Can India cut $5b in annual medicine waste?
Drug losses expose gaps in recalls, take-backs, and traceability.
India’s pharmaceutical sector is losing about $5b (₹48,000 crore) a year to expired, unused, and substandard medicines, exposing gaps in how drugs are tracked, recalled, and recovered.
“At the core of these inefficiencies is the absence of mandatory recall systems, medicine take-back mechanisms, digital traceability, and reverse logistics infrastructure,” Primus Partners Private Ltd. said in a July report.
The losses include $317.3m from government stock expiry and overstocking, about $2.1b to $3.15b from unused household medicines, $735.3m to $892.9m from substandard and spurious drugs, and $525.2m to $945.4m from treatment failures, it said.
The total represents about a quarter of India’s $21.15b (₹201,372 crore) in pharmaceutical consumption in fiscal year 2023-2024.
The recall gap is also reflected in the Drug and Medical Device Litigation Report published by International Comparative Legal Guides in April. Indian regulators can order drug recalls, but there is no law that requires them to recall drugs in specific circumstances.
The Central Consumer Protection Authority may order recalls under the Consumer Protection Act, but is not required to do so, according to the report. Drug-related harm is generally pursued through product liability claims rather than a recall-specific process.
Courts often use terms such as “misbranded” and “spurious” drugs when deciding whether a company is liable for harm, the report said. This means the system often addresses problems after patients are harmed rather than requiring drugs to be withdrawn earlier.
Primus proposed mandatory drug recalls and medicine take-back programs that use existing infrastructure to recover medicines and reduce waste.
Questions to ponder:
- What regulatory changes are needed to make drug recalls mandatory rather than discretionary in India?
- How can a nationwide medicine take-back system be practically implemented across urban and rural areas?
- Who should bear the cost of reverse logistics and safe disposal—the government, manufacturers, or consumers?
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EXPERT OPINION
From a healthcare cost standpoint, medicine waste is a double penalty: it drains operating margins and signals gaps in patient care quality. To curb this $5B leakage without relying on regulatory shifts, hospital leaders should focus on end-to-end operational efficiency. This means integrating real-time EHR prescription data into pharmacy procurement to prevent overstocking, implementing strict floor-level batch tracking to enforce First-Expiry, First-Out (FEFO) protocols, and expanding pharmacist-led medication reconciliation at discharge. By treating waste reduction as a core clinical and financial KPI, health systems can protect operating margins while improving patient compliance.