were generic medicines. 

However, this list captures only a small fraction of the actual low-standard and spurious generics circulating in India’s vast pharmaceutical market. The CDSCO, along with state laboratories, tests approximately 70,000–80,000 drug samples annually, a minuscule proportion of the millions of drug batches produced across India’s 10,500+ manufacturing units. With the generic drug market valued at USD 24.91 billion in 2024 and comprising nearly 100% of some market segments by volume, the scale of production far outstrips the regulatory capacity for comprehensive testing, leaving massive gaps in the detection of substandard and counterfeit medicines.

A senior official at the CDSCO, speaking on condition of anonymity, revealed the depth of the agency’s frustration with the lack of state cooperation: “We face numerous challenges, but the most critical is that many states simply don’t share their testing data with us. Without data, what can we do? If you dig into this, you’ll find layers of complexity—wheels within wheels. The data we do publish is merely a drop in the vast ocean.” This candid admission exposes the CDSCO’s struggle to compile comprehensive Not of Standard Quality lists. 

Are Some States Skipping Drug Tests or Hiding the Results? CDSCO Faces Data Blackout

The CDSCO compiles its monthly NSQ list by testing medicines through its network of seven Central Drugs Testing Laboratories and numerous state-run testing labs. However, these facilities face multiple challenges that severely compromise their ability to effectively scrutinise pharmaceuticals, particularly generics. Inspections conducted since July 2023 have exposed critical deficiencies, including data manipulation, non-compliance with Good Laboratory Practices (GLP), and inadequate documentation. Of 72 audited labs, 39 received show-cause notices, while others faced suspensions or warnings.

The central labs are hampered by outdated equipment, poor infrastructure—such as flawed architectural designs risking cross-contamination—and limited testing capacity. Both central and state labs suffer from staff shortages, with insufficient trained personnel to conduct complex tests like bioequivalence studies, alongside gaps in analytical validations and standardised processes. These systemic issues, coupled with weak coordination between CDSCO and state authorities, greatly undermine the labs’ ability to detect substandard or spurious drugs. 

A detailed review of the April 2025 NSQ list exposes a glaring issue: numerous Indian states and Union Territories are failing to share their testing data with the CDSCO. Despite repeated alerts and directives from the CDSCO urging states to submit comprehensive testing reports, many states consistently fail to provide a complete list of tests conducted, month after month. This persistent non-compliance raises pressing questions: Are these states neglecting to perform tests altogether, or are they conducting tests but deliberately withholding the results?

The CDSCO’s heavy reliance on state laboratories for a substantial share of NSQ testing renders the data blackout from non-reporting states particularly concerning. Critics contend that states withholding test results may be conducting tests but concealing findings sometimes to shield local pharmaceutical interests. Greater state participation in NSQ reporting could enhance drug quality nationwide, yet non-reporting states obstruct this progress, undermining efforts to curb substandard and spurious generics.

MSMEs Notorious for Producing Substandard Generic Drugs, Says Official

Micro, Small, and Medium Enterprises (MSMEs) in India’s pharmaceutical sector have emerged as a major source of substandard drugs, posing a grave threat to public health. These enterprises are vital to the USD 24.91 billion generic drug market, but their role in producing Not of Standard Quality (NSQ) drugs has sparked alarm. Risk-based inspections (RBI) conducted by the CDSCO and state drug inspectors since December 2022 revealed that over 65% of inspected MSME pharmaceutical units were manufacturing substandard drugs. In 2023, 30% of these units faced Stop Production Orders (SPOs), and 68% had drug samples fail quality tests—a situation CDSCO officials described as “alarming.” 

“MSMEs are notorious for producing substandard generic medicines in India,” confided a senior CDSCO official based in Delhi. “Many lack effective quality management systems. We’ve found during inspections that some don’t even maintain proper records or comply with Good Manufacturing Practices (GMP). The bigger issue is the lack of stringent action against companies producing substandard drugs. We still don’t have a system that imposes heavy penalties or punishments to ensure accountability. Without fear of consequences, these companies repeatedly produce substandard drugs, sometimes for the same product across multiple months.” 

