India is cracking down on fake drugs—retailers and wholesalers could pay the price

India’s apex drug regulator is working on stringent rules that would hold retailers and wholesalers accountable for selling or storing spurious drugs, even if they hold valid purchase invoices, two officials aware of the matter said. Currently, under Section 19 of the Drugs and Cosmetics Act, 1940, only manufacturers are prosecuted, while others remain exempt.

The Central Drugs Standard Control Organization (CDSCO) has set up a committee to explore ways to tighten enforcement, aiming to plug regulatory loopholes that allow counterfeit medicines to enter the market unchecked. The move comes at a time when India’s reputation as the "pharmacy of the world" has suffered following reports linking India-made cough syrups to the deaths of children overseas.

The proposed rules would likely remove legal exemptions that currently shield retailers and wholesalers if they can produce valid purchase invoices.

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“A committee has been formed and will shortly submit their report. The committee has sought suggestions from the State Licensing Authorities (SLAs), till what extent punishment can be extended. Right now, there are certain exemptions in the Drugs and Cosmetic Act,1940…So, the plan is to narrow down these exemptions," an official familiar with the discussions explained requesting anonymity.

The issue was deliberated in a December Drugs Consultative Committee (DCC) meeting chaired by Drugs Controller General of India (DCGI) Rajeev Raghuvanshi. Mint has seen a copy of the minutes of the meeting.

The official added that discussions are on to develop rules on this matter. “The spurious drugs manufacturers, distributors and sellers, they need to be dealt very harshly."

Queries sent to spokesperson of health ministry on Tuesday remained unanswered at the time of publishing.

Past regulatory actions

Over the years, the Central Drugs Standard Control Organization (CDSCO) and the Union health ministry have introduced multiple measures to safeguard drug quality.

In 2008, the Drugs and Cosmetics Act, 1940, was amended under the Drugs & Cosmetics (Amendment) Act, 2008, introducing stringent penalties for manufacturing spurious and adulterated drugs. The amendment also made certain offences cognizable and non-bailable, strengthening enforcement capabilities.

Despite these measures, counterfeit drugs continue to surface. In December 2024, authorities seized spurious anti-cancer and anti-diabetic drugs worth ₹6.60 crore in Kolkata. The illicit trade was uncovered after documentation discrepancies pointed to unauthorized distribution channels.

The market for spurious drugs in India is estimated to be worth $3 billion, compared to $50 billion crore for the total pharma market as of FY24.

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While the DCC has been actively reviewing the issue, one key challenge is tracking illegal drug transactions, which often occur through unregistered entities and fly-by-night operators, making enforcement difficult.

A second official explained that if a retailer in Hyderabad is sourcing medicines from a wholesaler in Delhi instead of local suppliers, it raises suspicion.

These unexplained supply chains indicate a risk of counterfeit drug circulation. To address this, the official added, the government may introduce stricter sourcing restrictions under the Drugs and Cosmetics Rules.

Threat of spurious drugs

The presence of spurious drugs in the market poses serious health risks. These counterfeit medicines often contain incorrect active ingredients, harmful impurities, or even toxic substances like mercury and arsenic.

These drugs can lead to treatment failure, severe side effects, or even death. The presence of diluted antibiotics in counterfeit medicines also contributes to antimicrobial resistance, making infections harder to treat, according to Raj Prakash Vyas, president, corporate affairs, Cadila Pharmaceuticals.

Identifying counterfeit medicines can be challenging, Vyas said, but consumers can take certain precautions.

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The first step is to purchase medicines only from licensed pharmacies or authorized suppliers. If a drug is priced significantly lower than usual, it could be a sign of a counterfeit product. He added that checking packaging for spelling errors, inconsistencies, or signs of tampering can also help, as can comparing the medicine’s appearance, colour, shape, or smell with a known genuine version.

Industry pushback

Despite the government’s push, the proposed liability expansion has faced strong resistance from retailers and wholesalers.

Rajiv Singhal, general secretary, All India Organization of Chemists and Druggists, argues that retailers should not be held responsible for spurious drugs if they source medicines through authorized channels with valid invoices.

He said chemists operate within a structured supply chain, including clearing and forwarding (C&F) agents, wholesalers, and retailers. If medicine is found to be spurious, the liability should lie with those introducing counterfeit products into the market, not with retailers who have followed due process.

As authorities move toward stricter penalties, a key concern is ensuring that enforcement distinguishes between willful negligence and genuine lapses.

Officials have indicated that wholesalers and retailers will be expected to exercise due diligence in sourcing medicines from authentic dealers.

However, the ultimate responsibility for validating purchase records and ensuring compliance will rest with drug enforcement teams, which will conduct detailed investigations before holding businesses accountable, said the second official.

Meanwhile, the government has been pushing for traceability measures such as drug barcoding, which would allow consumers and regulators to verify authenticity.

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Singhal supports this move, saying that barcoding could help prevent counterfeit medicines from infiltrating the market. He noted that widely used drugs like paracetamol and pantoprazole are frequently counterfeited by unauthorized operators.