The move could significantly tighten oversight of India’s $50 billion pharmaceutical market, although industry stakeholders are calling for caution over the plan.
The Drug Controller General of India’s (DCGI) proposal includes increasing the jail term by three-and-a-half times to seven years and financial penalty up to 28 times under the Drugs and Cosmetics Act to bring it in line with the tougher Narcotic and Psychotropic Substances Act (NDPS).
The Medicines and Cosmetics Act is limited in scope and often poorly enforced. Violation of this law is punishable by imprisonment for two years and a fine of ₹20,000, and the crime is often punishable, said the people above.
The new plan seeks to introduce a minimum of seven years in prison and a minimum fine ₹5 lakh and make these offenses cognizable and non-bailable. With approximately 2.5 million “addicted users” of pharmaceutical opioids in the country, this development assumes significance for the Indian pharmaceutical market, according to a 2019 government report released by the Ministry of Social Justice.
What are these drugs about?
The segment under the lens includes highly regulated drugs from Schedule H, H1 and X and accounts for 30% of high-value prescription antibiotics, psychotropics and analgesics, according to industry estimates by the Indian Pharmaceutical Alliance (IPA), which represents 23 leading domestic research-based pharmaceutical companies.
Formulations such as codeine-based syrups – Alprazolam, Tramadol and Zolpidem, which are categorized under the highly regulated drugs H, H1 and X – are abused as narcotics with impunity. While Alprazolam and Zolpidem are prescribed to treat acute anxiety and insomnia, Tramadol is a strong opioid analgesic used to treat severe pain that requires careful tapering to prevent withdrawal. Another abused drug is diazepam, which is often prescribed for muscle spasms and withdrawal symptoms.
Tightening the loop
The plan includes creating a separate schedule for such drug formulations and a mandatory real-time order tracking system to secure the supply chain through a digital footprint.
Under this new guide, drug manufacturers will be required to provide formal purchase orders and immediately notify authorities of shipments of such drug batches. This includes emailing shipment details to drug inspectors at both the source and destination, as well as the police superintendent in the relevant jurisdictions.
Schedule H, H1 and X drugs cannot be sold without a prescription. This categorization, which aims to ensure the safe dispensing of medicines and prevent their misuse, requires a duplicate prescription and careful record keeping by pharmacists.
“The DCGI is reviewing the proposal to include necessary provisions in the Drugs Rules, 1945 to monitor the sale of certain drugs mentioned in the Drugs Rules and also in the NDPS Act, before the 67th meeting of the Drug Advisory Committee (DCC) held in November 2025,” said one of the two government officials cited above, requesting anonymity.
After reviewing the proposal, the advisory committee recommended the creation of a subcommittee to review the matter.
“Drug formulations with dual presence in both the Drugs and Cosmetics Act and the NDPS Act pose a major challenge to regulators as they have a high probability of being misused as narcotics. It has been observed that there is an increase in misuse of such dosage forms for illegal use mostly at the distribution level and also the likelihood of such incidents at the manufacturer level cannot be ruled out,” he said. government document reviewed by Mint.
“Currently, such drugs are listed in Schedule H/Schedule H1/Schedule X and violations of the provisions and conditions of manufacture and sale/distribution (such as misuse of NDPS and addictive substances) of such drugs are subject to criminal provisions like other Schedule H drugs and over-the-counter drugs,” the document said.
Series H medicines are prescription only and are sold on the prescription of Registered Medical Practitioners (RMPs) and marked ‘Rx’. The H1 list is a stricter sub-category (such as specific antibiotics) that requires a red box notice, special sales registers and keeping prescriptions for three years. Schedule X drugs are powerful narcotics with a high potential for abuse, require a special license, locked storage and are marked “XRx”.
“As such licensed wholesalers/retailers indulging in the misuse of these drugs for the illegal abuse/intoxication of the young generation are only liable to statutory punishment under Section 18(a)(vi) in which the maximum punishment is two years. The offense is bailable and non-cognisable and the fine is ₹only 20,000,” the document states that these are changes to the law; an imprisonment of at least seven years and a fine of not less ₹5 lakhs.
Seizures of pharmaceutical tablets used as psychotropic substances rose from 18.4 million units in 2020-21 to over 46.9 million units by the end of the last recorded assessment in FY25, according to the Narcotics Control Bureau (NCB) annual report and a press release by the Ministry of Home Affairs (MHA).
