Enforcement measures under the Drugs & Cosmetics Act, 1940 – Part 5: A complicit criminal justice system

Posted by on Apr 4, 2016 in Blog | 0 comments

In the series of blog posts leading up to this one, we have looked at how various state health regulators conduct investigations and initiate prosecution where they have a preponderance of evidence for manufacture of Not of Standard Quality (NSQ) drugs. We have seen how dysfunctional the investigatory process is, and how lack of training and poorly written guidelines allow even major violations which impact the health of patients often go unaccounted for. Let us now look at how the criminal justice system deals with rare cases which come up for adjudication despite all the challenges that they face leading up to the court. The next major problem area is the issue of sentencing by Indian judges for offences under the Drugs & Cosmetics Act, 1940 especially the offence of manufacturing and selling sub-standard drugs.

As per Section 32 of the Drugs & Cosmetics Act, 1940 all offences under Chapter IV of the Drugs & Cosmetics Act, 1940 are required to be heard before a Court of Sessions. In the hierarchy of criminal trial courts, the Court of Sessions is the highest. The only courts above the Court of Sessions are the High Courts of the respestive states and the Supreme Court of India. In our criminal justice system, under the Code of Criminal Procedure, a Court of Sessions hears only the most serious offences that are punishable with a minimum of ten years imprisonment or death. Offences attracting lesser punishment are usually tried by Judicial Magistrate First Class or lower.

Under the Drugs & Cosmetics Act, 1940, as originally envisioned, with the exception of offences mentioned in Section 27(a), which attract a minimum term of 10 years to a maximum of life, almost all the other offences are punishable with rather short term sentence of two to three years in prison (along with fines). In the normal course, these offences are tried by Magistrate level courts. However, due to an amendment to Section 32 in 2008, all of these offences are now required to be tried by Courts of Sessions – Indian Parliament in its wisdom was perhaps convinced that all offences under the Drugs & Cosmetics Act were serious enough to warrant attention of more experienced judges who preside over the Court of Sessions. This amendment however prima facie appears to be running contrary to the provisions of Section 36A (a provision inserted in 1982), which clearly states that judicial magistrate can try some offences summarily. As a result of this poor legislative drafting – a feature which is the hallmark of this law – there is confusion amongst various states on the jurisdiction of criminal courts under this law. Different High Courts have delivered conflicting judgments on whether prosecutions under Section 18(a)(i) read with Section 27(d) for manufacture and sale of NSQ drugs are to be heard by a Court of Sessions or by a Court of a Judicial Magistrate First Class. A few of the conflicting judgments on the issue of jurisdiction and the competent court to take cognizance of such crimes are available here: (i) Zest Pharma v. Drugs Inspector; (ii) Deepesh Arvindhbhai Patel & Ors. v. State of Karnataka & (iii) Rabindra Singh v. State of Bihar.

An unfortunate consequnce of this confusion is that manufacturers who have the ability to influence the system through political means, often wind up in the lower court. We have seen how hard it is to collect adequate evidence for prosecution of these crimes; how difficult it is to establish a water-tight case because our drug inspectors lack training and lawyers lack scientific background to make the case; the cherry on top is the fact that even in those rare cases where the evidence is incontrovertible, the sentencing guidelines allow enough of a leeway for a judge toward leniency for the accused. This is truly a double-whammy.

Judges hearing cases of manufacture of NSQ drugs are not complying with the mandatory minimum guidelines for sentencing prescribed under the law. Section 27(d), which addresses the offence of manufacturing NSQ drugs, mandates a minimum term of one year and a maximum term of two years of imprisonment, along with a minimum fine of Rs. 20,000. The court can waive the minimum term of imprisonment for adequate and special reasons which are required to be recorded in the judgment. In reality however, most courts appear to be invoking the exception more often than the rule by sentencing the guilty to ‘simple imprisonment till the rising of the court’ i.e., the accused is convicted but is not actually sent to jail – instead is required to be in court until the the judge rises from the court for the day. This could be as little as an hour to a maximum of few hours.

Once the judge rises from court, the convicted person is deemed to have served time and can walk out as a free bird. So much for making & selling poison to the people of India! One can only imagine the message this gives to manufacturers who produce NSQ drugs.

As a part of our research for the PILs, we procured a set of 6 judgments from the Special Court for Economic Offences in Bangalore where, despite guilty plea by the accused, all of them were sentenced only with simple imprisonment till the rising of the court! The judge chose not impose the minimum imprisonment of one year even in a single case among these. In most cases, the Court awarded this lenient sentence on the grounds that the accused had family dependant on his earnings.

C.C. No. Case title Reason for reducing sentence below mandatory minimum
7/2014 Drugs Inspector


Causway Pharma, Gujarat & Anr.

1. Accused had family members as dependants;

2. Accused had employees

291/2014 Drugs Inspector


Surien Pharmaceuticals (P) Ltd. & Ors., Kovur

1. Accused had family members as dependants;

2. Accused had employees

01/2009 Drugs Inspector


Injecto Capta Pvt. Ltd. & Ors., Secunderabad

1. Accused had family members;

2. Accused suffering from cardiac problem and diabetic;

400/2010 Drugs Inspector


Quasar Labs Pvt. Ltd.,


1. Accused had family members;

2. Accused’s mother was suffering from serious ailments;

136/2008 Drugs Inspector


Sanchez Pharmaceuticals (P) Ltd. & Ors., Haryana

1. Accused had family members;

2. Factory was shut anyway.

134/2012 Drugs Inspector


BRD Medilabs, Solan, Haryana & Ors.

1. Accused had family members;

2. Accused’s mother was suffering from serious ailments;


In all of the above orders, the Court justified this lenient punishment with the reasoning that the charge against the accused was one of selling drugs which are not of standard quality, as opposed to the more serious offence of selling counterfeit medicine. The Indian pharmaceutical lobby has been very successful in creating this impression that somehow counterfiet medicines have more serious health consequences than sub-standard drugs. The court fails to understand that in several cases, sub-standard medicine can have similar, if not worse health outcomes compared to counterfeit drugs. For example, if a drug fails to dissolve or disintegrate it will have no therapeutic effect on the human body. Depending on the indication it is prescribed for, lack of such action can have serious consequences on a patient. It is therefore necessary for the Courts to seek an expert opinion from pharmacologists or medical doctors on the effect of the sub-standard medicine before deciding to let the accused off with simple imprisonment till the rising off court.

Moreover, the Supreme Court of India has been very clear that mandatory minimums need to be enforced strictly against the accused proven guilty. The Supreme Court has time and again ruled, in the context of different laws that the ‘special reasons’ exception can only be used in exceptional cases and not in a routine, casual and cavalier manner. In our PIL which the Supreme Court refused to hear, one of the prayers we asked was directed at framing guidelines for judges hearing such cases under the Drugs & Cosmetics Act because I know for a fact that the Special Court in Bangalore is not the only court handing out such lenient orders. The ‘simple imprisonment till the rising of the court’ is a sentence awarded in several other states, including Tamil Nadu, which has the most competent investigations in India.

Justice Thakur, if this is an academic exercise, I don’t know what a real one is. An effective criminal justice system is the most significant deterrent toward the intent of wrongdoing. Are we surprised that the industry continues to engage in such criminal activity knowing full well that the outcome, if caught and prosecuted, which itself is a rare ahicevement in India is nothing more than a slap on the wrist? No, this is not an academic exercise, Sir; the consequence of the actions of the courts affect the health of over a billion people who live in India.

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The CDSCO’s bravado on surprise checks

Posted by on Apr 1, 2016 in Blog | 4 comments

A couple of days ago, the Economic Times (ET) reported quoting an anonymous source that the CDSCO would soon begin conducting surprise checks for compliance with regulatory standards at pharmaceutical manufacturing sites along the lines of inspections conducted by the USFDA. The anonymous source also told ET that “We may even issue suspension or cancellation of licences. In cases of major deviations, we may also (take legal action) against the company”.

