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Legal aspects to maintain quality standard of drugs


Rajdutt Shekhar Singh, Partner, Singh & Associates, talks on the laws governing the pharma sector and recent intitiatives to improve quality

The Indian pharma industry is presently the third largest in the world (volume wise). In terms of value, the size of the industry is approximately Rs 200,000 crores ($30 billion), out of which more than half is exported to different countries across the globe.1 The Drugs and Cosmetics Act, 1940 (D&C Act) and Drugs and Cosmetics Rules, 1945 (D&C Rules) regulate the import, manufacture, distribution and sale of drugs in India. All the drugs (either imported or manufactured in India) are required to comply with the standards as specified in the Second Schedule of the D&C Act (Schedule). The Schedule provides details of the class of drugs and the standards to be complied with by such class of drugs. For instance, as per the Schedule, drugs which are included in Indian Pharmacopoeia (IP), such drugs are required to comply with the standards of identity, purity and strength specified in the edition of the IP (and such other standards as may be prescribed).

Similarly, drugs which are not included in the Indian Pharmacopoeia but are included in the official Pharmacopoeia of any other country, in such cases standards of identity, purity and strength specified for drugs in the edition of such official Pharmacopoeia of any other country (and such other standards as may be prescribed) are required to be complied with. In addition, import2 and manufacture 3of drugs (which are not of standard quality, misbranded, adulterated or spurious) are prohibited under the D&C Act.

In order to provide stringent penalties for manufacture of spurious and adulterated drugs, the D&C Act was amended in 2008 and various offences have been made cognizable and non-bailable under the D&C Act. In addition, the amount of penalty has also been increased from Rs 10,000 to Rs 10 lakh or three times value of the drugs confiscated, whichever is more.

However, after introduction of the aforesaid amendments in the D&C Act, the Central Drugs Standard Control Organisation (CDSCO) formulate guidelines4 as per which the CDSCO categorised drugs (which are not of standard quality) into three categories viz. Category A (Spurious and Adulterated Drugs), Category B (Grossly sub-standard Drugs) and Category C (Minor Defects).

The Guidelines inter alia provide directives to the State Drugs Authorities which states as follows, “Care should be taken that while violations with criminal intent or gross negligence leading to serious defects are dealt with heavy hand, the violations involving minor variations in quality by licensed manufacturers are resolved through administrative measures”. Accordingly, the Guidelines inter alia state that in the case of not of standard quality reports because of minor defects 5 arising out of variations from the prescribed standards or contraventions of other provisions of chapter IV of the D&C Act, administrative measures including suspension/ cancellation or compounding of offences may be resorted to.

Further, Ministry of Health and Family Affairs devised a reward scheme for whistle blowers in the fight against the menace of spurious or fake drugs, cosmetics and medical devices.6 This reward scheme provides rewards to the informers who provide specific information to the designated authorities leading to the seizures of spurious, adulterated, misbranded and not of standard quality drugs, cosmetics and medical devices. As per this reward scheme, reward is to be given only when there is a confirmation of the seizure of spurious, adulterated and misbranded drugs, cosmetics and medical devices by the designated officers of the CDSCO. There is a provision that the reward of maximum of up to 20 per cent of the total cost of consignments seized is to be payable to the informer which should not in any case exceed Rs 25 lakhs in each case.

In order to spread awareness on real time basis regarding drugs which are not of standard quality, the CDSCO publishes drug safety alert on monthly basis on its website. The monthly publication of drug safety alert includes a list of drugs which are declared as ‘Not of Standard Quality, spurious, adulterated or misbranded along with the details of batch No. and manufacturing site. The list also mentions the details of testing laboratories which perform the quality test of drug along with the reason of failing the test for the particular drug. In addition, where any person has been convicted for contravening any of the provisions of the D&C Act or Rules made there under (including without limitation manufacturing of drugs not of standard quality), the stock of the drug in respect of which the contravention has been made is liable to confiscation. At the same time, the regulatory regime also provides compounding of certain offences 7under the D&C Act.

In November 2012, the CDSCO introduced guidelines on recall and rapid alert system for drugs.8 These guidelines are applicable to all quality defective product reports and to all reported incidents of safety and efficacy received for all drugs including vaccines and biological. The said guidelines provide recall classification and recall procedure and all the manufacturers, importers, stockists, distributors, retailers are required to follow these guidelines for recalling of defective drugs.

Drugs regulators’ recent initiatives

The central drugs regulator, CDSCO issued draft Standard Operating Procedures (SOPs) for handling of not of standard quality drug samples. As per the draft SOPs, whenever the analysis result of any sample is not within the range of specified limits, it is referred to be Not of Standard Quality (NSQ)/ out of specification (OOS).9 Further, as per recent media reports, the Drug Controller General of India (DCGI) is preparing a plan to ensure that drug testing laboratories meet the prescribed good laboratories practice (GLP) norms.10 It is also noted that the Maharashtra Food and Drugs Administration cancelled 58 manufacturing licenses and suspended 145 licenses based on various inspections carried out on manufacturing units in Maharashtra.11


In the recent times, Indian Drugs Regulators have become more vigilant to ensure that drugs manufacturers maintain standard of quality of drugs. At the same time, Drugs Regulators are also minded of the fact that drugs manufacturers (whose drugs qualify as a drug not of standard quality due to minor defects) should not be subject to stringent penalty. India has emerged as one of the most preferred destinations for export of drugs and various Indian pharma companies have US Food and Drug Administration (USFDA), MHRA (UK), TGA (Australia), MCC (South Africa), Health Canada etc. approved plants, for generic drugs manufacture. Ironically, USFDA raised concerns on the quality and efficacy of medicines being sold in India. In the backdrop of the stringent penal provisions, drugs manufactures are required to carry out necessary checks and balances as per the provisions of the D&C Act and Rules for maintaining required standard of quality of drugs and they should be encouraged to initiate legal and regulatory audits on regular intervals.

2. Chapter III of the D&C Act.
3. Chapter IV of the D&C Act.
4. Guidelines for taking action on samples of drugs declared spurious or not of standard quality in the light of enhanced penalties under the Drugs and Cosmetics (Amendment) Act, 2008.
5. As per the Guidelines, examples of minor defects are: Broken or chipped tablets, presence of spot/discolouration/ uneven coating, cracking of emulsions, clear liquid preparations showing sedimentation, Change in colour of the formulation, Slight variation in net content, formulations failing in weight variation, formulations failing to respond to the colour test, isolated cases of presences of foreign matter, labelling error including nomenclature mistake, Rx, NRx, XRx, Red Line, Schedule H. Caution, Colour etc.
6. Whistle%20Blowe%20(3).pdf
7. Section 32-B of the D&C Act.
8. writereaddata/Guidlines%20on%20Recall.pdf

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