Enforcement measures under the Drugs & Cosmetics Act, 1940 – Part 11: Who manufactures sub-standard drugs

Posted by on Apr 28, 2016 in Blog | 4 comments

On the rare occasion that the captains of the Indian pharma industry accept that there are problems with the quality of medicine being produced in the country, they lay the blame at the doorstep of the small pharma companies. We are told that it is only the fly by night operators who responsible for giving the entire industry a bad name. This is however not true.

It is altogether a different matter that legally, small manufacturers have no legal obligation to prove that their product is therapeutic in the first place in order to obtain a license to make drugs. And it is a well known fact that even large companies use these small to medium manufacturers as “loan-license” facilities, where they outsource their manufacturing for what are called “less regulated markets” which includes India. These small to medium manufacturers often obtain their manufacturing licenses from State Licensing Authorities (SLAs) which are ill-equipped to regulate the product these companies make because of both sheer competence and political patronage. Therefore, these small to medium companies become easy targets in the industry’s propaganda to divert attention from their own compliance issues, much like what the industry does to divert attention toward counterfeit (Spurious) drugs; when the real problem in India is not spurious, but sub-standard drugs.

During the course of our research over the last year, we’ve come across a number of big names among the Indian pharmaceutical industry who have been involved in manufacturing and selling of sub-standard drugs to the people of India. To avoid allegations of bias or prejudice, we will limit this discussion to the names of only those companies which have been blacklisted by government departments. Let me first explain how these blacklists are compiled.

In order to bid for tenders put out by government agencies, it is necessary for pharmaceutical manufacturers to register themselves with the agencies in question. Most of these manufacturers can register only if they meet certain qualification criteria such as minimum annual revenue; the presumption amongst the procurement departments in these agencies is to correlate high turnover to the ability of the manufacturer to employ better quality control in their manufacturing process.

After medicine is procured and delivered, most government agencies will draw samples from each batch and have them tested at independent laboratories. If a batch tests as sub-standard during these tests, the supplier may be ‘de-registered’ or ‘blacklisted’ from bidding for future contracts for a few years or permanently. The degree of punishment under blacklisting/deregistration norms depends on the quality of the defect in the product they procure. A firm can also be blacklisted for failing to deliver on time or for not fulfilling the tender conditions but most of the cases discussed below are very likely related to quality issues. Unfortunately, not all the blacklists discussed below provide exact reasons for blacklisting a company, but amongst the lists which reveal the reason, the quality issue is the main reason for this punitive action.

One can access the blacklist of the Medical Stores Organisation (MSO), which conducts public procurement for the Ministry of Health here. There are several ‘big names’ on this list; which means that they cannot supply the products for which they have been blacklisted. Zest Pharma, USV Ltd., Unichem Lab Ltd., Nestor Pharmaceuticals, Zee Laboratories, Alkem Laboratories Ltd., Abbot Healthcare Pvt. Ltd., Centaur Pharmaceuticals are some examples of big names in the India pharmaceutical industry in this list; with several of these companies even exporting drugs to other countries across the world. Even public sector pharmaceutical companies, which function under government control are on the list: Hindustan Antibiotics Ltd., Bengal Chemicals & Pharmaceuticals and Karnataka Antibiotics & Pharmaceuticals Ltd. IDPL (Tamil Nadu) figure prominently. Several of these firms were blacklisted for ‘Category A’ defects – which are the most serious kind.

A second revealing blacklist is that of the Western Railways. The list which can be accessed here is slightly dated but it still features several big names: Ind-Swift Ltd., Alkem Laboratory Ltd., Themis Medicare Ltd., Akum Drugs & Pharmaceuticals, Natco Pharma, Macleods Pharmaceuticals, Glenmark Pharmaceuticals, Perennial Medicare, Zydus Healthcare. A more recent blacklist of the Northwestern Zone which was procured by us under the RTI Act, lists RPG Lifesciences (blacklisted for Atorvastatin), Biocon & Swiss Garnier Life Sciences (blacklisted for Rosuvastatin). The list can be accessed over here. The blacklist maintained by the North-East Railways features names like Abbott Healthcare, Sandoz Pvt. Ltd., Ind-Swift, Alkem Laboratories Ltd., Alembic Pharmaceuticals and others. The list can be accessed over here.

The blacklist maintained by the State Government of Orissa and Rajasthan can be accessed over here and here. The blacklists maintained by the Tamil Nadu Medical Services Corporation and the Gujarat Medical Services Corporation Ltd. can be accessed over here and here. The West Bengal government’s blacklist can be accessed over here. All of these lists feature several big names from the Indian pharmaceutical industry.

These lists are but an example of the blacklists maintained by government departments across the country. Unfortunately, several organisations like the Railways do not maintain a consolidated list – instead each railway zone maintains its own blacklist list. Why the procurement departments within the same organization (Indian Railways) do not benefit from this lack of sharing of information is a sad situation.

So the next time somebody claims that it’s the small companies muddying the waters for the entire industry, I hope you point them to the blacklists maintained by public authorities within the Indian government itself.  The industry’s propaganda machine is very effective; it has created a false narrative that the small and medium size companies are the root of the problem; you can see for yourself what the reality is.

