7 common compliance issues faced by the pharmaceutical industry in India

India’s pharmaceutical industry is one of the largest in the world, playing a crucial role in both domestic healthcare and global drug supply. But behind the innovation and scale lies a web of regulations that pharma companies must follow closely. Compliance in this sector is non-negotiable; it impacts everything from manufacturing and labour to environmental practices and global trade. Here are seven key compliance challenges that Indian pharmaceutical companies often face:

1. Labour law compliance across states

Pharmaceutical companies operate large plants and labs across multiple states, often employing a mix of permanent, temporary, and contract workers. With each state having different rules under labour laws, staying compliant with things like minimum wages, working hours, social security contributions, and contract labour regulations becomes a tough task. Companies often struggle to maintain uniformity and visibility across locations, especially in the absence of centralised tracking systems. This is where technology-led solutions such as SaaS platforms and digital dashboards are now increasingly being used to streamline labour compliance and reduce the risk of legal exposure.

2. Environmental and workplace safety regulations

Pharma production often involves chemicals, effluents, and emissions. Companies are required to follow strict rules around waste management, pollution control, hazardous material handling, and workplace safety under various environmental and factory laws. Regular inspections by pollution control boards, environmental audits, and safety drills are mandated to ensure safety standards are maintained. Non-compliance can result in fines, production suspensions, and even criminal liability. Building internal safety protocols and maintaining comprehensive documentation are essential to meet these environmental and safety obligations.

3. Licensing and statutory filings

Pharma companies need several licences and approvals, from drug manufacturing licences under the Drugs and Cosmetics Act to Good Manufacturing Practice (GMP) certifications and factory registrations. These licences must be regularly renewed, and periodic filings must be submitted to multiple regulatory bodies. Missing these timelines can lead to the suspension of operations, delay in product launches, or supply chain breakdowns. Many firms still rely on manual systems, increasing the chances of error or oversight. An organised, automated system for tracking and managing these timelines is critical to staying compliant.

4. Ethical conduct and ESG compliance

With a growing emphasis on ethical practices and sustainability, pharmaceutical firms are under pressure to comply with Environmental, Social, and Governance (ESG) standards. Ethical concerns include fair marketing practices, transparent pricing, responsible sourcing of raw materials, and proper conduct in clinical trials. Globally, investors and regulatory bodies are also seeking better disclosures on how companies treat their workforce, manage waste, and contribute to community welfare. Non-compliance in this area not only affects legal standing but also damages brand credibility and investor confidence.

5. Contract labour and vendor management

Contract labour forms a large part of the workforce in pharma manufacturing and distribution. However, managing this workforce comes with its own set of challenges. Employers are responsible for ensuring that contractors comply with minimum wage laws, social security norms, and health and safety regulations. Failure to do so can lead to liability under the Contract Labour (Regulation and Abolition) Act. Without proper tracking of vendor practices, companies risk penalties and operational setbacks. Regular audits, proper documentation, and legal vetting of contracts are necessary to avoid such issues.

6. Data privacy and technology integration

Digital transformation in the pharma sector has increased the volume and sensitivity of data being handled, from employee records and patient data to clinical trial information. With the introduction of the Digital Personal Data Protection Act (DPDP), companies will face stricter rules around how personal data is collected, stored, and processed. A lack of awareness or preparedness around these regulations could lead to data breaches and regulatory action. Implementing secure IT systems, ensuring data anonymisation, and training employees on data privacy protocols are essential steps to stay compliant.

7. Navigating global regulatory expectations

Pharma companies that export must meet strict international standards such as USFDA, WHO-GMP, and EMA. These regulations cover everything from quality checks and documentation to supply chain transparency. Falling short can mean serious consequences, including product recalls or export bans. Keeping up with global requirements is key to maintaining access to international markets.