Before we take such claims by the CDSCO at face-value, it may help to examine the CDSCO’s past track record in this area. Let us start with the Ranbaxy case. After I blew the whistle on Ranbaxy’s questionable manufacturing practices, the company agreed to pay damages and fines amounting to $500 million to the US Government for flouting cGMPs and selling adulterated medicine. The news of the fine caused quite the controversy in India including questions asked in the Parliament. While answering these questions, the then Minister for Health Ghulam Nabi Azad promised Parliament that the allegations against Ranbaxy would be probed. The Ministry of Health then wrote to the DCGI informing him that Ranbaxy had pled “guilty in the USA to charges relating to the manufacture and distribution of certain adulterated drugs made at two of Ranbaxy’s manufacturing facilities in India and that the Ranbaxy has been imposed a total of $500 million as fine”. As a result the Ministry ordered the DCGI to “review the GMP compliance of the above referred two manufacturing facilities of Ranbaxy in India as well as to ascertain the safety, quality and efficacy of drugs manufactured for the domestic market in these facilities, particularly during the period in question”. It has been almost three years since that order; the DCGI has not released any report regarding the results of such an investigation until now. Last year, my attorney filed a RTI application asking the DCGI for the status of the investigation – his office replied saying that the investigation was being carried out by the respective State Licensing Authorities (SLA) (presumably in the states of Himachal Pradesh & Madhya Pradesh) and that since investigation was still going on, the results of such investigation could not be shared. The following two points stand: first, the DCGI has conveniently shunted the job of investigation off to the state licensing authorities and second, the SLAs have not completed the investigation even after the fact that Ranbaxy has admitted to wrongdoing in the USA. How can it take so long to investigate a case where the company in question has basically admitted to all charges? Moreover, I have never been contacted by the DCGI despite being the person with the most detailed understanding of what exactly went wrong at Ranbaxy. What is even worse is that when my attorney subsequently filed a RTI with the Health ministry asking whether the DCGI had been given permission to outsource the investigation to state authorities – the Health Ministry replied in a negative. We also asked the Health Ministry whether at a minimum, whether Ranbaxy to explain the circumstances leading up to the fine imposed in the US – the answer was negative. So there you have it; two of the largest pharmaceutical manufacturing plants which have been banned from exporting products to the USA continue to supply the Indian market with drugs of questionable quality of drugs with nobody from the Indian regulatory establishment bothered to even ask the company which paid such a large fine to explain what exactly went wrong. What does this tell your about accountability at CDSCO?

After news of the Ranbaxy pleading guilty to seven counts of criminal felony in the USA, the DCGI sent a circular to all SLAs informing them to instruct all licensees within their jurisdiction that information regarding adverse foreign regulatory action was required to be shared with the all SLAs, who were then required to share such information with the DCGI’s office so that “its impact in Indian scenario can be assessed and necessary action is taken to ascertain the quality, safety and efficacy of the drugs available in the country.” My attorney filed RTI applications to test the effectiveness of implementation of this circular. We picked two cases where foreign regulators had flagged Indian manufacturing plants for flouting regulatory laws. The first was a case from Vietnam – where the Vietnamese drug regulatory agency had blacklisted a total of 46 India based pharmaceutical manufacturers. It is unfortunate that there was very little coverage of this issue in the India media. The Indian Consul General in Vietnam, Deepak Mittal wrote to the Indian Government requesting an investigation against these companies so that the Indian mission in Vietnam could assure the local authorities in that India was committed to be a reliable supplier to quality medicines. When the DCGI was asked via a RTI application the status of these investigations, his office once again denied providing information on the grounds that the State Licensing Authorities (SLAs) were still in the process of carrying out investigations (2 years after the Vietnamese had blacklisted these companies) and that information could not be shared as it would jeopardise the investigations. In the second case, we asked the DCGI whether they had followed up on the reasons behind the ‘import bans’ that were imposed by Health Canada on the Indian manufacturing plants of Apotex Pharmachem India Pvt. Ltd, Apotex Research Pvt. Ltd. and IPCA Laboratories. These plants are located in Madhya Pradesh and Karnataka. (RTI Application enclosed) The reply from the DCGI’s office clearly washes its hands off the matter entirely and places it at the doorstep of the SLAs in Madhya Pradesh and Karnataka – the reply states “Licences are issued by the State Licensing Authorities and inspections are conducted periodically. CDSCO headquarters has not conducted any inspection with respect to the alleged ban imposed by Health Canada.”

The common thread in all of the cases that I’ve discussed above is the fact that the CDSCO has constantly palmed off the job of investigations to the state licensing authorities. In none of these cases has CDSCO seriously investigated the offences. Given this track record, I find it difficult to believe CDSCO’s claim that it is going to conduct ‘surprise checks’. It just seems like an empty threat. Why not start with cases where foreign regulators have already found cGMP violations? At least, their inspection reports give CDSCO a starting point for its supposed investigations.

Further, the quote by the CDSCO threatening to cancel or suspend licences isn’t entirely substantiated in law because as per Rule 69 and its associated rules (of the Drugs & Cosmetics Rules, 1945), only the State Licensing Authorities can issue manufacturing licences for drugs. The only manufacturing licences that the Central Government can issue are for ‘new drugs’ under Rule 122B and under Rule 68A for the manufacture of medical devices such as cardiac stents, drug eluding stents, catheters, bone cements, heart valves etc. The new drug status lasts for 4 years after which the CDSCO loses jurisdiction over these drugs. Thereafter, it is the states that regulate manufacturing and only the state licensing authorities can cancel these manufacturing licences. Even presuming that a CDSCO team does find violations during the first 4 year period, it can cancel the licence only for the particular drug in question – the remaining drugs licensed by the SLAs can still be manufactured at the same facility until such time that the SLA in governing that manufacturing facility suspends or cancels the licence issued to the facility. To put it politely, it is an absurd state of regulation.

No wonder that Judge Endlaw of the Delhi High Court has reportedly quipped in the recent litigation regarding the banning of FDCs by the central government “It appears that since you do not have power to control your state licensing authorities, you are taking this action. It all boils down to this that you have exercised this power as you do not have power to take action against those operating without valid license from the Drugs Controller General of India (DCGI)”.

It is however important to note that while the CDSCO has limited, almost no, powers to cancel licences, it does have substantial powers under Section 21 to draw samples, inspect plants and launch prosecutions in cases where central government laboratories have declared the drug to be NSQ. We have a list prosecutions launched by the CDSCO (West Zone) available here. As demonstrated by the Tamil Nadu drug inspectors in the Alfred Berg & Co case, it is also possible to prosecute these companies for GMP violations in criminal court. From what we have seen from all our resarch, it doesn’t appear that the CDSCO is prosecuting many cases. Doesn’t this tell us how serious the CDSCO is about ensuring our drug supply? If it really wants to crack the whip, the CDSCO should prosecute manufacturers of NSQ drugs in states like Himachal Pradesh and Uttarakhand which are the fountainhead of the sub-standard drugs in India. The proof is in the pudding, and forgive me for not taking this empty threat from the CDSCO seriously. The CDSCO is a toothless tiger; often hand-in-glove with the industry and choosing to look away rather than being accountable to the people of India. Its threat to suspend licenses and take legal action against wrongdoers rings hollow.

I had anticipated the complexity and the push-back that we see from the industry on a small slice of the problem area, Fixed Dose Combinations. My PILs were the best option to wipe the slate clean and start with a robust, accountable and transparent legal framework that produced a globally consistent regulatory framework. Unfortunately, the highest court in the land thought this was an academic exercise; it is not. It affects the health of over a billion people who live in India.


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Enforcement measures under the Drugs & Cosmetics Act, 1940 – Part 4: A land of hope

Posted by on Mar 30, 2016 in Blog | 0 comments

In the last two posts, I explained how investigations are conducted in Andhra Pradesh and Maharashtra. In this post, I will discuss two investigations in Vellore district of Tamil Nadu. Unlike other states, both the investigations in Vellore are thorough and comprehensive. As usual, the court documents are acessible by clicking on the headings below.

(A) The Drugs Inspector, State of Tamil Nadu Alfred Berg & Co. Pvt. Ltd. and Ors. before the Honourable Court of Judicial Magistrate Gudiyattam: In this case, the drug inspector drew samples of Glipizide tablets manufactured by Alfred Berg & Co from the premises of the Government Hospital, Gudiyattam, Vellore and sent it for lab analysis on August 22, 2013. The lab report which was returned on December 10, 2013 reported that the sample didn’t conform to the IP specification for Glipizide and that the sample in question was actually Glibenclamide. The drug was therefore declared to be ‘Not of Standard Quality’ and ‘Spurious’. Both Glipizide and Glibenclamide are anti-diabetic drugs from a class of medication known as ‘sulfonylureas’. While the latter was discovered around 1966, the former has been on the market since 1984. There can be serious medical complications for elderly diabetic patients who have consume Glibenclamide instead of Glipizide. In fact, a WHO report comparing the two drugs says “The data unequivocally recommends against the use of glibenclamide in elderly patients.”