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Enforcement measures under the Drugs & Cosmetics Act, 1940 – Part 10: Lack of consistency among states suspending manufacturing licences

Posted by on Apr 24, 2016 in Blog | 0 comments

In addition to the process of criminal prosecution to punish violators of the D&C Act, the Drugs & Cosmetics Rules, 1945 also provide for suspending or cancelling the manufacturing licences of the company found to have manufactured NSQ drug. As explained in an earlier post on DCC Guidelines for Prosecutions, drug inspectors have been advised to opt for suspension/cancellation of licences in most NSQ cases, rather than opt for criminal prosecution. Given that suspensions/cancellations are the preferred mode of enforcement in India, its necessary to understand how this system actually works in practice.

The relevant rule in this regard is Rule 85(2) of the Drugs & Cosmetics Rules, 1945.

(2) The Licensing Authority may, for such licences granted or renewed by him, after giving the licensee an opportunity to show cause why such an order should not be passed, by an order in writing stating the reason therefor, cancel a licence issued under this Part or suspend it for such period as he thinks fit, either wholly or in respect of some of the substances to which it relates, [or direct the licensee to stop manufacture, sale or distribution of the said drugs and an Inspector] if, in his opinion, the licensee has failed to comply with any of the conditions of the licence or with any provision of the Act or Rules thereunder.

This power is exercised by Drug Controllers in individual states, since it is State Governments and not the Central Government which licences drug manufacturing in India. This Rule states that the licensing authority may, after giving the licensee an opportunity to show cause, cancel a licence issued or suspend it for such period as he thinks fit either for the facility or for manufacture of a specific drug.

The problem with this provision is that since each State Licensing Authority (SLA) operates independently of the others, there is no uniformity in the duration for which licences are suspended or cancelled. We have near certain information of this practice from copies of the Register of NSQ drugs maintained by the Karnataka Drugs Control Department (KDCD) that we procured under the Right to Information Act, 2005. This Register contains details of all the NSQ drugs detected by the KDCD within the state of Karnataka and the action taken against them by their respective drug controllers. Since a majority of the NSQ drugs were actually being manufactured outside the state, the KDCD did not have the power to suspend or cancel licences for most of these manufacturers. In such cases, the Drug Inspectors from Karnataka would write to their counterparts in the other states and request them for action to be taken against the manufacturers located in those states. The drug inspector in the home state of the manufacturer would then write back to the Karnataka Drug Inspector informing them of any action taken against the manufacturer in terms of either suspension or cancellation of licensees. The action taken by these other SLAs would be jotted down in the register in a hand-written format.

Below is a graphical representation of the states from which the KDCD detected NSQ drugs in the year 2012-13.

Graph 1

Here is another graphical representation of the states from which the KDCD detected NSQ drugs in the year 2011-12.

Graph 2

The two states accounting for the largest number of manufacturers of NSQ drugs every year in Karnataka are Himachal Pradesh and Uttarakhand, with Madhya Pradesh coming a close third. From the details contained in the Registers, it is quite obvious that there is no consistency amongst different states in the manner in which licences of erring manufacturers are suspended. For example, while states like Himachal Pradesh suspend licences from anywhere between 15 days to 3 months, states like Uttarakhand would suspend licences for a mere 20 days while a state like Gujarat would suspend licence for just 1 day. This large scale discrepancy in the duration for which licences are suspended in different states is because there are no rules notified by the Ministry of Health and Family Welfare under the D&C Act requiring all SLAs to follow uniform standards while suspending licences. Thus each SLA appears to exercise its own discretion while suspending licences.

A second and more serious issue with the practice of suspending licences is whether SLAs actually enforce their orders suspending manufacturing licences. Typically if these suspension orders were being aggressively enforced, one would expect to find several cases in the High Courts by pharmaceutical companies challenging the suspension orders and seeking stay orders. However a search of the reported judgments of the High Court for the state of Himachal Pradesh (the biggest source of NSQ drugs) did not reveal a single case where the issue of a suspended licence was challenged in the High Court. Given how combative the industry is when it comes to any punitive action affecting their profits as we see from the response to the FDC ban, it’s strange that none of the suspensions have ever been challenged before the High Courts. This calls into question how effectively are the SLAs enforcing their own orders of holding these errant manufacturers accountable for their action in flooding the market with substandard drugs.

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Enforcement measures under the Drugs & Cosmetics Act, 1940 – Part 9: The curious case of missing files

Posted by on Apr 21, 2016 in Blog | 0 comments

One of the critical issues raised in the 59th report of the Parliamentary Standing Committee on Health was the issue of missing files at the CDSCO. The Committee had summoned several files pertaining to the drug approval process in India from the government. Three critical files, pertaining to the approvals of three specific drugs: pefloxacin, lomefloxacin and sparfloxacin, were however missing from the government’s records. As noted by the Standing Committee, all three drugs were controversial and had either not been approved or had been approved and withdrawn in developed countries with much better drugs regulatory systems. The exact observations of the Committee are reproduced as follows:

7.12 Out of 42 drugs picked up randomly for scrutiny, the Ministry could not provide any documents on three drugs (pefloxacin, lomefloxacin and sparfloxacin) on the grounds that files were non-traceable. All these drugs had been approved on different dates and different years creating doubt if disappearance was accidental. Strangely, all these cases also happened to be controversial drugs; one was never marketed in US, Canada, Britain, Australia and other countries with well-developed regulatory systems while the other two were discontinued later on. In India, all the three drugs are currently being sold.

