CDSCO takes steps towards redrafting the new drug approval framework to ensure fair play

The Central Drugs Standard Control Organization (CDSCO) has launched a critical review of India’s new drug approval framework, inviting comments from stakeholders to address disparities in the approval process between first-mover applicants and later entrants. The move is expected to have a major impact on India’s ₹3.4 lakh crore pharmaceutical industry, where innovation-driven companies have long been seeking more policy support to offset the high cost of clinical trials.

The notice, issued by the latter’s new drugs division of CDSCO, highlights a growing concern within the regulatory system: once a new drug is approved in India based on an applicant’s local clinical trial data, other companies can seek approval for the same drug by simply submitting bio-equivalence (BE) study data – bypassing the need for full-scale clinical trials.

unequal burden on first movers

Under the New Drugs and Clinical Trials Rules, 2019, applicants are generally required to conduct clinical trials on Indian patients before marketing a new drug. However, CDSCO notes that in practice, only the first applicant usually bears the costs and regulatory risks of generating clinical and bioequivalence data. Once the data form the basis of approval, other applicants – often submitting “subsequent new drug” applications – gain market entry with significantly fewer regulatory requirements and lower compliance costs.

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“This has resulted in a level playing field between the earlier applicant, who conducts local trials, and subsequent applicants, who receive approval based only on bioequivalence study data,” CDSCO said in its notice.

Industry observers said this imbalance discourages domestic companies from taking the lead in clinical research. “Economics don’t matter for first-movers,” said a senior R&D head at a leading Indian pharmaceutical company. “Once you spend crores in conducting local clinical trials, competitors can quickly enter with minimal data requirements and lower costs. This discourages true innovation.”

The policy is being reconsidered

To bridge this gap, CDSCO has sought public comments within 30 days, with the aim of “deliberating on the matter in consultation with stakeholders and line departments to take an appropriate decision”. Stakeholders can submit feedback through dci@nic.in and snd@cdsco.nic.in.

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The regulator said the feedback will be used to formulate a balanced policy “to promote research and development of new drugs in the country as well as ensure a level playing field in new drug approval”.

Experts say the timing of the consultation is noteworthy, as India seeks to establish itself as a global hub for drug discovery and clinical trials under the government’s “MedTech and Pharma 2047” vision. A more equitable regulatory regime could encourage companies to invest in new drug pipelines rather than relying primarily on generic replication.

Implications for the Indian pharma ecosystem

If the CDSCO review leads to stronger recognition for first applicants – through data protection, market exclusivity periods or differentiated regulatory pathways – this could realign incentives in the domestic industry.

A pharmaceutical policy analyst said, “India’s policy framework should evolve from generic-centric to pro-innovation.” “A transparent system that rewards first-movers without compromising affordable access can catalyze investment in R&D and put India in a competitive position vis-à-vis global innovation hubs.”

However, the challenge for regulators will be to strike the right balance between encouraging innovation and maintaining timely access to affordable medicines – particularly in therapeutic areas of high public health importance.

next steps

This consultation is one of CDSCO’s most direct engagements with the pharmaceutical industry on improving approval criteria in recent years. Depending on stakeholder feedback, the agency may propose amendments to the new drug and clinical trial rules or issue clarifying guidelines that redefine how new drug applications are treated.

For now, the move signals a broader policy shift – one that acknowledges the cost burden on innovators and the need for a fairer, more competitive regulatory environment as India looks to strengthen its position in global drug research and development.