Upon receiving the govt. analyst’s report, the drug inspector inspected the stocks of the Government Hospital on December 18, 2013 and discovered that there was nothing left of the stock. A notice was served on the chief pharmacist of the government hospital to disclose the details of the person from whom the drugs were procured. The chief pharmacist responded on the same day disclosing that the drugs had been procured from the Tamil Nadu Medical Services Corporation Ltd. (TNMSC) – the company responsible for all drug procurement on behalf of the Government of Tamil Nadu. The TNMSC warehouse confirmed that the drugs in question had in fact been acquired from Alfred Berg & Co.

Once the drug inspector established that Alfred Berg & Co was in fact the manufacturer, the inspector from Gudiyattam teamed up with the Drug Inspector of the district where the Alfred Berg & Co factory was located and together conducted a joint inspection of the company’s manufacturing plant. A showcause notice was served on the company along with a request to submit particulars like batch manufacturing records, analytical report of raw materials, purchase details, analytical reports of the finished product, raw material register, packing material register, purchase details of raw materials etc.

The joint-inspection was carried out on January 8, 2014. During the investigation, the drug inspectors discovered shocking lapses in following good manufacturing practices, especially in maintaining proper records of manufacturing and quality control process. The Batch Manufacturing Records showed that there was a long gap of around 12 days between granulation and compression and surmised that the long gap possibly led to the mix up in labelling the drugs. The inspectors also noted that the records did not contain in-process details such as hardness test, thickness test, friability test and disintegration test. Similarly, the inspectors noted that the company had analysed only the finished tablet and not the final product (i.e. after the tablet has been packaged). With respect to the GMPs, the drug inspectors noted that the “whole premises is congested with ready for compression granules, compressed tablets, packing materials and raw material without any proper labelling and strips of final packing of Glibenclamide four batches were kept together without any demarcation.” It was also discovered that the company did no stability testing on this product.

As far as the company’s record keeping is concerned, the drug inspectors noted that the company did not maintain required records and registers as per Schedule U of the Drugs & Cosmetics Act and that it appeared that the company was simply manufacturing the drug first and was creating records thereafter. In particular, it was noted that the “Records of Raw Materials” were not maintained properly. The inspectors also opined that “the manufacturer did not produce the proper and genuine records to investigate and inspection to cover their mistakes”.

The complaint then makes an explosive allegation that the mislabelling of Glibenclamide for Glipizide was done intentionally for profit since the former was priced at Rs. 1900 per kg while the latter was priced much higher Rs. 9000 per kg. This allegation is supported by the fact that the company did not maintain proper Records of Raw Materials; a document which would have helped the inspectors conclusively determine whether the mixup was deliberate or a genuine error. When bank and purchase details for raw materials were requested for by the drug inspector, the company claimed that it didn’t maintain such records at its manufacturing site; and that such records were maintained at its head office and requested more time. A subsequent response from the company noted that the company did not maintain a stock register or packing material register for the year 2012-13.

In order to estimate the scale of profits made by the company, it may help to assess the number of tablets sold by the company: Alfred Berg & Co reportedly manufactured 5,75,400 tablets and released 5,67,000 tablets for sale. Of these 1,57,000 tablets were sold to the TNMSC warehouse in Vellore, while 2,60,000 + 1,50,000 tablets were sold to the TNMSC warehouse in Kanchipuram. As you can see, in addition to the risk to patients who consumed this drug, the public exchequer has been defrauded by such sales.

Ultimately, the drug inspectors decided to charge Alfred Berg & Co. along with its directors and quality control staff with the following offences:

(i) Section 18(a)(i) read with Section 17B(d) of the said Act for having manufactured for sale and sold a “spurious drug”;

(ii) Section 18(c) read with Rule 74(c) for failing to completely test the finished product of the said batch of subject drug which is punishable under Section 27(d) of the said Act;

(iii) Section 18(c) read with Rule 74(d) for having failed to maintain the required records and registers as per Schedule of the Drugs and Cosmetics act, 1940 which is punishable under Section 27(d) of the said Act.

This case is one of the rare prosecutions that we could obtain which specifically charges the accused with failing to maintain records as required by the GMPs outlined in Schedule M & Schedule U of the Drugs & Cosmetics Act. Most importantly, the TNMSC blacklisted Alfred Berg & Co for all tenders till March, 2019. It is very unlikely that the blacklist was applied toward the purchase of this drug; Alfred Berg & Co figures on earlier blacklists by the TNMSC; and yet it managed to sell this drug to the state.

We do not have details on the current status of this case.

(b) Drug Inspector, State of TN v. Res Sancta & Othrs. before the Judicial Magistrate Court, Tiruvannamalai-I: This case was relatively simple compared to the one above. The Drug Inspector had drawn a sample of Dolocold Suspension 60 ml from a pharmacy in Vellore district and sent the sample for testing on August 16, 2013 to the Drugs Testing Laboratory, Tamil Nadu. The test report from the government lab was returned on March 20, 2014 – a full 7 months later – declaring the sample to be NSQ because the content of Phenylephrine Hydrochloride in the sample was only 27.82% of what was declared on the label. Dolocold suspension is reportedly a Fixed-Dose-Combination of Paracetamol (125 mg), Phenylephrine (2.5 mg) and Chlorpheniramine Maleate (1 mg). The list of indications for this FDC include everything from allergies, cold, ear pain, fever, flu, hay fever, headache, joint-pain, nasal decongestant, toothache, runny nose.

Although, the brand name appears to be owned by Micro Labs Ltd., the manufacturer of the drug in this case was Res Sancta, a partnership firm based in Solan – Himachal Pradesh. The Drug Inspector was able to establish the supply chain from the pharmacy to the manufacturer without much difficulty.

Subsequent investigation in this case wasn’t as detailed as the previous case; perhaps because the manufacturer was more co-operative. In its defence, the manufacturer tried arguing that the control sample it retained was tested again and found to comply with standards but the complaint noted that no documentary evidence was submitted in support. Other defences proffered up by the manufacturer were similarly dismissed by the drug inspector. Ultimately a prosecution was launched against the manufacturer and all the partners were charged under Section 18(a)(i) and Section 27(d) of the said Act.

(C) Other investigations: In addition to the above prosecutions, there are several other cases (available here: 1, 2, 3, 4 & 5) where investigations into NSQ drugs haven’t always resulted in prosecution of the manufacturer because most drug controllers follow a set of Guidelines laid down by the DCC which recommends prosecutions only in the most serious cases. Even when the drug inspector establishes cuplability with the help of the government laboratory, no prosecution is initiated. In such cases, the drug inspectors in Tamil Nadu recommend that they be referred to either to the state where the manufacturer is located or alternatively suspend the licence for a brief period of time.

Among the states who responded to our RTI inquiries, Tamil Nadu seems to be the best in conducting investigation into the prevalence of NSQ drugs. The Alfred Berg & Co case is demonstrative of the depth of the problem with sub-standard drugs in India. Although the complaint isn’t conclusive on whether the mislabelling of Glibenclamide for Glipizide was done with criminal intent, the medical fact remains that patients who have consumed the drug in question may have experienced serious adverse events. For elderly citizens, such misbranding may have resulted in potentially deadly consequences. We cannot conclusively prove that such mislabelling causes deaths or even that it seriously affected diabetic patients because pharmacovigilance systems are practically non-existent in India.

This case also demonstrates the difficulties I faced while trying to advocate the dangers of sub-standard drugs; although the facts of the case point to the medically supported conclusion of possible dangerous outcome, I don’t have evidence readily available to substantiate it. Without such proof, it is difficult to convince a non-specialist audience that sub-standard drugs are a serious hazard to public health in India; especially when the specialists chose to look the other way. It appears that public discourse in India requires actual body-bags and visible injuries to accept that there is a problem. In the case of sub-standard drugs, it will most likely take a tragedy of epic proportions to force both the government and the Supreme Court to intervene into the governing issue of drug regulation.

Sadly, the Supreme Court of India thinks this is an academic exercise and refused us an opportunity to make our case.

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Enforcement measures under the Drugs & Cosmetics Act, 1940 – Part 3: ‘Casual, callous and hardly concerned’

Posted by on Mar 27, 2016 in Blog | 0 comments

In my last post, we looked at the investigation process followed by drug inspectors of the Andhra Pradesh Drug Control Administration in three different cases. In this post, lets look at the investigation process followed by the drug inspectors of the Maharashtra Food & Drug Administration in two different zones – Nagpur & Jalna. Our efforts to procure criminal complaints from the Aurangabad zone and Greater Bombay zone have been stalled because of reluctant Public Information Officers.

We learnt of these complaints from the Prosecution registers that we procured from the headquarters of the Maharashtra FDA through the RTI Act. The Maharashtra FDA is one of the better organised, although not as competent as the state authority in Tamil Nadu. The RTI responses are linked to the respective case headings below.