Since the files were missing, the Committee was unable to examine the conditions of approval. It merely ordered the government to reconstruct the files.

For those of you familiar with the workings of government offices, the issue of missing files will not come as a particular surprise. In most cases, files go missing due to either corruption or inefficiency of the office in question. In 2011, the Trade Mark Registry had famously reported missing more than 44,000 files to the Delhi High Court. In the present case regarding the missing files at the CDSCO, the government quietly ‘reconstructed’ the files without investigating how exactly the files went missing in the first place. This is contrary to the guidelines put in place by the courts and the Central Information Commission (CIC).

Under the Public Records Act, 1993 each government office is required to maintain records in a prescribed format. Section 7 of this legislation requires the Records Officers in every department of government to take “appropriate action” in case files go missing. The Central Information Commission (CIC) which hears complaints and appeals under the Right to Information Act, 2005 had ruled in the case of Om Prakash v. Land & Building Dep. GNCTD, Delhi (CIC/DS/A/2013/001788SA) that all cases of missing files had to be thoroughly investigated and responsibility for the missing files had to be fixed on a public servant. The CIC’s judgment also cites a Delhi High Court judgment where the court held that even if the information was found through other means, responsibility had to be fixed for the missing files. If criminality, such as theft or corruption in suspected the missing files case, a FIR is required to be filed with the local police station that has the jurisdiction over the office.

In the case of these three missing files, the government never filed a FIR or conducted a criminal investigation to fix responsibility for the missing files. We filed a RTI application with the Ministry of Health to determine the status of the files and more specifically on the point of whether an investigation had been conducted into the cause that made these files go missing. The Ministry answered a couple of questions on the status of the files but transferred the main question of whether the investigation had been conducted to the CDSCO. The one line reply from the CDSCO is as follows: “No such formal complaint was conducted; however, continuous efforts were made by CDSCO to trace out these files at various locations where the old files were stored”. It reminds me of the time when the files related to allocation of coal blocks went missing and the people of India received similar responses from the government.

I had raised the issue of the missing files in the PIL to the Supreme Court; my concern is not about just these three files, but the lack of any proper mechanism within the CDSCO to maintain records. The PIL sought directions to be issued to the Comptroller & Auditor General (CAG) to conduct an audit of CDSCO’s file storage and archival system. It’s very likely that the three missing files are merely representative of a larger systemic issue at the CDSCO and we were hoping an external audit by an experienced agency like CAG would help identify the real issues. Unfortunately the Supreme Court dismissed the PILs on the grounds that we were raising mere academic issues. If the national regulator cannot do something as basic as maintain proper records, isn’t public health under jeopardy in India?  I wonder how this is an academic issue.

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Enforcement measures under the Drugs & Cosmetics Act, 1940 – Part 8: Why dont pharma companies recall drugs that fail testing in India

Posted by on Apr 18, 2016 in Blog | 4 comments

One of the most significant failings of the Indian drug regulatory system is its failure to put in place a mechanism to recall NSQ drugs from the market. Such recalls may be necessitated either by post-marketing surveillance or alternatively due to internal review of manufacturing processes within the pharmaceutical companies. For example, statistical quality control on a series of batch records may indicate trends which are not easily recognizable on single batch records. Likewise, long term stability studies may reveal that a particular batch degrades quicker than what is printed on the label. In such cases, a robust and traceable process to account for all commercial product present in the market so that it can be returned and destroyed is a key component of the regulatory oversight.

Indian pharma companies regularly conduct drug recalls in the US and EU. In the recent past, there have been several cases of large pharmaceutical companies like Sun Pharma, Dr. Reddy’s and Wockhardt recalling, hundreds if not thousands of units of their drugs from the American market. However, I have never seen similar drug recalls being affected in the Indian market. The key reason why we do not see such action in India is because the Indian drug regulatory law does not have a legal framework mandating such recalls. Every time a drug is declared NSQ by a government analyst, there is no legal requirement under the law for the manufacturer to initiate a nation-wide recall and there is no procedure to monitor such recalls. The futility of the Indian system was pointed out in the 59th Standing Committee report when it noted:

“15.5 By the time a sample is tested, a large number of packs get sold out with undeterminable injury to patients. There is no effective method of recalling unsold stocks lying in the distribution network. This cannot be allowed to go on.”

At the time of this report, the Committee was pushing for more transparency – in particular it wanted publication of the NSQ drugs in newspapers. I extract the relevant paragraphs below:

“15.11 The Committee recommends that once a batch of a drug is found to be substandard and reported to CDSCO, it should issue a press release forthwith and even insert paid advertisements in the newspapers apart from uploading the information on the CDSCO website. Retail chemists should be advised to stop selling unsold stocks and return the same to local Drugs Inspectors as per rules. The Committee understands that at least two State Drug Authorities, that of Maharashtra and Kerala, have taken the initiative to upload information on spurious and sub-standard drugs on their websites on a monthly basis. These are welcome measures worth emulating by other states and the Centre.”