The CGHS Beneficiaries Welfare Association of India (CBWAI) has been relentlessly pressing the government to address critical flaws in the supply of generic medicines to Central Government Health Scheme (CGHS) beneficiaries. In a recent letter to Union Health Minister JP Nadda, the CBWAI expressed “grave concerns” about the quality of generic drugs provided to CGHS beneficiaries. The association condemned the government’s decision to replace established, effective, and tested branded life-saving drugs with “cheap, spurious, and untested” generic alternatives, calling it “nothing short of alarming.” The letter warned that this shift “has put the lives of countless CGHS beneficiaries at risk, leaving them vulnerable to substandard treatment and potentially catastrophic health consequences.”

The CBWAI’s letter further highlighted the dire implications of substandard generics: “The generic drugs being issued are often of questionable quality, with their efficacy and safety not guaranteed. This has led to a situation where patients are being forced to purchase life-saving drugs from the market, as no one is willing to take the risk of consuming potentially spurious generic medicines. The absence of an option for patients to opt for branded medicines, especially for those suffering from chronic diseases, has further exacerbated the crisis. The continued issuance of substandard generic drugs poses a significant risk to the health and well-being of CGHS beneficiaries, undermining the very purpose of the CGHS scheme.”

Dr. Dilip Ganguly, National President of the CGHS Beneficiaries Welfare Association of India, clarified the association’s stance: “We are not against the government’s push for generic drugs, but we are fighting for generics that meet standard quality. The generic medicines are not being tested as per standard protocol, which is a massive issue for our country’s citizens. The government has issued a circular to Central Government Hospitals, CGHS Wellness Centers, and Polyclinics mandating that only generic drugs be prescribed, with a strict ban on branded medicines. Since the current testing system falls short of standard practices, we believe the government should prioritise generics manufactured by branded companies with robust testing capabilities. The government must incentivise these companies to produce affordable generics to ensure quality and accessibility.”

Dr. Ganguly emphasises the critical need for life cycle testing of medicines, a practice often neglected for many generic drugs available in India today. “Life cycle testing is extremely important,” he asserts. “It involves a comprehensive evaluation of a drug’s safety, efficacy, and quality across its entire life cycle—from pre-clinical development, bioequivalence studies, and manufacturing to market authorisation, post-market surveillance, and disposal—ensuring compliance with standards like the Indian Pharmacopoeia and Good Manufacturing Practices (GMP). For generic medicines, this testing is absolutely critical. However, life cycle testing is not consistently conducted for most generic medicines in the market. This gap allows substandard and spurious generics to circulate in the pharmaceutical market, posing massive risks to public health,” he notes.

“They Are Treating Us Like Guinea Pigs”

Girdhari Lal Jogi, General Secretary of the Sanchar Nigam Pensioners’ Welfare Association, has voiced scathing criticism of the generic medicines supplied to Central Government Health Scheme (CGHS) beneficiaries, alleging systemic failures in quality control. “They are treating us as guinea pigs. No testing. No quality control. They absolutely have no infrastructure,” Jogi told The Probe. Representing nearly 12,400 CGHS beneficiaries, he claims that a large number of association members have stopped relying on generic drugs from CGHS dispensaries, deeming them “totally ineffective.” 

Jogi shared a personal ordeal to underscore his concerns: “Around six months back, I had a fungal infection. I went to a dermatologist who prescribed me antifungal generic drugs for six weeks. I had no relief at all. Then finally I was prescribed the branded version of the same drug, and within a matter of days my fungal infection was cured.” This experience, he argues, reflects a broader issue affecting citizens. 

