New Delhi: The government is close to finalizing a proposal to grant licences in perpetuity to pharmaceutical companies, scrapping the existing policy that required renewal of licences every five years.

Aimed at enhancing the ease of doing business in India, the government has proposed that manufacturers be granted licences that will remain valid as long as they comply with good manufacturing practices (GMP).

India’s drug regulator has also proposed an inspection of drug manufacturing plants every three years by both central and state inspectors to verify compliance with the conditions of licence and provisions of the Drugs and Cosmetics Act, 1940. The suggested changes in the existing Drugs and Cosmetics rules will soon be sent to the law ministry for vetting after which they will be notified.

“We are in the process of promoting self regulation but at the same time, strict action on violation will be taken," said G.N. Singh, Drugs Controller General of India (DCGI)

For drug makers, the amendment would mean doing away with the need to periodically renew licences for the manufacture, sale and distribution of products.

“It has been proposed that manufacturing and sale of licences, once issued, shall remain valid forever unless suspended or cancelled by the licensing authority. Non-compliance to GMP would immediately attract cancellation. The relevant rules will be amended for this purpose and will then be notified," a senior official at the Drugs Controller’s office said, requesting anonymity.

Fearing that joint inspections would cause delays in the licensing procedure and make compliance a lengthy affair for pharma firms, especially small and medium enterprises, the industry had approached the drug regulator suggesting that a single authority should carry out inspections.

However, the government has decided to go ahead with carrying out joint inspections. The good news for the industry is that the inspection will be carried out every three years instead of annually as earlier recommended in the proposal.

“The was a representation by the industry against joint inspections. Earlier we were planning to make it mandatory once every year. However, we have revisited it and will make it compulsory every three years," added the official. In case the company makes any changes in the manufacturing process, a no-objection certificate from the regulator will be mandatory.

“The manufacturers will have to inform the regulator and apply for a no-objection certificate in case of any minor or major changes made by them in their unit".

Leena Menghaney, South Asia regional head of the Access Campaign at Médecins Sans Frontières, said that the step to scrap licence renewals will be a huge set back in ensuring quality of the product. “licences can’t be granted in perpetuity. I have not heard of licences being granted in perpetuity even in well-regulated countries. The licences should be renewed periodically, it is a significant factor in maintaining the quality," Menghaney said.