The Committee’s singular focus on this issue helped in creating the current ‘Drug alert’ system wherein the CDSCO publishes information on its website about drugs declared NSQ in central government laboratories. Such a system is pretty useless unless integrated with the state government labs, since the states are the ones which conduct a lion’s share of testing. Currently, some state regulators from states like Gujarat and Maharashtra do make available the most recent NSQ data on the XLN website. Very few people, even within the industry, know of this website. The Standing Committee was very cognizant of these limitations, especially the consequence of only the CDSCO making information available on its websites. In its 66th report had pertinently stated:

“3.195 The Committee notes that to begin with CDSCO has started the drug alert system in respect of drugs found to be not of standard quality, spurious, adulterated, etc. by central drug testing laboratories. Furthermore, the Ministry is considering the feasibility of placing advertisements of such cases regularly in the newspapers. The Committee is convinced that this is a herculean task, which can be achieved only when the efforts of the Centre and State Governments are fully synergized. Drug alerts of evaluations by central drug laboratories though welcome would not take care of this acute problem in entirety as the state drug laboratories handle major volumes of such evaluations. The Committee, therefore, desires the Ministry to take up this matter with State Governments on a highly proactive basis to ensure its early fructification. It also desires early decision by the Ministry on utilizing newspapers in this task.”

Some state regulators do send such information to newspapers which publish the information in small columns in their city editions, but this information is of little use given the level of inter-state commerce of drugs in India; a batch declared NSQ in Maharashtra may have also been partially sold to other states. The only way to fix this system is to have a nationwide recall system implemented and monitored rigorously by the CDSCO. In quite a coincidence, at about the same time that the 59th Report pointed out this issue to the government, the World Health Organisation (WHO) had raised the same red flag during its National Regulatory Assessment (NRA) of the CDSCO. As a result the CDSCO published for the very first time Draft Guidelines on Recall of Drugs. While some websites like RAPS have reported that the Guidelines are now in effect, we have not found any evidence to substantiate this claim. We do know for a matter of a fact that the draft guidelines were published on the internet for comments and were subsequently discussed at the 45th and 46th meetings of the Drugs Consultative Committee (DCC), held in February, 2013 and November, 2013. However, neither the public information officers in the CDSCO nor the state drug regulators seem to be aware of these guidelines when my attorney filed RTI applications with each of these authorities asking them whether they follow any particular recall guidelines.

In a RTI application filed on April 15, 2015 we asked the CDSCO the following questions:

“(i) Does the CDSCO have in place a mechanism to issue a safety alert or a product recall on the basis of a test report from a State Drug Controller which indicates that a product is not of standard quality?

(ii) Please provide copies of all such orders issuing safety alerts or product recalls in the last 2 years.

(iii) Are State Drug Controllers mandated to intimate the CDSCO every time they detect a drug which is not of standard quality? Please provide all such intimations received by the CDSCO in the last 2 years.”

The reply we received from the CDSCO can be accessed over here. There isn’t even a squeak about the Draft Guidelines.

In June 2015, we filed a second set of RTI applications where we asked the CDSCO the following questions (only the first is relevant):

“(i) Please provide the applicant with a copy of the guidelines or rules laid down by the CDSCO in order to issue “Drug Alerts” or “Recalls”.

(ii) Please provide the applicant with details of the action taken with regard to the ‘Drug Alerts’ issued by the CDSCO in April, 2014 i.e. does the CDSCO also prosecute the manufacturer? (Printout from CDSCO website enclosed herewith as Annexure A).”

The response, which can be accessed here is completely silent on the guidelines and speaks only of recalls.

We then repeated this exercise with a series of state drug regulators asking them the following two questions:

“(1) Does the Controller follow any specific rules or guidelines to recall a drug that is detected as being of ‘Not of Standard Quality’. Please provide the applicant with a copy of such rules of guidelines.

(2) What is the procedure followed by the Controller while deciding appropriate legal action when a sample is detected to be of ‘Not of Standard Quality’. Does the Controller initiate criminal prosecution in all cases or is suspension of licences enough. The PIO is requested to please provide the applicant with a copy of procedure/rules to be followed while deciding appropriate legal action in such cases.”

The responses from Maharashtra, Andhra Pradesh, Tamil Nadu, Karnataka, Uttarakhand & Himachal Pradesh are available in the legal section of this blog site. Each state gave us different answers – while HP and Karnataka refer to the DCC Guidelines referred to in my previous post, others like Maharashtra claim that recalls are governed by the Drugs & Cosmetics Act – both answers are wrong. The DCC guidelines don’t mention anything about drug recall and the D&C Act doesn’t deal with drug recalls. The authority in Tamil Nadu responded claiming that recalls were dealt with under Schedule M to the D&C Act – this schedule contains the GMP code and under which all manufacturers are required to have a recall system in place but such a system is very different from a mandatory drug recall system where a regulator supervises a nation-wide recall. Other countries like the USA, the UK, have a specific legal framework to govern such recalls. The only state which appears to have a rudimentary system in place is Andhra Pradesh. That state regulatory agency has some rules that mandate information sharing with all drug inspectors. However state-wise regulatory mechanisms are completely useless in India since drugs can flow across borders seamlessly – the only solution is a centralised recall procedure.