(i) Drug Inspector, State of Maharashtra v. Medisys Biotech Private Limited & Its Directors before the Court of Chief Judicial Magistrate, Nagpur: This was a relatively simple case, which was investigated and prosecuted within a short period of time. The starting point for this case was when the Drug Inspector of the Nagpur Zone, drew samples of ‘Neuropat-NV’ tablets (Vitamin B1) from a pharmacy in Nagpur. The drug in question was manufactured by Medisys Biotech Pvt. Ltd. which is a pharmaceutical company based out of Himachal Pradesh (HP) – a state which is the fountainhead of Not of Standard Quality (NSQ) drugs in India.

The sample was drawn on February 3, 2012 and sent shortly thereafter to the Drug Control Laboratory in Mumbai for testing. The lab sent back the test report declaring the drug NSQ on April 20, 2012. The report explained that the drug was NSQ because “Content of Vitamin B1 in the sample is less than the permissible limit (i.e. 18%) of the labelled amount.” Thereafter, the drug inspectors traced the supply chain by serving notices on the pharmacy from where the drug was sampled. The pharmacy revealed the name of the trader who had sold the drug – this trader in turn named another trader, who in turn revealed that it had procured 20,000 tablets from the manufacturer – Medisys Biotech.

The drug inspector thereafter travelled to HP on May 19, 2012 and personally served on Medisys Biotech, a copy of the analyst’s report and sealed portions of the samples drawn from the pharmacist in Nagpur. The company was also required to furnish details on its drug licence, its manufacturing record, testing record, analytical record, purchase detail of raw material, sale details of the drug in question. The company was informed that they had a right to appeal the findings in lab report by having a portion sent to the Central Drug Laboratory in Kolkata for confirmation. The company however declined to exercise the option and co-operated with the drug inspector by furnishing some of the required details. The investigation revealed that the batch strength was a total of 100,000 tablets. On receiving permission from the Joint Commissioner, the Drug Inspector initiated prosecution by filing a criminal complaint before the Court of the Chief Judicial Magistrate on August 24, 2012

The investigation was wrapped up in a record time of less than 7 months and the criminal complaint is adequate to ensure a successful prosecution especially since the manufacturer declined to challenge the test report. The complaint could however include more details on why the drugs had such low quantities of the API. In specific, to ensure a water-tight complaint, the drug inspector should test even the reference samples which are required to be stored by the manufacturer as a part of the GMP requirements under Schedule M of the Drugs & Cosmetics Act, 1940. Testing these samples will eliminate any claims by the manufacturer against the storage conditions at the pharmacist. In addition, the Drug Inspector should have mentioned whether the manufacturer had any previous run-ins with the law.

The current status of the case is not known.

(ii) Drug Inspector, State of Maharashtra v. Perennial Medicare & Ors. before the Court of Chief Judicial Magistrate, Nagpur: The starting point in this case was the drawing of samples on February 29, 2012 by a Drug Inspector from a pharmacy in Nagpur. The samples in question were OPTIMOX-CV powder for oral suspension – the Optimox brand belongs to Troikaa Pharmaceutical Ltd. Although the supply chain led the drug inspector to Troikaa in this case, the company quickly proved that it wasn’t the manufacturer and that it had procured the drug from Perennial Medicare, a partnership firm based in the state of Himachal Pradesh (HP), which accepted that the drug in question was its product.

The investigation had been triggered by the fact that the sample was found to be NSQ in a test report of the Drugs Control Laboratory, Mumbai on May 2, 2012. The government analyst had declared the sample NSQ because “Content of Calvulanic Acid in the sample (when freshly prepared) is less {1.77% of the labelled amount} than IP 2010 limit as given in the protocol and the content of Clavulanic Acid in the sample (when stored) is less {0% of the label amount} than IP 2010 limit as given in the protocol”. Our research on the internet tells us that Optimox is a FDC consisting of Amoxicillin and Clavulanic Acid – both are antibiotics. If the Clavulanic Acid content is close to zero, as is the case in the situation, it will result in the antibiotic combination not working as expected. Since such antibiotics are most commonly used to combat infections, the failure of the drug to work can lead to deadly consequences in a patient. In this case, the batch in question had a total of 8984 bottles of this drug, all of which were sold to Troikkaa Pharmaceuticals, of which a total 2,548 bottles were supplied to Troikaa Pharmaceutical branch in Nagpur which then sold 350 bottles to the pharmacy from where the Drug Inspector had drawn the samples.

Upon receiving the NSQ report, the Drug Inspector dispatched a copy of the test report along with the sample to Perennial Medicare on May 11, 2012. The complaint then records how the accused company replied on June 13, 2012 claiming non-receipt of the test report, to delay the investigation. According to the drug inspector, these tactics were deliberately used because the drug in question was reaching its expiry date. Although the complaint does not clearly outline the consequences of the batch reaching its expiry date, we can presume that the prosecution would be jeopardised because the accused would not be able to exercise his right to appeal against the test report to the Central Drug Laboratory (CDL). In any case, it appears that on receiving confirmation from Troika in July, 2012 that Perennial Medicare was indeed the source of the NSQ drugs, the Drug Inspector responded by seizing the stock from the pharmacy in Nagpur, almost 2 months after the test report had already declared the sample NSQ.

Although the prosecution in this case was initiated quite quickly, the fact remains that this complaint is weak on two counts. Not only did the Drug Inspector fail to record the response of Perennial Medicare; there has been no attempt to procure the batch manufacturing records and other details. If the manufacturer was refusing to volunteer this information the Drug Inspector should have teamed up with his counterparts in either HP or at the CDSCO north zone to conduct a surprise raid to seize all the documents in question. Instead the Drug Inspector has filed a weak criminal complaint.

We are unaware about the current status of this prosecution.

(iii) Drug Inspector, State of Maharashtra v. Colinz Laboratories Ltd., Shefa Healthcare Pvt. Ltd. & Ors. before the Court of Chief Judicial Magistrate, Jalna: This complaint was perhaps one of the shortest complaints that we have seen. Basically, the Drug Inspector, drew a sample of the drug, named ‘Pasam’ on February 29, 2012 and dispatched it to the government lab for testing on March 1, 2012.

The lab replied with the test report on October 8, 2012 (7 months after receiving the sample) declaring the drug to be NSQ. The drug in question, ‘Pasam’ is a combination of Simethicone (an anti-foaming agent which is used in treating bloating or discomfort caused due to excessive gas) and Dicycloverine (an anticholinergic which is used to treat muscle spasms and cramping in the gastrointestinal tract – basically a muscle relaxant). The sample was declared NSQ with the remark that “The content of the dicyclomine hydrochloride in the sample is less (23.30% of the said amount) than the permissible limit. (Permissible limit:- Not less than 90% of the said Amount)”.

On receiving the report, the drug inspector served notice on the pharmacist who reported that the drug was purchased from Colinz Laboratories – the company which is located in Mumbai, also appears to own the ‘Pasam’ brand. When notice was served on Colinz, it responded to the drug inspector that the drug was actually manufactured under a loan licence by Shefa Healthcare Pvt. Ltd. and provided the details to that effect. The company also asked Shefa Healthcare to provide with the Drug Inspector the necessary documents regarding the manufacture of this product. The complaint does not state which documents which were requested and whether Shefa Helathcare actually provided any of these documents. Instead the complaint directly skips to the fact that the HQ granted sanction to prosecute on October 20, 2012. It then took the Drug Inspector, another 5 months to actually file the complaint on March 21, 2013. Thus, the complaint was filed more than year after the sample was drawn.

Unlike other drug inspectors, this particular inspector charged the pharmacist as well from whom the drugs were sampled.

Of all the complaints that we studied for this piece, this is one of the more poorly drafted. Unlike other cases where the manufacturer was located in an entirely different state, the manufacturer in this case was located in the same state. Although the Drug Inspector for Jalna District would not likely have jurisdiction over a manufacturer located in Mumbai, it would have been considerably easy to co-ordinate with the drug inspector in that zone since both of them belong to the same agency. However this was not done.

We do not have further information on the current status of this prosecution.

