PDMA Moves Punjab HC Against Joint Inspection Of Pharma Units By CDSCO and State Drug Inspectors

Mumbai, 22 May 2018: The Punjab Drug Manufacturers Association (PDMA) has filed a writ petition in Punjab High Court against the Union Health Ministry's Notification No. GSR 1337 (E) dated 27.10. 2017 which allowed joint inspection of pharmaceutical units by Central Drug Standards and Control Organisation (CDSCO) and the state drug inspectors. So far, such inspections were carried out by state drug inspectors alone. 

The notification mandates that the CDSCO shall jointly inspect units with state inspectors so as to check compliance of Good Manufacturing Practices (GMP). Licenses to new units shall also be subject to joint inspections prior to grant of license and risk- based inspections shall be carried out in units whose samples fails quality tests. 

PDMA president Jagdeep Singh said that the writ petition was filed under Articles 226/227 of the Constitution of India against Govt of India for quashing Rules 73AB, 84C and 143-A of the Drugs and Cosmetics Rules, 1945 which were amended vide Notification No. GSR 1337 (E) dated 27.10. 2017 being violative of Articles 73, 162 and 256 of the Constitution and Drugs and Cosmetics Act, 1940 and Rules, 1945, besides being against the object of Micro Small and Medium Enterprises Development Act, 2006. 

Singh said the manufacturers contend that the functions of central and state governments are clearly demarcated in the Constitution and the Drugs Act. The central government regulates import of medicines and is responsible for approving licenses for WHO certified export units, large volume parenteral, blood banks and vaccine units. It also entrusted with framing rules to uniformly implement the Drugs Act. Powers to license and regulate industry is vested in the state governments. 

He said such joint inspections have already started in Punjab. CDSCO inspectors have also started lifting samples in Punjab even when there is no provision for it in Drugs Act to launch prosecution in case the samples fail the prescribed standards. This power is vested in the state government under Section 18 of the Drugs Act. Manufacturers allege that the purpose of CDSCO is to conduct Risk Based Inspections in case the samples fail quality tests. State authorities, despite knowing fully well that the Notifications are illegal, quietly abide because they are part of bureaucratic hierarchy - the apex of which is the Authority which issued the Notification.

The grouse of industry is that the illegality has created an Inspector Raj and a burden which industry does not afford especially in view of levy of a stringent GST regime. Manufacturers in Punjab suffered a 20% disadvantage in taxes for 12½ years vis a vis neighbouring Tax Holiday States which ended in June 2017 with levy of GST. During this period the turnovers of units in Punjab dipped. Even Prime Ministerial intervention in 2006 could not help remove excise anomalies because despite excise duty reduction from 16% to 4% the disparity remained 20% such was the power of vested interests. There is no respite from the onslaught. Punjab manufacturers argue that if they had also enjoyed the 20% tax advantage for 12 years they would not have opposed the change. It is strange that Central Inspectors for joint inspections neither have better experience nor qualifications as compared to the State Inspectors but they are thought to be some special humans who can do something the state inspectors cannot do. Pharmabiz