It was quite surprising for us to discover that none of the states are aware of the CDSCO’s draft guidelines. One of the PILs that I had filed had raised this issue – in fact this was the very first prayer sought for. Specifically, I had asked the Supreme Court to issue a writ to create binding rules on drug recalls. The reason for asking for such a prayer was because the draft CDSCO guidelines on recall lack the force of law behind them. There is no provision in the D&C Act empowering the CDSCO to draft guidelines. Delegated legislation is supposed to be enacted in the form of rules or regulations – the CDSCO however failed to cast these recall guidelines as rules. On the other hand the national regulator for food safety, the FSSAI, had long ago published specific regulations on recall of food which can be accessed here. The drug recall guidelines should have been drafted in a similar fashion, as rules or regulations rather than as filmsy guidelines.

It is interesting to compare the recall statistics of Indian pharama companies in the US to what they do in India. The US FDA provides information about product recalls and withdrawls in a transparent manner. One can search for the names of Indian pharma companies in this database to see how often and how many recalls have they issued in the US. Assuming the same competence and compliance in their manufacturing process for India, which we know is a false assumption, nevertheless, we ought to see a similar number of recalls of their product in our country as well. Comparing these statistics from the US to what these same companies do in India answers the question of what a legally binding, robust and effective recall procedure does for public health in India.

The enactment of a mandatory recall mechanism would have been a game-changer in the Indian context because the number of alerts generated by each state would have forced a wider debate on the reason behind such recalls. The biggest challenge we face in addressing this problem of substandard drugs is public awareness about their prevalence and outcomes from their use. A wider national debate about consolidated recalls across states would have raised this issue prominently in the media and public eye. Unfortunately, the Supreme Court thinks this is an academic issue and refused to hear my petition.




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Enforcement measures under the Drugs & Cosmetics Act, 1940 – Part 7: How the DCC sidestepped Parliament on mandatory criminal prosecutions

Posted by on Apr 13, 2016 in Blog | 0 comments

One of the most startling discoveries of our research into the manner of enforcement of drug regulatory laws in India is the fact that a majority of NSQ cases in India are not even prosecuted. Sadly, this lack of prosecution is not due to lethargy or incompetence but a conscious decision taken by the Drugs Consultative Committee (DCC) to dilute the quality standards that are prescribed in the Drugs & Cosmetics Act, 1940. These “Guidelines for taking action on samples of drugs declared spurious or not of standard quality in the light of enhanced penalties under the Drugs & Cosmetics (Amendment) Act, 2008” were decided in the 40th meeting of the DCC. The guidelines were meant to provide a framework for Drug Inspectors to enforce the Drugs & Cosmetics Act but in reality the final version of the guidelines provide a roadmap for circumventing and diluting the very mandatory standards prescribed by the Drugs & Cosmetics Act.

As per Section 16 of the Drugs & Cosmetics Act, 1940, standards of quality required to be followed in India for medicines are laid down in Schedule II to the Act. This schedule recognizes the standards described in the Pharmacopeia of various countries including the Indian Pharmacopeia. When samples are drawn from the market, they are tested as per the standards prescribed in the Pharmacopeia adopted by the manufacturer. These standards can be viewed on the labeling of the drug. For example, most Indian drugs will bear the phrase “IP” to demonstrate that they are following the standards laid down in the Indian Pharmacopeia. The Indian Pharmacopeia provides a reference standard, which is established and maintained by the Indian Pharmacopeia Commission (IPC) – which functions directly under the Ministry of Health & Family Welfare (MOHFW). When samples of drugs are drawn from the market by drug inspectors and sent to government laboratories for analysis, they are tested as per the protocols established in the IP. Each sample is usually tested for content of active ingredient, its dissolution profile, disintegration, visual description and uniformity of weights. Each one of these tests is important to establish whether a drug will have therapeutic value for the indication it is prescribed.

An assay test, aimed at establishing the content of the active ingredient, is important because it tests the quantity of the active ingredient in the tablet against the quantity advertised on the labeling. The IP usually allows for a 10% margin of error; i.e., the assay result can be within 90% to 110% of the quantity advertised on the labeling. If the API is above or below these limits, the drug will likely not have its intended effect and may in some cases – depending on the disease – cause grievous hurt or death to the patient. Similarly if a drug fails a dissolution test or disintegration test, the drug is very likely to not dissolve into the blood stream of the patient according to the prescription parameters and can either have little or absolutely no effect on the medical condition that it is supposed to treat. Again, depending on the medical condition, the failure of such a drug may cause grievous hurt or death to the patient. In either case, once it is established that the drug has failed the standards laid down in the IP, the govt. analyst will declare the drug to be NSQ and as per the Drugs & Cosmetics Act, 1940. The manufacturers of such NSQ drugs have to be prosecuted under Section 18(a)(i) read with Section 27(d) according to the prevailing law. However the reality of drug enforcement in India is very different because of the DCC guidelines.

These Guidelines prescribed by the DCC lay down an entirely different set of parameters. It creates three categories: Category A, Category B & Category C according to the nature of defect and recommends a different strategy of punishment for each category of violations. For example, Category A basically deals with spurious or counterfeit drugs where stringent criminal prosecution is recommended. Category B deals with cases of grossly sub-standard drugs – such drugs are those which have less than 70% of the API compared to what was advertised on labeling, drugs which fail disintegration tests, dissolution tests, parental preparations failing sterility tests, vaccines failing in potency tests, presence of any adulterant which renders the product injurious to health. In all of these cases for Category B, the DCC Guidelines prescribe criminal prosecution only if the drug inspector feels that the defects are due to gross negligence or criminal intent and only if milder punishments like suspension or cancellation of manufacturing licenses are deemed to be inadequate.