(iv) Drug Inspector, State of Maharashtra v. Akums Drugs & Pharmaceuticals Ltd.& Ors. before the Court of Chief Judicial Magistrate, Jalna: The drug sample in this case was drawn on July 17, 2012 by the Drug Inspector from a company with a licence for wholesale. The drug drawn from the market was “Acemiz-S”, which is a FDC of Paracetamol, Serratiopeptidase & Aceclofenac Tablets. While paracetamol is used to treat fever, Aceclofenac is a non-steroidal anti-inflammatory drug which is used to provide relief from pain and inflammation of the joints. Serratiopeptidase is supposed to have anti-inflammatory properties, although this remains controversial. This FDC is indicated for pain relief and swelling of joints. Although many websites indicate Lupin as the manufacturer of the brand, it appears that Lupin is only the owner of the brand because in this case Lupin indicated to the drug inspector that although it marketed the drug, the manufacturer was Akums Drugs & Pharmaceutical Ltd. whose plant is located in Uttarakhand.

The Drugs Control Laboratory, Aurangabad declared the sample to be NSQ with the comment that “The Content of the Serratiopeptidase in the sample is less (24.93% of the said amount) than the permissible limit:- Not less than 90% of the said Amount.)”.

Once the supply chain to Akums was established, the Drug Inspector served a copy of the test report and sample on the company and asked them to furnish the “documents”. The complaint doesn’t mention which documents were requested. The complaint then notes that Akums did provide some documents but neither mentions nor discusses the content of those documents. The company refused to confirm whether the sample belonged to it because the drug inspector had supposedly not established the supply chain to the company. After receiving permission from HQ a prosecution was lauched on March 19, 2013.

Once again this complaint is short on details with no mention of the details contained in the batch records or even whether the inspector has studied the batch records to establish compliance with manufacturing standards.

It is interesting to note the following remarks of the Bombay High Court, about the drug inspectors in the state: In the case of Shivkumarv. Food & Drugs Administration, State Of Maharashtra MANU/MH/0588/2010, the High Court made the following scathing observations against the Maharashtra Food & Drug Administration after scrutinising an investigation it conducted:

I conclude that the Food and Drugs Department and its officers right from the cadre of Food Inspectors to Joint Commissioner do not have any legal knowledge, legal skill and seriousness with which the provisions of these Acts concerning human health is required. They are casual, callous and hardly concerned. Relevant and concerned provisions/amended provisions of Code of Criminal Procedure are not even known to them to make use thereof. They are making cases only to show that cases are being prepared and instituted in courts and finally tell the people that courts have discharged or acquitted the accused persons and thus save their skin. In my opinion, Government is simply wasting money on Food and Drugs Department and serious view for revamping this department will have to be taken by the Government with strict `accountability’ to be fixed for each and every officer.

These four cases highlight the following: First, the content of the active ingredient as established by the government laboratories is woefully short of what is on the label. In all the cases that we reviewed, there is very little information about whether the government laboratories established an impurity profile for the samples they tested. We do not know what kind of potential adverse events would result from the consumption of these substandard drugs; all we could document was lack of effect. Second, the inspectors clearly do not seem knowledgable about the process for investigation or the science behind manufacture of drugs. It appears that they have no formal training in how to conduct scientific investigations and prepare water-tight prosecutable cases. Third, the comment of the court speaks for itself.

We rely on the competence of the drug inspectors, the regulatory framework and the criminal justice system in the country to keep the drug supply safe in the country. As one can see from these cases, there are gaping holes at each step. And the industry is only too happy to exploit these gaps. Sadly, the highest court in the land thinks this is an academic exercise. Unfortunately, this level of dysfunction and incompetence affects the health of over a billion people who live in India.

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Enforcement measures under the Drugs & Cosmetics Act, 1940 – Part 2: Investigations

Posted by on Mar 22, 2016 in Blog | 0 comments

In my previous post, I explained how unscientific and dysfunctional the sampling process is that is used by both State and Central Drug Inspectors to establish the quality of commercially available medicines in India. Lack of training, consistency of implementation and underfunded budgets bais even conscientious drug inspectors like the ones in Tamil Nadu toward relatively low priced medicines, e.g., antibiotics, anti-acids, steroids, anti-inflammatory drug (NSAID), cough syrups and pain killers. The unfortunate consequence is that expensive drugs such as those used in cancer treatment are seldom tested for quality.

In this blog, I will try and explain how the process works once the analyst in a government laboratory establishes that a sample drawn by the inspector is Not of Standard Quality (NSQ). Under the D&C Act, once the analyst informs the drug inspector that the sample is NSQ, the inspector is required to initiate an investigation to establish the reason for poor quality.

In order to examine and understand the manner in which investigations are conducted, we tried procuring copies of criminal complaints filed by drug inspectors under the Drugs & Cosmetics Act after completion of their respective investigations. These complaints are the starting point for criminal prosecution under the Indian criminal justice system. For the purposes of our research, we targeted three states: Maharashtra, Andhra Pradesh and Tamil Nadu. As always, it was not easy procuring such information under the RTI Act.

Let me begin with Andhra Pradesh (AP) first. We applied for a list of criminal prosecutions initiated by drug inspectors of the Andhra Pradesh Drug Control Administration which were still pending trial in various criminal courts across the state. From this list, we picked cases with different factual circumstances. Three of these cases are explained below. RTI responses that we receicved are accessible by clicking on the respective headings for each of the cases.

(i) Drug Inspector, State of AP v. Quest Laboratories Pvt. Ltd. & its Managing Director before the Court of the Judicial First Class Magistrate at Vizianagaram: In this case, the Drug Inspector visited Central Drug Stores at APMSIDC (AP Medical Services and Infrastructure Development Corporation) located in the cantonment area of Vizianagaram and drew samples of Tinidazole tablets IP 300 mg, Batch No. 02, Mfg. date: 11/09, Exp date: 10/11 manufactured by Quest Laboratories Pvt. Ltd. which is located at Indore in Madhya Pradesh. Tinidazole is an anti-parasitic drug used to treat a variety of amoebic and parasitic infections.

These samples were drawn by the drug inspector on January 2, 2010 and sent to the Drugs Control Laboratory, Hyderabad for testing. The test report declaring the sample to be NSQ was sent back to the drug inspector only on July 21, 2011; it took 19 months for the lab to complete its analysis. It is safe to assume that the entire batch of this product had already been consumed by patients by the time it was declared NSQ! The government laboratory found that the drug had failed disintegration test. Disintegration test is conducted to establish the time it takes for a tablet to completely disintegrate in a chosen medium. If a tablet fails a disintegration test, it means that the tablet has been manufactured incorrectly, for example it could be compressed with inadequate strength. The failure of a tablet to disintegrate properly will affect the way it dissolves in the stomach and its bioavailability. This has a direct impact on the therapeutic efficacy. In the worst case, failure of a disintegration test makes it equivalent to eating chalk. In serious cases of infection, the failure of a drug like tinidazole can possibly result in the death of a patient.

The drug inspector served a copy of the report from the government lab under Section 24(2) on the pharmacist the same day that he received it along with a notice under Section 18A requiring the pharmacist to disclose the name of the manufacturer and the source of the drugs. This notice is important in order to establish the custody of the supply chain from the manufacturer to the pharmacist. A week later, on July 28, 2011 the pharmacist responded to the drug inspector that a batch of 100,000 tablets had been procured from the manufacturer on 10/12/2009.

On the basis of this information, the drug inspector wrote to Quest Laboratories (A1- Accused No.1) on July 20, 2011 with a copy of the test report and a sealed portion of the sample that was drawn from the pharmacy informing the company that it was required to furnish the following details: drug license, list of approved products, constitution particulars, batch manufacturing records and distribution particulars. The company never replied to the notice. A reminder notice was sent on September 8, 2011 and another notice was sent on October 25, 2011 and yet another notice on May 11, 2012. The company apparently didn’t think it was necessary to respond to any of these notices.

After failing to receive responses to all 4 notices, the drug inspector proceeded to file a criminal complaint on June 7, 2012 before the Court of the Judicial Magistrate First Class at Vizianagaram accusing Quest Laboratories and its Managing Director of manufacturing and selling NSQ drug under Section 27(d), failure to furnish information and maintain records as required under Sections 18B, 24, 22(1)(cca), 22(3),28A of the Drugs & Cosmetics Act, 1940.

The time between drawing the sample of the drug (January 2, 2010) and filing of the criminal complaint (June 7, 2012) was therefore 30 months. The time elapsed between the receipt of the test report (July 21, 2011) and filing of the criminal complaint (June 7, 2012) was almost a year. Since this case was listed as pending in the list provided us in the middle of last year, it means that the prosecution has dragged on for more than 3 years – a very long time, for a simple case of a NSQ drug.

