Supply chain integrity as a market access strategy

In October 2025, at least 23 children died across Madhya Pradesh and Rajasthan after consuming a contaminated pediatric cough syrup. Lab tests confirmed that the product contained 48.6% diethylene glycol (DEG), an industrial solvent used in brake fluids and antifreeze, against the permissible limit of 0.1 per cent in oral liquid formulations. The manufacturer had reportedly sourced 50 kilograms of industrial-grade propylene glycol from local chemical traders and paint dealers, without invoices, instead of using certified pharmaceutical suppliers.

This was not an isolated failure of one small manufacturer. It was a systems failure of procurement, of ingredient traceability, of raw material authentication, and of supply chain oversight. And it happened in a country that supplies over 20 per cent of the world's generic medicines.

India's pharma sector stands at an inflection point. The question is no longer whether anti-adulteration is a priority. The question is whether the industry treats it as a compliance burden or recognises it for what it truly is: a market access strategy.

Research published in the International Journal of Pharmaceutical Sciences in 2026 describes India's pharma supply chain as carrying critical structural vulnerabilities, over 70 per cent dependence on Chinese APIs, fragmented cold chain logistics, and GMP compliance gaps that disproportionately affect MSMEs. These are not new concerns, but the Madhya Pradesh tragedy gave them a human face.

The deeper problem is the ease with which substandard inputs enter the pharmaceutical manufacturing chain. When procurement decisions are driven purely by cost, and when supplier verification is weak or absent, industrial-grade solvents can be passed off as pharmaceutical-grade ones. The supply chain does not lie but it also does not self-correct. Without robust authentication and traceability systems embedded at every node, the chain remains only as strong as its most vulnerable link.

The CDSCO later confirmed that three separate cough syrups from three different manufacturers contained DEG contamination. That detail matters. This was not one bad actor. It was a pattern, suggesting systemic gaps in how raw materials are sourced, verified, and used across a segment of the industry.

What the counterfeit landscape tells us
The 2025 ASPA-Crisil report on the State of Counterfeiting in India documented 521 instances of healthcare product counterfeiting between 2018 and 2025. Incidents peaked during the Covid-19 period, when demand surged for PPE kits, masks, and medicines, and counterfeiters filled the gap with fake or substandard products. Even after the pandemic, the number stabilised at 52 annually in both 2024 and 2025 - nearly double the 27 incidents recorded in 2018.

Consumers are acutely aware of this problem. The survey of 1,639 respondents across nine cities found that 80% believe counterfeiting in the pharmaceutical sector has increased over the past 12 months. It reflects a genuine erosion of trust in pharmaceutical products that India cannot afford, particularly as a country seeking to expand its global pharmaceutical footprint.

What is equally telling is consumer behaviour. Only 52 per cent of respondents check the authenticity of healthcare products before purchasing, lower than for any other sector surveyed, including FMCG and automotive parts. This paradox, where consumers are simultaneously more worried and less equipped to verify authenticity, underscores the weight of responsibility that falls on manufacturers and regulators.

Anti-adulteration as a market access imperative
The conventional framing of anti-adulteration as a domestic public health issue misses a larger strategic dimension. India's pharmaceutical exports are under sustained scrutiny from major regulatory agencies, including the US FDA, the European Medicines Agency, and the UK's MHRA. Import alerts, warning letters, and facility bans have repeatedly disrupted Indian pharma's access to premium global markets. The compliance failures that trigger these actions are almost always rooted in supply chain integrity gaps, from substandard raw materials to inadequate quality documentation.

Track-and-trace systems that provide end-to-end visibility of ingredients, batch numbers, supplier credentials, and movement records are no longer optional for manufacturers seeking regulatory approval in regulated markets. The European Union's Falsified Medicines Directive already mandates serialisation and verification at the point of dispensing. The US Drug Supply Chain Security Act requires full product traceability by 2026. India's own pharmaceutical export guidelines increasingly require documentation that demonstrates supply chain integrity.

Manufacturers that invest in authentication and traceability today are not spending on compliance, they are investing in market access. The ability to demonstrate that every ingredient was sourced from a verified supplier, moved through a documented chain of custody, and arrived intact and unadulterated at the point of manufacturing is fast becoming the price of entry into regulated export markets.

Regulatory architecture needs to catch up
In 2023, the government took a meaningful step by making it mandatory for manufacturers of the top 300 drug formulation brands to display QR codes on labels for tracking and tracing purposes. The Drugs (Amendment) Rules, 2022 further mandated machine-readable information on API packaging, covering manufacturer identity, batch data, and storage conditions. These are foundational moves, but their scope remains limited.

India still lacks an overarching mandatory framework for supply chain authentication across the pharmaceutical sector. The responsibility of enforcement is split between state and central authorities, leading to coordination gaps and delayed action, a structural problem that the Madhya Pradesh case once again exposed. While large, organised manufacturers have adopted ERP-linked procurement and serialisation systems, the unorganised segment, which supplies a significant share of domestic medicines and API intermediates, operates in a largely documentation-free environment.

The proposed National Drug Policy and ongoing GMP reform discussions offer an opportunity to mandate end-to-end supply chain authentication as a baseline requirement, not a premium standard adopted only by export-oriented manufacturers.

Authentication technology is ready - adoption must follow
The technology ecosystem to support supply chain integrity in pharma is already mature. Serialisation and coding solutions allow unique product identification at the unit level. Blockchain-based systems provide immutable records of ingredient provenance and supply chain movement. QR codes linked to central verification databases allow distributors, retailers, and even consumers to authenticate products in real time. IoT-enabled cold chain monitoring ensures that temperature-sensitive medicines are not compromised during storage and transit.

What has lagged is adoption, particularly among tier II and tier III manufacturers who may lack the capital or technical capacity to implement these systems. This is precisely where industry bodies, government support, and phased regulatory mandates must play a role. The PLI scheme for pharmaceuticals could be expanded to incentivise investment in authentication infrastructure. ASPA's membership, which spans authentication solution providers across holography, digital verification, and track-and-trace, stands ready to support this transition.

Rebuilding trust is a national imperative
India's reputation as the pharmacy of the world is built on volume, affordability, and scientific capability. But reputation at global scale requires trust, and trust requires demonstrable integrity across the supply chain. The deaths of 23 children from a contaminated cough syrup are a human tragedy. They are also a reminder that anti-adulteration is not a compliance checkbox.

Every instance of substandard or adulterated medicine that reaches a patient, whether a child in Rajasthan or an export customer in Africa or Southeast Asia, represents a failure of the system that India has committed to build and maintain. Rebuilding and protecting that trust requires making supply chain integrity a strategic priority, not an afterthought.

The industry that gets this right will not just survive regulatory scrutiny. It will earn the market access, the pricing power, and the global credibility that India's pharma sector has long been capable of but has yet to fully claim.