This aspect of the guidelines is inherently illegal for two reasons:

The first illegality is that the Guidelines essentially bypass the binding standards laid down in the IP by prescribing its own standards. As per the Act, it is quite clear that once the IP standards are breached, a drug is NSQ and the manufacturer of such drugs has to be prosecuted according to the law. There are no exceptions in the law. It is illegal for the Guidelines to recommend its own threshold for criminal prosecutions and most importantly the guidelines lack any medical rationale for the basis of their recommendations. For instance, a drug which fails a disintegration or dissolution test, is as good as chalk or a spurious drug – similarly when the IP prescribes a lower limit of 90% for assay tests, why should the guidelines further drop the threshold to 70% despite the fact that in the case of some drugs such a difference can actually cause mortalities? All such cases should automatically result in a criminal prosecution under criminal law; instead the guidelines ask the drug inspector to consider prosecutions as second option to the preferred option of suspending or cancelling a manufacturing license. The suspension of licenses which appears to be the preferred remedy of drug inspectors is a red herring because there is no monitoring mechanism to enforce the suspension. Criminal prosecution is the only real punishment in such cases.

The second illegality with the Guidelines is that it requires Drug Inspectors to ascertain the criminal intent or negligence of the manufacturer – however, there is no requirement in the Drugs & Cosmetics Act, to ascertain the mens rea or mental intent of the manufacturer while prosecuting a NSQ case. Once a breach of the law is established in such cases, a criminal prosecution is necessarily mandated under the law. Guidelines which are drafted by statutory authorities like the DCC cannot undermine the letter of law laid down by Parliament. That is the law of the land. It is simply astounding to see the audacity with which these guidelines recommend circumventing the law laid down by Parliament.

It is a different matter altogether why this artificial construct of distinction between counterfeit and sub-standard drugs was intentionally designed by the DCC to create so many categories which lead to this situation. Counterfeiting a product makes sense only where there is a real financial gain. In a country like India, where price controls are the norm, what does a counterfeiter stand to gain in terms of profit? Anecdotal data shows that the preponderance of the problem in India is substandard drugs, not counterfeit as the industry claims. Unfortunately, other than industry funded studies to support their absurd assertions, India does not have independent think-tanks and research bodies which study this issue and can provide unbiased reporting of the data. One can only imagine the role the pharmaceutical lobby played in the DCC creating these illegal guidelines, which are clearly designed to protect the members of the lobby by circumventing the law of the land.

In one of the PILs that I had filed before the Supreme Court, I sought to challenge the constitutionality of these guidelines. Declaring these guidelines to be unconstitutional would have required Drug Inspectors to mandatorily prosecute all cases where drugs failed to meet the standards prescribed by the IP. As things stand now, a vast majority of NSQ cases are not even criminally prosecuted since drug inspectors prefer suspending licenses as recommended by the DCC guidelines despite the fact that such suspensions are a complete eye-wash and there is no way to monitor compliance in such cases. In some states, the period of suspension is a ridiculous 1 day or at most a week. On the other hand a criminal prosecution can result in both imprisonment and fines. Unfortunately, the Supreme Court thought this was an academic issue and was reluctant to hear these issues, which go to the core of the regulatory problem in India.

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Enforcement measures under the Drugs & Cosmetics Act, 1940 – Part 6: Who makes a good DCGI?

Posted by on Apr 11, 2016 in Blog | 0 comments

One of the issues raised in the 59th Report of the Parliamentary Standing Committee on Health & Family Welfare was that of appropriate qualifications for the post of the Drug Controller General of India (DCGI), who heads the CDSCO. The main concern expressed by the committee was that unlike regulators in the US and UK both of which are usually headed by persons qualified as medical doctors, the Indian regulator was historically headed by a pharmacist. The Standing Committee describes the existing criteria as follows:

“the academic qualifications of the Licensing Authority (i.e., Drugs Controller General, India) are specified in Rule 49A and 50A of the Drugs and Cosmetic Rules. As per these Rules, the Licensing Authority (DCGI) should be (a) a graduate in pharmacy or pharmaceutical chemistry (B.Pharm) or (b) a graduate in medicine with specialization (post-graduation) in clinical pharmacology or microbiology (MD) with five years’ experience [manufacture of or testing of drugs or enforcement of the provisions of the Act]”

By necessarily requiring a candidate to have 5 years of experience in manufacturing or testing of drugs, these rules virtually disqualify all medical doctors in India because manufacturing requires engineering skills and clinical testing was largely limited to bioequivalence studies until very recently. Unfortunately, the framers of this rule never considered public health (e.g., MPH) related discipline as a requisite either. It is crucial to have medical doctors or public health professionals heading a drug regulator because the primary responsibility of the DCGI is to safeguard public health – this includes decisions related to drug approvals and clinical trials, both of which are beyond the educational qualifications for pharmacists. This is not to say pharmacists have no role – they are a key component of regulating manufacturing but this is only one component of the overall drug regulation.