Delays apart, also appalling, is the manner in which the investigation was conducted. For example, if an accused isn’t responding to notices, international prosecution standards are that the drug inspector investigating the case should ideally enter the premises of the accused and seize the records and documents required for the criminal investigation. We saw this happen with Ranbaxy when the US Marshals conducted a raid on its offices in Princeton, NJ in February 2007. In the present case, the drug inspector most likely did not have the jurisdiction to exercise such powers because Section 22 of the D&C Act is quite clear that a drug inspector can exercise Search and Seizure provisions only within the local area for which he has been appointed (AP). In such a case, there is nothing preventing the drug inspector from writing to his counterparts in either the CDSCO or in the state drug regulator in Madhya Pradesh (MP) where the drug was manufactured to seek their co-operation. At the very least, one would expect that the licensing authority in MP be informed of the sub-standard medicine detected in AP. The complaint is silent on whether any such attempt was made. By filing a criminal complaint without seeking the batch manufacturing records or testing the stored reference samples, the entire prosecution is weakened. In any criminal prosecution, the guilt of the accused has to be proved beyond reasonable doubt and the criminal complaint filed with the Magistrate should be based on a watertight investigation.

We aren’t aware of the current status of this case.

(ii) Drug Inspector, State of A.P. v. Sri Lakshmi Agencies & its Proprietor before the Court of 2nd Addl. Judicial Magistrate, First Class, Bhimavaram District: We specifically selected this case because the prosecution list showed the manufacturer to be a Chinese company by the name M/s Quzhou Werong Pharmaceuticals and Chemicals Co. Ltd.

The copy of the criminal complaint provided to us narrated the following facts: On May 5, 2011, the Drug Inspector of the Bhimavaram District conducted a raid on the Pharmacy Sri Lakshmi Agencies and discovered that the shop was stocking for sale certain drugs, etc. without the required licences under the Drugs & Cosmetic Act, 1940. Such raids are a fairly common practice in India. During the course of the raid, the Drug Inspector also picked up some “powders” as a sample for analysis and dispatched them to the Drugs Control Laboratory (DCL), Vijayawada on May 22, 2011. A few days after the raid, on May 13, 2011 the proprietor of the shop was served notice under the provisions of Section 18-A ad Section 22(1)(cca) of the D&C Act, 1940 directing him to disclose the source of purchase in order to establish the chain of custody of the drug. In the meanwhile, the Drug Inspector procured certain details of the shop from the Commercial Tax Officer and discovered that the shop in question had actually been registered for fish and prawn medicines and had a turnover of Rs. 41 lakhs over 5 years.

A couple of weeks later on June 9, 2011, the proprietor replied that he was unable to produce the purchase bills of the drugs. The containers seized by the Drug Inspector however mentioned that the importer of the drug was Medipharma Drug House in Mumbai. On September 23, 2011, the Drug Inspector issued notice to this importer requiring them to produce the photocopy of the import license and sales particulars. The letters was returned as undelivered.

On October 18, 2011, the DCL sent back the test reports stating that the samples seized, now disclosed to be Oxytetracycline, were not compliant with the standard laid down in the BP. Oxytetracycline is a broad-spectrum antibiotic, in addition to human use, it is also used on animals. Indiscriminate use of substandard quality of this drug is a key factor in development of drug-resistant pathogens in India. The reports were served on the accused and on the same day a fresh letter was addressed to the importer Medipharma Drug House requiring it to produce the import license and sales details latest by December 1, 2011. The importer replied this time claiming that they neither imported the products in question nor sold it to the accused and that the seized products did not belong to them. The drug inspector took the claim at face value and prosecuted only the firm found to be selling the drug in question.

Although the investigation in this case moved forward relatively quickly, the investigation was hardly satisfactory. Ideally, the drug inspector should have contacted the CDSCO to cross-check Medipharma’s claims because imports are regulated only by the CDSCO in India. If this procedure had been followed, CDSCO would have been able to corroborate Medipharma’s import licences and verify whether any drugs had been imported from Quzhou Werong Pharmaceuticals and Chemicals Co. Ltd. Unfortunately, none of these procedures seems to have been followed.

(iii) Drug Inspector, State of A.P. v. Sri Venkata Ramana Medical and Fancy Stores & Ors before the Court of the 2nd Addl. Judicial First Class Magistrate, Machilipatnam: In this case, the Drug Inspector on February 23, 2010 picked up samples of Glucored forte tablets, manufactured by Sun Pharmaceuticals in Jammu & Kashmir (J&K) and samples of Primolut N manufactured by Zydus Healthcare in Sikkim from the shop of accused no. 1 located in Machilipatnam district. Both samples failed quality control tests. The pharmacist had failed to maintain receipts as required under the law to demonstrate the chain of custody of the supply. Unlike the other cases, the drug inspectors investigating this case, travelled to J&K and Sikkim respectively and contacted their counterparts in those states before meeting the manufacturers themselves. Both Sun Pharmaceuticals and Zydus denied that the drugs in questions had been manufactured by them. The reasons provided by Sun aren’t very clear from the complaint. Zydus claimed that the packaging of the seized samples was different from the control samples for the batch in question. The drug inspector seems to accept this explanation and files the complaint only against the pharmacist and some of the other persons from whom he has claimed to have sourced the tablets.

While this case saw much better inter-agency co-ordination, the failure of the drug inspector to explain in detail his reasons for accepting the explanation given by both Sun Pharma and Zydus that neither of the drugs were manufactured by them is disappointing. Faced with a charge that they were manufacturing sub-standard drugs, the safest defence for a pharmaceutical company is to deny any responsibility. Unfortunately, there is no national systems for us to verify the veracity of these claims. In an ideal outcome, the drug inspector should carefully examine such claims and provide a scientific reasoning for either accepting or discounting such claims in the criminal complaint rather than take the easy way out by prosecuting only the pharmacist.

It is a valid question to ask why we do not see adverse events from such NSQ drugs. The sad reality is that as a country, we do not have a national system of surveillance. The easy way out for practicing physicians is to change the manufacturer if they observe either lack of effect or worse, adverse events from the medicine that they prescribed. The very same products sold in the US market produce more frequent adverse events compared to what are reported in India; do you ever wonder why? If you discount for the quality of manufacturing for products sold in India, one should expect to see a higher frequency of adverse events. Clearly we don’t. It tells us something about the prevailing culture within our practicing medical fraternity and the lack of a consistent national reporting system that holds healthcare professionals accountable.

As we can see from these three cases, drug inspectors are not trained adequately to conduct investigations and frame charges against wrongdoers. Perfuntory investigations such as these engender a culture of complicity between the inspectorate and the very companies they are expected to regulate. This is a major deficiency in the current system.

We invested a great deal of time and effort in procuring these reports from the respective state health authorities to factually establish the dysfunction that engenders poor quality, substandard medicine in India. In the next blog, I will analyze more cases, from other states to show you how the process works across states. Unfortunately, the Supreme Court thought this was an academic exercise and denied us an opportunity to present our case. If what we present here doesn’t demonstrate that the dysfunction we document affects the health of over a a billion people in India, I don’t know what else does.

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Enforcement measures under the Drugs & Cosmetics Act, 1940 – Part 1: Commercial Sampling

Posted by on Mar 16, 2016 in Blog | 0 comments

In the next series of blog posts, I will try and explain how the current regulatory structure encourages the manufacture and distribution of substandard medicine in India. These are the arguments we had hoped to make to the highest court in the land through my PILs, unfortunately, we were denied the opportunity to do so.

In manufacturing, quality of a drug is measured by the product being free from defects, deficiencies and variations. This is achieved by a strict commitment to standards in order to achieve uniformity of the product across every batch manufactured. This is the principle that most health regulators across the world work on when ensuring drug quality. Unfortunately, in India, the starting point for enforcement of quality standards under the Drugs & Cosmetics Act, 1940 is to verify compliance by drawing samples of a drug from the marketplace and testing the product to establish compliance. Samples of commercial product drawn by these drug inspectors are sent to government laboratories for testing by government analysts, against standards prescribed in either the Indian Pharmacopeia(IP) or any of the other Pharmacopeias such as the United States Pharmacopiea (USP) or British Pharmacopiea (BP). If the sample passes the quality check the matter ends; but if a sample fails the quality check, the government analyst informs the drug inspector that the sample is Not of Standard Quality (NSQ). It is up to the discretion of the drug inspector then whether to further investigate and prosecute such cases.

There are two specific issues with this approach. First, by the time it takes an inspector to establish that a particular batch of drug is NSQ, it would have been consumed by millions of patients. Second, such a system of enforcement is inherently dependent upon the size of the sample drawn from the market. Batch-to-batch variability, which is a key aspect of pharmaceutical manufacturing resulting in sub-standard drugs is rarely detected with this approach. Compliance with cGMP, on the other hand, ensures that quality is built into the manufacturing process, rather than being an after-thought. Indian regulators rarely audit manufacturing plants for cGMP compliance because they are not required to. Establishing quality of drugs in India is retrospective and this is partially the reason why foreign regulators discover problems with manufacturing processes than our own. In a country that has literally no systems of surveillance, retrospectively testing for quality is a recepie for unscrupulous companies to flood the market with substandard drugs.