India the pharmaceutical sector produces a wide variety of drugs, including several of the above-mentioned addictive substances. These drugs are highly regulated due to their potential for abuse and physical or psychological dependence.
“This change is intended to tighten the noose around wholesalers and retailers who use the current system to supply drugs to the younger generation,” said the second government official mentioned above.
Inquiries emailed to spokespersons for the Department of Health and Family Welfare and DCGI on January 27 remained unanswered as of press time. Email queries to leading drug makers Sun Pharma, Dr Reddy’s Laboratories, Abbott, Aurobindo Pharma and Glenmark also went unanswered on Friday.
The flip side – a call for caution
Public health experts also said the government needed to be cautious about the regulations, given concerns about legal liability for chemists.
Dr. Atul Ambekar, professor of psychiatry at the National Drug Addiction Center at the All India Institute of Medical Sciences v delhi, said: “We need to be careful with these regulations. If the bar is set too high, chemists may stop stocking essential drugs because of perceived legal liability and low profit margins; ultimately depriving real patients of the treatment they need.”
While drug abuse is indeed a concern, the primary substance abuse crisis in northern India continues to center on illicit drugs such as heroin, said Dr. Ambedkar. “Our regulatory response must balance the need for control with the need for patient access,” he added.
The pharmaceutical industry is also opposing the regulator’s plan to tighten regulations.
Devesh Malladi, Chairman, NDPS Committee at Indian Drugs Manufacturing Association (IDMA), representing 1200 companies, said that the proposal to introduce additional monitoring provisions under the Drugs Rules, 1945 for substances already governed by the NDPS Act, 1985 is unnecessary, duplicative and impractical.
“The NDPS Act is a comprehensive and special piece of legislation that already mandates strict controls on the manufacture, sale, purchase, possession, record-keeping and reporting of notified substances. It is backed by strict penal provisions, including mandatory imprisonment, fines and strong enforcement mechanisms. There is no regulatory vacuum to warrant parallel surveillance under the Drug Rules,” said Malladi.
Imposing overlapping compliance requirements risks regulatory confusion, multiple inspections and duplicative reporting without improving enforcement outcomes, he said.
“Such duplication is also contrary to the principle that a special law should prevail over a general law. In terms of implementation, the proposal is unfeasible as compliance with the NDPS is managed through designated bodies with specialized enforcement powers and not through the normal drug control mechanism,” Malladi said. “Expanding NDPS-type monitoring under drug rules would strain already overburdened state drug agencies.”
Over-regulation of legally produced controlled substances will have a dampening effect on pharmaceutical production and export, deterring compliant operators while doing little to curb illegal abuse.
“If there are any loopholes, they should be addressed within the NDPS itself, rather than creating a parallel regulatory regime. The proposal needs to be revisited for regulatory clarity, ease of doing business and effective enforcement,” he said.
India has 10,500 pharmaceutical manufacturing units, with the market expected to grow to US$ 130 billion by 2030 and US$ 450 billion by 2047, according to the Ministry of Pharmacy and Viksit Bharat Vision 2047.
“Distributors and retailers often react cautiously to unclear or oppressive compliance requirements, which can potentially reduce inventory. In the short term, this can affect availability,” said Arpit Bhatia, director of Laborate Pharmaceuticals, which manufactures a range of prescription drugs for both domestic and export markets. “Success depends on implementation: clear definitions, predictable processes and a gradual transition are essential to ensure tighter controls do not inadvertently disrupt access to medicines.”
The primary challenge is executing across a fragmented ecosystem with varying digital readiness. Maintaining accurate, real-time reporting outside urban centers requires sustained investment, Bhatia said. “Companies must upgrade technology and retrain teams without slowing down delivery. Realistic timelines and ongoing collaboration between regulators and industry are essential to a workable system,” he added.
Legal experts say enforcement of such laws should not be arbitrary or asymmetric. “As with all laws that have broad criminal powers, enforcement of these laws should not be arbitrary or asymmetric. This could have the effect of slowing down the supply chains of painkillers and psychotropic drugs, which is certainly a side effect of a well-intentioned legislative move,” he added. said Akash Karmakar, partner at law firm Panag & Babu and senior advisor to Flint Global.