The Standing Committee appears to appreciate this distinction. It comments:

“The Committee fails to understand as to how a graduate in pharmacy or pharmaceutical chemistry (B.Pharm) is being equated with a medical graduate with MD in Pharmacology or Microbiology. Apart from the obvious anomaly, with rapid progress in pharmaceutical and biopharmaceutical fields, there is urgent need to revise the qualifications and experience as minimum eligibility criteria for appointment as DCGI. The Committee is of the view that it is not very rational to give powers to a graduate in pharmacy, who does not have any clinical or research experience to decide the kinds of drugs that can be prescribed by super specialists in clinical medicine such as those holding DM and PhD qualifications and vast experience in the practice of medicine and even research.”

Furthermore, the committee also stated the following:

“On a larger plane, the Committee is disillusioned with the qualifications provided in the age old Rules for the head of a crucial authority like CDSCO. The extant Indian system is nowhere in so far as sheer competence and professional qualifications are concerned when compared with countries like USA and UK. There is, therefore, an urgent need to review the qualifications, procedure of selection and appointment, tenure, emoluments, allowances and powers, both administrative and financial of the DCGI.”

As a result of the Standing Committee’s recommendations, the Government of India constituted an Expert Committee to suggest the qualification criteria for senior level posts in the CDSCO including the DCGI. The Committee initially comprised of three persons: Mr. Satyananda Mishra, Former Secretary of the DoPT, Dr. M.K. Bhan Former Secretary Dept. of Biotechnology and Dr. Ranjit Roy Choudhury Prof. Emeritus Pharmacology. Later, the Committee co-opted two more persons, both of whom were former DCGIs: Dr. Prem Gupta and Dr. Ashwini Kumar. The decision to include the former DCGIs was a direct conflict of interest because such a review exercise requires an objective mind – former DCGIs aren’t going to admit that the existing criteria in the law under which they were appointed was flawed and that they were unfit for the job they held. It should therefore not surprise anyone that the final report of the committee hardly makes any radical recommendations. In fact, the final report is only 9 pages and is very poorly researched and reasoned. The only small mercy is that the report drafted recommendations to change the mandatory requirement of experience in testing or manufacturing of drugs and instead, allow for clinical research or other related research areas to be considered in such senior appointments. This may make it easier to appoint medical doctors to the post of DCGI. This final set of recommendations does not however delete the criteria which allows pharmacists to be appointed – it merely upgrades the criteria from a mere Bachelor’s degree to a Master’s Degree. Even these recommendations are yet to be implemented by the government.

Qualifications aside, there is very little accountablity of the DCGI toward public health. For example, in the aftermath of Ranbaxy’s prosecution in the US, the DCGI and his team undertook a tour of Brussels and St Petersburg, presumably at taxpayer expense. The pretext for this trip was to learn of international standards. It has been over two and half years since that trip, and manufacturing facilities in India continue to cited for compliance related violations by foreign regulators, while CDSCO twiddles its thumbs. One wonders what, if any, did the DCGI learn from his foreign junket?

Changing the qualification criteria for this critical public health role isn’t going to be an easy task. The rank and file of the CDSCO consists of officers who are primarily pharmacists or hold similar degrees – changing qualifications at the top is seen to impede their chances of climbing the organisational ladder. At the same time, the appointment of a person from outside the fraternity opens the door to even more accountablity which could disadvantage vested interests. A NGO by the name of Delhi Pharmaceutical Trust (DPT) has already demanded that the Ministry not change the qualification criteria. The Trust’s managing trustee told Parmabiz. “Top regulatory head positions like the DCGI involve effective implementation and overseeing drugs and pharmaceuticals import, approval of new drugs, manufacture, sale and distribution, Expert knowledge of pharmacy and pharmaceuticals along with administrative experience in these areas is vital to provide positive leadership and effective enforcement of drugs. In the current global regulatory scenario, maintenance and growth of Indian pharmaceutical sector is key to the country”. This is a myopic view of drug regulation for reasons already discussed above has a negative impact on transparency and accountability of the organization that is supposed to be the guardian of public health in the country. Even in its present form, the appointments to the post of DCGI have been fiercely litigated in the Court. This 2012 editorial in the Indian Express captures the key issues; none of which have been addressed to resolution now some four years later.

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Enforcement measures under the Drugs & Cosmetics Act, 1940 – Part 6: The mysterious birth of the CDSCO and its miserable existence

Posted by on Apr 7, 2016 in Blog | 0 comments

When we began our research into India’s drug regulatory system last year, one of the first topics that we sought to study was the creation of the Central Drug Standards Control Organisation (CDSCO) and its legal status. From the preliminary research we had conducted, it appeared that the CDSCO had no ability to control or advise the State Licensing Authorities (SLAs) based on the numerous circulars it had issued. The SLAs functioned without any coordination and consistency which I have documented in earlier blog posts; but the question that remained unanswered was why the SLAs simply ignored the directives from the CDSCO. We wanted to know under which law the CDSCO was created so that we could better understand its structural problems and its lack of willingness to enforce the law with errant SLAs. A timely example are the arguments being made in the Delhi High Court in the FDC ban case. The center’s argument seems to be that the SLAs have gone rogue and approved these “harmful FDCs” on their own. How is that even possible if there is accountability in the system? Since we couldn’t find any answers in secondary literature, my attorney filed two RTI applications –first with the Ministry of Health & Family Welfare (MOHFW) since it is the ‘parent’ ministry of the CDSCO and the second with the CDSCO itself. The two pertinent questions that we asked of both the authorities were as follows:

1. Under which legislation/rule/notification has the Central Drug Standard Control Organization (CDSCO) been created by the Central Government?