Why does this matter? Think about the simplest of the drugs, antibiotics. If the drug is substandard, meaning it contains less than the required active ingredient, or doesn’t dissolve in the stomach as quickly as is it should, or doesn’t get absorbed in the blood stream as intended, the concentration of the drug needed to kill the pathogen that is responsible for the infection doesn’t materialize. This leads to the pathogens become resistant to drugs, which is what we see in India. Multi-drug resistant Tuberculosis is a direct consequence of this. This is one of the reasons why we wanted the Supreme Court to hear our petition; the current regulatory structure needs to be fundamentally overhauled in order to make it more responsive to public health in India.

Without a fundamental change to our approach, the process of drawing samples from the market place becomes all the more important. It is also necessary that the guidelines for sampling are based on a robust statistical model which covers a wide cross-section of the market. A failure to have well thought out sampling guidelines will skew the entire system of drug enforcement because the sampling guidelines are the starting point of the enforcement framework under the D&C.

In order to determine whether the drug inspectors at the State Regulators and Central Regulator CDSCO were following a well-designed statistical model to draw samples from the market, we filed a series of RTI Applications with the CDSCO and a number of state level drug regulators, asking them the two following questions:

  1. As per Section 23 of the Drugs & Cosmetics Act, 1940 a Drug Inspector is required to tender a fair price for any sample of Drug or Cosmetic picked up for the purpose of testing. In this regard the PIO is requested to provide the applicant with details of the amount sanctioned per inspector over the last 5 years, per year, for the purpose of purchasing samples under Section 23 of the Drugs & Cosmetics Act, 1940.  
  1. While purchasing samples under Section 23, is a Drug Inspector required to follow any guidelines regarding the different types of drugs that are required to be drawn from the market for testing. Please provide the applicant with a copy of any such guidelines.

The first question was important because drug inspectors are required under law to tender a fair price for any drug sample that is purchased from a pharmacist. If an adequate budget isn’t sanctioned to them, it would directly affect the type of drugs that can be drawn from the market. As we all know, oncology drugs, injectables etc are often more expensive than over-the-counter drugs. The second question aimed at understanding what procurement guidelines were followed by each drug inspector for the purpose of drawing samples from the market; whether these sampling guidelines were based on a scientific statistical model. The replies that we received on both counts demonstrated the degree of dysfunction within regulators on this relatively simple issue.

The CDSCO HQ declined to answer the RTIs, preferring instead to divert the applications to its zonal offices. This is a tactic frequently adopted by the CDSCO HQ while dealing with RTI applications. We received responses from three zonal offices: the East Zone (EZ), the West Zone (WZ) and the South Zone (SZ). All three zones claimed that there was no specific budget sanctioned for the purpose of drawing samples from the market and that money was generally drawn from the ‘office expenses’ head of the budget. None of them gave us a specific reply on the amount of money that they spent on drawing samples – such accounts should be readily available with the accounts officers. Given the critical role of sampling in ensuring quality drugs, it is quite surprising that the CDSCO hasn’t budgeted specifically for this task. One wonders why?

With regard to the second question, EZ and WZ did not even bother to provide a reply. The SZ provided a reply to the second question pointing out to the “Guidance Document for Functions and Responsibilities of Zonal, Sub-Zonal and Port Offices of CDSCO”. Page 15 of this document states that each drug inspector should collect at least 5 samples every month for testing from Government dispensaries, hospitals, CGHS dispensaries, rural outlets and from manufacturing premises. The document also makes mention of deputation of drug samplers to specifically carry out this function and that each sampler is required to purchase at least 20 samples per month from the fast moving and generic products. Not a single one of these zones referred to a circular from the DCGI’s office on 20.07.2010 which laid down different criteria: “5 samples from Government dispensaries, hospitals, rural outlets and from manufacturing premises during inspection.” And “At least 5 survey samples of drugs per month shall be collected from manufacturing premises as part of the inspection procedure. This may also include raw material samples from the stores of the manufacturers.” Even this circular (which we found buried in a parliamentary report) does not require a scientific statistical model which would ensure testing of a cross-section of the drugs available in the market.

Of the State Governments who replied to us, we received a range of diverse answers. The regulator in Uttarakhand transferred our RTI applications to various drug inspectors within that state, none of whom actually provided us with details of either the amount they spent on sampling or the guidelines that drug inspectors follow to draw samples. Their replies were mostly evasive. Similarly, the regulator from Gujarat simply stated that no particular amount was sanctioned for sampling but failed to disclose the actual amount spent. It also stated that no guidelines were followed on how to draw samples. The Drug Controller from Karnataka provided some guidelines in Kannada, which we haven’t yet translated. Regarding the amount spent on drawing samples, the authority merely provided a copy of their entire budget outlay for the last 5 years without telling us exactly how much they had spent specifically on purchasing drugs for testing. Our application with the Maharashtra FDA was transferred from their HQ to the Office of the Joint Commissioner whose office promptly replied claiming that they had none of the information and that their HQ would provide the information. The only states which did provide us with some useful information were, Kerala and Tamil Nadu.

The reply from Kerala provides a district-wise breakup of the amount spent on drawing samples. The highest amount drawn by an Assistant Drug Controller (ADC) in any district was Rs. 1,13,800 by the ADC (Kollam) in 2013-014 and the lowest amount for an ADC was Rs. 12,500 by the ADC (Ernakulam) in 2013-14. A separate breakup is provided for Drug Inspectors (DI), with the highest amount being Rs. 48,657 in 2012-13 by the DI of KTM zone, while the lowest was Rs. 1,700 by the DI of WD zone in 2014-15. The high variance in the funds being spent in different zones by different officials could be due to many reasons such as population size etc.

On the issue of guidelines, Kerala informed us that there were no guidelines that it followed while drawing samples.

The reply from Tamil Nadu was by far the most detailed and extensive. The HQ of the Tamil Nadu Food Safety & Drug Administration (TNFSDA) transferred our RTI application across to the public information officers in all zones across the states. Tamil Nadu is perhaps the only state where money is specifically budgeted for the purpose of drawing samples. Most of the individual zones provided a list of the amount that they had spent on sampling drugs. For example Zone III in Chennai city spent an average of Rs. 40,000 every year on drawing samples while Zone II spent Rs. 93,000 in 2014-15 and Rs. 60,000 last year. The Virudhnagar Zone started off with spending only Rs. 12,000 in 2011-12 before its spending increased to Rs. 50,000 in 2014-15, 2015-16. Other zones like Vellore spent close to Rs. 40,000 last year while the Thanjavur zone spent Rs. 1,74,754 last year on drawing samples from the market. One of the lower spending zones was the Thiruvallur zone which spent only Rs. 16,000 in 2014-15 before hiking spending to Rs. 30,000 for 2015-16.

Tamil Nadu as a whole appears to be spending a significant amount of money on drawing samples for testing. Although, it is a still an open question whether the amounts sanctioned are adequate to purchase more expensive medication which can cost thousands of rupees per vial or capsule.

On the issue of guidelines, we received widely inconsistent answers from the different zones within Tamil Nadu. While some zones claimed that there were no guidelines, other zones like Coimbatore did provide us with a copy of guidelines issued on 8.1.2003 by the Director of the state authority. These guidelines basically require each drug inspector to draw 7 samples from the market with at least 3 samples being drawn from government hospitals. The guidelines also state that sampling should be planned well in advance, judicious and drawn from all categories of drug administered on the human body. Since many drug inspectors replied that there were no guidelines, they clearly don’t even know that they exist. In any event, these are far from adequate. Drug inspectors need to be given much better and consistent instructions to ensure that a wide cross-section of drugs are covered in each market to ensure quality of drugs available to Indian public.

If this doesn’t demonstrate regulatory incompetence, I don’t know what else does. Since the sampling process is itself so bereft of method or science, it follows that the rest of the enforcement mechanism is built on a faulty foundation. We spent so much time and effort in collecting and analyzing this information that it is truly a disappointment not to be able to make our case. This is not an academic exercise, as you can see from the data, this affects the health of a billion people living in India.