Highlighting specific examples, Jogi pointed to Pantoprazole, an oral tablet used for acid reflux, available both as a generic and branded drug. “The cost of the generic medicine is one rupee per capsule. I fail to understand how the manufacturer can produce, test, transport, and do everything for just one rupee. The medicine is totally ineffective. This is a great matter of public interest,” he argued. 

“Government Not Hiring Enough Drug Controllers”

​The CDSCO grapples with severe operational challenges, primarily due to a critical shortage of drug controllers, a problem rooted in systemic understaffing and underfunding within India’s public health administration. Tasked with overseeing drug approvals, clinical trial monitoring, and post-market surveillance, the CDSCO’s limited workforce struggles to manage the immense regulatory demands. 

Dr. Dilip Bhanushali, National President of the Indian Medical Association (IMA), highlighted this crisis: “The real issue in our country is the very low number of drug controllers. The government is not hiring enough drug controllers. We have raised this with the government multiple times. More drug controllers must be hired.” This staffing shortfall hampers effective regulation, allowing substandard and spurious generic medicines to persist in India’s vast market.

Dr. Bhanushali also expressed frustration over the government’s lack of response to the IMA’s repeated concerns about generic drugs. “The IMA has consistently raised issues related to generic medicines. If generics are tested and certified by the government following standard procedures, they can greatly benefit the poor. But that’s not the reality today. A large majority of generic drugs in the country are either substandard or spurious,” he stated. He emphasised that when drugs are identified as spurious, manufacturers should face stringent punishment, including imprisonment, yet such measures are rarely enforced. The IMA’s letters to the government on these issues have gone unanswered. 

Bhanushali further criticised the lack of transparency in quality testing for generics, particularly those sold through Jan Aushadhi outlets. “The government has published a list of approved medicines for Jan Aushadhi stores, but we still have no clarity on whether these generics are genuine or what quality tests they have undergone,” he said. He stressed the need for constant inspections to ensure compliance with standards, a process undermined by the CDSCO’s limited capacity. The absence of rigorous testing and enforcement, coupled with inadequate oversight, leaves patients vulnerable to ineffective or dangerous drugs. 

Decriminalising Drug Quality Violations: A Boost for Business, a Blow to Patient Safety?

In August 2023, the Modi government introduced the Jan Vishwas (Amendment of Provisions) Act, 2023, which decriminalised Section 27(d) of the Drugs and Cosmetics Act, 1940. This change replaced imprisonment of up to two years with a fine of up to ₹5 lakh for manufacturing or selling Not of Standard Quality (NSQ), misbranded, or adulterated drugs that do not cause grievous harm or death. Effective from August 2023, the amendment permits “compounding” of such offenses, allowing violators to pay fines to avoid criminal proceedings. The government stated this reform aims to alleviate judicial backlog and foster ease of doing business by addressing minor technical violations, such as labeling errors or slight quality deviations.

The government clarified that the amendment does not weaken penalties for severe violations. Serious offenses involving spurious or adulterated drugs causing grievous harm or death under Section 27(a) still carry penalties of seven years to life imprisonment. The Ministry of Health and Family Welfare stressed that the punishment quantum under Section 27(d) remains unchanged for non-compoundable cases, and drugs failing critical safety parameters or produced without a license are excluded from compounding. This distinction, the government argues, ensures that only minor infractions benefit from the relaxed penalties, while robust measures remain in place to deter dangerous malpractices in India’s pharmaceutical sector.

Critics, including the All India Drug Action Network (AIDAN), Congress, Trinamool Congress, and the All India Organisation of Chemists and Druggists (AIOCD), have vehemently opposed the amendment, arguing it undermines deterrence and could increase the production of substandard and spurious generics. They assert that fines up to ₹5 lakh may be viewed as a “cost of doing business,” especially by smaller MSMEs, which often lack robust testing infrastructure. 

The Probe has reached out to the Central Drugs Standard Control Organisation with a detailed questionnaire highlighting key concerns. We have sought the regulator’s official response to ensure a balanced coverage. This story will be updated to reflect CDSCO’s position once we receive their reply.

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