2. Please provide a copy of the legislation/by-rule/notification under which the CDSCO has been created.”

The responses to the RTIs can be accessed over here and here.

The CDSCO in its reply stated “The CDSCO is the name given to the office of the DCG(I) appointed under Rule 21(b) by the Central Government and the other offices under his control. State licensing authorities was created under the provision of sec. 18 empowered the state government for the purpose.”

The MOHFW in its reply stated “…it is informed that the Central Drugs Standards Control Organisation (CDSCO) headed by the Drugs Controller (India) flows from the various provisions of the Drugs & Cosmetics Act, 1940 and Drugs & Cosmetics Rules, 1945. The said Acts and Rules are in public domain.”

The long and short of both replies is that neither the CDSCO nor the MOHFW are aware of how the CDSCO was created. Rule 21(b) makes no reference to the phrase CDSCO. Similarly, if the CDSCO was a name given the office of the DCGI, there has to be an executive order to that effect from the Central Government stating that the office of the DCGI will henceforth also be referred to as the CDSCO – naming an organisation and creating an organisational structure is usually laid down in a legal instrument. For example, various ministries in the Central Government are created under the Government of India (Allocation of Business) Rules, 1961. Specific organisations like the Central Vigilance Commission (CVC) are created under CVC Act of 2003. Similarly, there must be a law under which the CDSCO was specifically created – neither the CDSCO nor the MOHFW appear to have any clue of the law under which the CDSCO’s existance came into being. Are we therefore surprised when the SLAs routinely ignore the circular’s from the CDSCO? What legal standing does the central drug regulatory authority have in India?

The Katoch Committee’s observations on the functioning of the CDSCO

Post the now famous 59th Report of Parliamentary Standing Committee on Health & Family Welfare, the MOHFW appointed an Expert Committee headed by Dr. V.M. Katoch to study the recommendations of the Standing Committee. The Katoch committee report can be accessed here. As a part of the exercise, the committee asked the CDSCO to present a self-assessment of its functioning. Some of the disclosures made by the CDSCO in this report are revealing of the rot within the organisation. Sample this excerpt from the report on page 33:

“From early days the CDSCO has been without medical specialists. Therefore, CDSCO was engaging consultation of outside experts for evaluation of safety & efficacy of drugs…..the present cumbersome system of providing TA/DA to the outside experts is a major constraint in getting external expertise. It further requires a well-supported secretarial assistance.”

“Resource in terms of manpower and other infrastructural facilities like working area, archiving, maintaining software based data bank etc. are grossly inadequate for effective functioning in various multi-disciplinary activities of CDSCO.”

“There is a weak administrative infrastructure with respect to handling of administrative activities like service matters, budgets, recruitment, procurement matters etc.”

The remaining “confessions” in the self-assessment report pertain to the lack of training for key personnel, inadequate access to the latest medical literature, inadequate working space, inadequate archiving facilities and non-existence of a data bank of all drug licences issued by various authorities in the country. While some of these issues can be solved by throwing more money at the problem, as the government has announced recently under the 12th Five year plan, there is a need for radical structural changes in order to make this organization accountable to the people of India. The Katoch committee had recommended a detailed study of the CDSCO. The exact recommendations of the committee are reproduced as follows:

“a) Review of implementation of the Mashelkar Committee report with a view to identify items implemented and those in the pipeline; the likely timeframe of their implementation and decisions on remainder recommendations;

  1. b) Study of international role model/s in the field of drug regulation to identify qualitative changes that Indian regulatory system should adopt in its functioning;
  2. c) Study of the self-assessment report of the CDSCO extracted under 4.3.5. on pages 33-42 of this report and make critical appraisal of it in context of (i) and (ii) above.
  3. d) Carry out in-depth ‘wet’ study of the current structure and functioning of the CDSCO, including newly constituted NDACs, employing work-motion studies, individual and group interviews and other techniques of qualitative research;
  4. e) On the basis of the above studies the consultant/consultancy shall prepare a blueprint of structure and functioning of CDSCO, with identification of inputs, implementation programme and outcome of revamping – with clear cut goals and timelines;
  5. f) The report so prepared should be critically appraised and accepted by the Government.”

My attorney filed a RTI Application with the MOHFW where we asked them whether such studies were ever commissioned – the answer was in the negative.

So basically, the government is simply throwing more money at the CDSCO without making any attempt to understand the larger problems within the CDSCO despite the CDSCO confessing that it lacked the basic infrastructure to carry out its job of regulation. Not only that, political appointments to head this key regulatory public health function, coupled with undue influence of the pharma lobby over policy making and regulatory enforcement has essentially rendered this institution impotent.

In one of my PILs, I had asked for the Supreme Court to issue directions to the Comptroller & Auditor General (CAG) to carry out a performance audit on the CDSCO, so that we had a better understanding of the problems plaguing the CDSCO. The CAG has experience in carrying out such audits and they do a good job. One such example is an audit of the National Institute of Biologicals (NIB) in 2009 and I was hoping we could replicate the process with the CDSCO.

The lack of statutory basis for the existance of the national drug regulator cannot be an academic exercise. It affects the health of over a billion people who live in India.

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