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Centralising drug licensing in India: The ‘holy grail’ of drug regulatory reform in India

Posted by on Mar 11, 2016 in Blog | 3 comments

One of the main reasons for the abysmal quality of drugs in India is the multiplicity of regulators. The nation of India, which is a common market, has 36 different drug regulators – 1 each of each state and union territory and the Central regulator, the Drugs Controller General of India, DCGI. One of the two PILs that I have filed attempts to change this situation by challenging the Drugs & Cosmetics Rules of 1945 (D&C Rules).

The split of powers between the state and centre

The division of powers, under the Drugs & Cosmetic Act, 1940, between the central and state regulators is complex, confusing, overlapping and thoroughly unsuitable from the regulatory perspective of ensuring uniformity & consistency in standards of drugs quality across the country. While the DCGI, (the central regulator) can issue marketing approvals for ‘new drugs’, certify and regulate imports, it is only the state licensing authorities (the state regulators, SLA) which can issue manufacturing licences and regulate Good Manufacturing Practices (GMP) incorporated in Schedule M to the D&C Rules. Enforcement powers such as prosecution for the manufacture of sub-standard drugs are given to both the state and central regulators.

Off all the statutory powers listed above, licensing of manufacturing units is the most critical regulatory activity with the direct impact on the quality of drugs. By virtue of Rule 71(2) of the D&C Rules, a manufacturing licence can be issued to only those manufacturers complying with the GMP which are under the purview of Schedule M to the D&C Rules. A facility found to be in violation of GMPs will therefore be in violation of the terms of its manufacturing licence and can either have its licence suspended or cancelled by the SLA who issued it. Under the D&C Rules, any appeal against this decision by a SLA can be made to the respective State Government. In the regulatory world, the power to cancel or suspend a manufacturing licence is significant because it can result in the shut-down of a pharmaceutical company.

The main problem with having multiple SLAs is the lack of consistency and uniformity in enforcement activities because each SLA follows its own interpretation of the law. One of the key challenges with 35 different SLAs is the sheer logistics of co-ordination among them – the Drugs Consultative Committee (DCC) is a statutory body that is meant to serve as the forum for this objective. Unfortunately, DCC meets once a year, therefore it is not able to address real situations on a concurrent basis. To complicate efforts, each state has their individual organisational setup and different recruitment rules to the SLAs, which makes consistency in enforcement completely impractical.

For example, a pharmaceutical company found to be making sub-standard (Not of Standard Quality, NSQ) medicine is liable to get its manufacturing licence suspended for a fixed duration of time under Rule 85-I. Currently, each SLA enforces this regulation for different durations. While states like Himachal Pradesh claim to suspend licences for a duration ranging from 1 month to 6 months, Gujarat suspends licences for a just day or more. Furthermore, when a state like Tamil Nadu detects a NSQ drug manufactured in HP, it can initiate criminal prosecution against the manufacturer – a process which can take several years at best and result in only a slap on the wrist for this violation; in the meantime, the SLA in Tamil Nadu can do nothing to stop the manufacturer from continuing to flood the state with sub-standard product because the licence is issued by the SLA of Himachal Pradesh. In the best case, the SLA in Tamil Nadu can refer the case to the SLA of Himachal Pradesh, which is then at liberty to do what it wants with the manufacturing facility. Since each SLA operates directly under the state government, political interference is guaranteed in most cases. While this is happening, the rest of the country has absolutely no way of keeping the offending manufacturer in Himachal Pradesh out of their respective markets because India has a common market and there are no barriers in inter-state commerce for drugs, i.e., once a company procures a manufacturing licence from one state, it can sell its drugs across the country without additional permission from each state. Thus, although a pharmaceutical company licensed by one particular state can unleash its sub-standard medicine on all states of the country, it is accountable to only the SLA in its home state. In a manner of speaking, such regulation results in a ‘democracy deficit’ whereby the people of one state are forced to bear the consequence of poor governance in different state which is governed by representatives elected by people in that state.

Over the last decade, the Government of India has tried not once but twice to centralize some aspects of licensing of drug manufacturing through the Drugs & Cosmetics (Amendment) Bill, 2007 and the Drugs & Cosmetics (Amendment) Bill, 2013. Both bill were meant to realise the recommendation of the Mashelkar committee to centralise licensing activities. Neither Bill was enacted into law.

The legal challenge I raised in the PIL

To understand the legal challenge, it is first necessary to understand the history of the Drugs & Cosmetics Act from 1940 to 1960 and the policy debates which led to a critical amendment in 1955.

The Drugs Act, 1940  

The Drugs & Cosmetics Act was originally enacted in 1940 as the Drugs Act by the Indian Legislature before independence from British rule.

Although enacted as a Central Legislation, the Drugs Act, 1940 split regulatory powers between the Centre & Provinces. The Act delegated substantial powers to both the Central and the Provincial Governments to draft rules for the setting of standards for their respective areas of regulation i.e., import and domestic manufacture/sale, respectively. Section 33 as it existed in 1940 specifically delegated to the Provincial Governments the power to issue licences for the manufacture of drugs and also the power to nominate the authority empowered to issue such licences. The language of Section 33 as it existed in 1940 is reproduced as follows:

Section 33 (1) The Provincial Government may, after consultation with the Board and after previous publication by notification in the official Gazette, make rules for the purpose of giving effect to the provisions of this Chapter.

(2) Without prejudice to the generality of the foregoing power, such rules may-

(e) prescribe the forms of licences for the manufacture for sale, for the sale and for the distribution of drugs or any specified drug or class of drugs, the form of application for such licences, the conditions subject to which such licences may be issued, the authority empowered to issue the same and the fees payable therefor;

The Drugs Act, 1955

After independence from the British in 1947, the government constituted the Pharmaceutical Enquiry Committee to study and recommend policy reform for the country’s fledgling pharmaceutical industry. In its final report, submitted to the Government in 1954, the Committee made strong recommendations to centralise regulation. Commenting on the poor manufacturing standards in the factories inspected by the committee members, the report commented:

The products of these factories were a menace not only to the particular State, in which they were located, but also to the neighbouring States, to whose market they found their way. The people of the neighbouring States were in no way benefitted in spite of the fact that the Act was being administered there in a better manner. When these points were brought to the notice of the State Drugs Controllers, they appeared to be helpless in the matter, either because they were afraid that by closing down such factories, it might lead to employment, labour unrest etc., or they had their own misgivings of the powers delegated to them under the Drugs Act to take such steps. It is, therefore necessary to centralise the administration of the Drugs Act to bring about a uniform implementation of the Drugs Act throughout the country for proper co-ordination with the working of the Industries (Development & Regulation) Act to be possible.”

In the same year, the Government of India moved the Drugs (Amendment) Bill, 1954 in Parliament. The ‘Statement of Object & Reasons’ appended to the Bill explained the intention behind the Bill by saying “It has further been found necessary that with a view to maintaining uniformity throughout the States the power to make rules under Chapter IV with respect to the manufacture, sale and distribution of drugs, which is at present vested in the State Governments should be entrusted to the Central Government.”

The specific amendment proposed by the Bill was to transfer all the power to regulate domestic manufacturing under Section 33 from the state governments to the central government. As a result the phrase “provincial government” in Section 33 was replaced with the phrase “central government”. The Bill was enacted into law in 1955.

Since Section 33 effectively delegated the power to regulate the drug industry to the Central Government, the actual nuts and bolts of the regulatory framework were to be notified through rules. In 1960, when the Central Government finally amended the Drug Rules, 1940, it surprisingly sub-delegated to state governments, the power that was delegated to it by Parliament. Rules 69 specifically sub-delegated to the State Government the power to appoint licensing authorities to regulated manufacturing in their states. This was contrary to the intent of Section 33.

In other words, the Rules were amended in a manner which went completely against the letter and spirit of the Drugs (Amendment) Act, 1955.

The legal argument

Our PIL challenged the constitutional validity of Rule 69 and other associated rules on the grounds that the Central Government did not have the power to further sub-delegate the power to appoint licensing authorities to the State Governments. One of the principle of statutory interpretation, relevant to this case, is delegatus non podest delegare which means that an authority to whom power has been delegated by a statute cannot further sub-delegate that said power to another authority unless the language of the authority expressly allows for such a delegation of powers. The logic behind this maxim is simple: a delgatee of power cannot act beyond the scope of power delegated to it. This rule against the sub-delegation of power, unless it has expressly been allowed for in the text of the statute, has been reiterated time and again by the Hon’ble Supreme Court of India in several cases.

Put simply, Parliament delegated the power to appoint licensing authorities to the Central Government and it is only the Central Government which can appoint the licensing authorities.

I was hoping that my counsel would present this argument before the court; unfortunately, we were denied this opportunity. This is not an academic argument, it impacts the health of over a billion people in India.

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