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Pharma quality norms regulations a shot in arms for established players

ICICIdirect Research 26 Dec 2025 DISCLAIMER

The government’s Schedule M manufacturing norms, which is India's pharma manufacturing version as per WHO global manufacturing standards in terms of quality, safety, hygiene, and documentation, are set to be implemented from 1st January 2026. All the Pharma manufacturers are required to upgrade their facilities by 31st December 2025 as per the norms.
Originally thought and communicated to all the Indian pharma manufacturers in 2022, the extended deadline is set to expire on 31st December 2025, and the government is going to stick to the same.
As per government, scores of quality related lapses and tragedies within India and abroad can tarnish India’s image as the Pharmacy of the World which has forced the government to ask for strict and timely compliance with schedule M norms.
While this implementation will not be a problem for large players which also cater to the regulated exports markets, most of the smaller players especially the MSME units, are certainly going to face problems. The estimated cost of compliance upgrades ranges between ₹50 lakh to ₹2.5 crore depending on the size of the unit.
Over 60% of India’s ~8,500 registered small and medium pharmaceutical units could be compelled to cease operations due to non-compliance with revised Schedule M rules. These units together account for an estimated ₹75,000 crore of the ₹2.5 lakh crore domestic pharma market.
This development could provide incremental growth avenues for established pharma players with domestic franchise even considering a smaller swing. We expect renewed focus on domestic manufacturing by established players- a case in point is Sun’s ₹ 3000 crore proposed greenfield outlay.  
Companies with strong domestic franchise remain our preferred picks - Sun Pharma TP - ₹1,965; Ajanta Pharma TP - ₹3,000; and Ipca Labs TP - ₹1,660.

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