India & China Pharma Shifts: Regulation & Procurement Reshape Global Supply Chains

LONDON, UK – November 14, 2025 – The global pharmaceutical industry is currently undergoing a period of significant transformation, particularly within the rapidly evolving markets of India and China. Recent developments – including stricter regulatory oversight in India and the continued expansion of China's centralized procurement program – are poised to reshape supply chains, pricing strategies, and investment opportunities across emerging markets. These changes present both challenges and opportunities for pharmaceutical companies, contract manufacturing organizations (CMOs), and investors alike.

India's Regulatory Overhaul: Balancing Quality with Industry Concerns

India, long recognized as a major pharmaceutical manufacturing hub and a key supplier of generic medications, is undergoing a substantial regulatory overhaul led by the Central Drugs Standard Control Organisation (CDSCO). The CDSCO’s recent initiatives, designed to enhance drug quality, transparency, and alignment with international standards, include new guidelines for drug approvals, stricter pharmacovigilance requirements, and the implementation of a revised Schedule M Good Manufacturing Practices (GMP) standard. While these reforms are broadly welcomed as necessary steps to improve patient safety and product efficacy, they have also sparked considerable debate and concern among Indian pharmaceutical manufacturers, particularly Micro, Small, and Medium Enterprises (MSMEs).

“The intention behind these new regulations is absolutely right. We need to ensure that the drugs we produce are of the highest quality and meet global standards,” explained one industry insider. “However, the speed at which these changes are being implemented, coupled with the significant financial burden they impose on smaller companies, is creating a very difficult situation.”

The core of the criticism revolves around the stringent new Schedule M GMP norms and the aggressive implementation timeline. Many MSMEs fear they will be unable to meet the updated standards without substantial investment in infrastructure and technology, potentially forcing them to close their doors. “The cost of upgrading facilities to meet these new requirements is simply prohibitive for many smaller companies,” one MSME owner stated. “We’re facing a real risk of losing a significant portion of our manufacturing capacity.” The CDSCO has come under pressure to provide financial assistance and extend implementation deadlines, but the agency maintains that the reforms are essential to maintain the integrity of the pharmaceutical supply chain and protect public health.

China's Procurement Program: Driving Down Prices & Reshaping the Market

Meanwhile, in China, the government’s centralized drug procurement program continues to exert a powerful influence on the pharmaceutical market. This program, designed to lower drug prices and increase access to affordable medications, involves bulk purchasing of pharmaceuticals through competitive bidding. The 11th round of the program, completed in October 2025, further solidified the program’s impact, leading to significant price reductions and increased competition among pharmaceutical companies.

The centralized procurement program has created a challenging environment for multinational pharmaceutical companies, which often struggle to compete with generic manufacturers on price. “The program has undoubtedly driven down prices, but it has also squeezed profit margins for many companies,” explained one analyst specializing in the Chinese pharmaceutical market. “MNCs are being forced to re-evaluate their strategies and focus on innovative products and premium services to maintain their market share.”

The program has also prompted a consolidation within the pharmaceutical industry, as companies seek to leverage economies of scale and improve their cost competitiveness. “We’re seeing more mergers and acquisitions as companies try to strengthen their position in the market,” stated another industry observer. “The program is forcing companies to become more efficient and innovative in order to survive.”

Emerging Market CMOs: Adapting to a New Reality

The changing regulatory and procurement landscapes in India and China are also having a significant impact on contract manufacturing organizations (CMOs) operating in these emerging markets. CMOs are facing increased pressure to comply with stricter quality standards and offer competitive pricing. Those that can successfully adapt to these challenges are well-positioned to benefit from the growing demand for pharmaceutical manufacturing services.

“The regulatory environment is becoming more complex, but it’s also creating opportunities for CMOs that have the expertise and resources to navigate these changes,” stated one CMO executive. “We’re seeing increased demand for our services as pharmaceutical companies look to outsource manufacturing to reduce costs and improve efficiency.”

CMOs are also investing in new technologies and capabilities to meet the evolving needs of their clients. This includes investments in advanced manufacturing techniques, such as continuous manufacturing and single-use technologies, as well as expertise in complex drug formulations and biologics manufacturing. The ability to offer a comprehensive range of services, from early-stage development to commercial manufacturing, is becoming increasingly important for CMOs seeking to differentiate themselves in a competitive market. The trend towards regionalization of supply chains is also benefitting CMOs located in emerging markets, as pharmaceutical companies seek to diversify their manufacturing base and reduce reliance on single suppliers.