Manufacturing Drugs and Cosmetics

Manufacturing Drugs and Cosmetics

Manufacturing Drugs and Cosmetics

Drugs and cosmetics fall among the list of substances which must be delicately handled. While it can be a life-saving remedy, it can also be a bane with inappropriate usage. This prompts the need for a regulation, which in India can be found in the Drugs and Cosmetics Act of 1940. This article explores the norms pertaining to the manufacture, sale and distribution of drugs and cosmetics as laid out in this Act.

Manufacturing Restrictions

As per the directions of the Drugs and Cosmetics Act, the following drugs are prohibited from being manufactured for sale, distribution, exhibition or from being offered for sale:

  • Drugs and cosmetics of sub-standard quality
  • Misbranded drugs or cosmetics
  • Adulterated drugs
  • Spurious drugs or cosmetics
  • Patent or proprietary medicine (if it doesn’t depict the exact formula or list of active ingredients and its quantities on its label or container)
  • Any drug which purports or claims to prevent, cure or mitigate any disease or ailment
  • Cosmetics that consist of any ingredient which may render it unsafe or harmful for use.
  • Any drug or cosmetic which is manufactured in contravention of the conditions specified.
  • Trading of any drug or cosmetic by not complying with the provisions of this Act.

Note: The restrictions mentioned above do not apply for the manufacture of drugs or cosmetics in small quantities for examination, test or analysis.

Standards of Quality

Drugs are considered to be of a quality standard if it complies with the standards prescribed in the Second Schedule. On the other hand, cosmetics are provided with this tag if it complies with the standards prescribed for it.

Misbranded Drugs

A drug is said to be misbranded if:

  • It is coloured, coated, powdered or polished in a way any damage is concealed.
  • It hasn’t been labelled in the required manner.
  • It bears any statement, design or device which makes a dubious claim or is misleading in any manner.

Misbranded Cosmetics

A cosmetic is said to be misbranded if:

  • It is painted with a colour which hasn’t been prescribed for this purpose.
  • It isn’t labelled in accordance with the requirements of this provision.
  • Its label, container or anything representing it includes any dubious or misleading statement.

Adulterated Drugs

A drug is classed as adulterated if:

  • Its ingredients comprise of any filthy, putrid or decomposed substance.
  • It is prepared, packed or stored under inappropriate conditions.
  • Its container includes any poisonous or deleterious substance which could be injurious to health.
  • It is not coloured with the prescribed colour.
  • It contains any toxic or harmful substance.
  • It includes any substance which has reduced its quality or strength.

Spurious Drugs

A drug is considered to be spurious if:

  • It is manufactured in the name of another dug.
  • It is an intimation of a drug or a substitute for another drug.
  • It resembles another drug in terms of its name or labelling.
  • The label or container of the drug has the name of an individual or company purporting to be the manufacturer of the drug, the likes of which are fictitious and non-existent.
  • It has been substituted by another drug or substance.
  • It claims to be the product of a manufacturer of whom it is not associated with.

Spurious Cosmetics

A cosmetic is considered to be spurious if:

  • It is manufactured in the name of another cosmetic.
  • It is an intimation of a cosmetic or a substitute for another cosmetic.
  • It is similar to another cosmetic in a way which may deceive the name of another cosmetic (not applicable if the cosmetic plainly and conspicuously depicts its true character and its lack of identity with such cosmetic).
  • It claims to be the product of a manufacturer who is not actually vested with its ownership.

Section 18 and its Implications

Section 18 of the Drugs and Cosmetics Act states that a drug shall not be classed as misbranded, adulterated, spurious or lacking quality if:

  • It includes any innocuous substance or ingredient which must be included in it as an article of commerce, provided that it is in a state which is fit for carriage or consumption and doesn’t conceal its inferior quality or other defects.
  • The drug or cosmetic was exposed to unintentional and unavoidable inclusion of a foreign substance during its manufacture, preparation or conveyance. However, no excuses are applicable to the sale or distribution of the drug or cosmetic after the vendor gets to know of such intermixture.

A person, who isn’t the manufacturer of a drug or cosmetic or its distributor, wouldn’t be held liable for a contravention under this section if:

  • The drug has been bought from a duly licensed manufacturer, distributor or dealer.
  • The concerned trader wasn’t or couldn’t have been aware that the drug or cosmetic was against the required mandate.
  • The drug and cosmetic were properly stored and maintained by the trader.

Disclosure of Premises

Every manufacturer, seller or distributor of a drug or cosmetic is mandated to make a complete disclosure of the place of manufacture or maintenance of the drug or cosmetic to the inspector concerned.

Penalty

  • If any drug manufactured or sold under these provisions are adulterated, spurious or is likely to cause any injury or death to the concerned person; the concerned manufacturer, seller or the distributor will be punished with a term of imprisonment which shall not be less than five years but which may extend to a life term. The imprisonment will be substituted or combined with a fine of not less than Rs. 10,000.
  • If the manufacture or trade of an adulterated drug is conducted without a valid license, the concerned person will be imprisoned for a term which is not less than a year but which may extend to three years. This would be combined with a fine which would be fewer than five thousand rupees.

Note: Apart from these, the penal provisions of this concept are numerous and will apply accordingly.

Cognizance of Offence

Prosecutions under this Act could only be instituted by:

  • An inspector
  • An aggrieved person
  • A recognized consumer association

On the same page, offences under this Chapter shouldn’t be tried in a court which is inferior to that of a Metropolitan or Judicial Magistrate of the first class.

On a concluding note, we like to notify our readers that the provisions covered in this article do not apply for Ayurvedic, Siddha or Unani drugs.

The Drugs and Cosmetics Act also deals with the norms pertaining to the import of these commodities, here’s your guide for it.  

A drug business, be it its manufacture, sale or distribution can only be pursued with a license, click here to be guided on how to obtain this license. 

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Post by Sreeram Viswanath

IndiaFilings is India's largest online compliance services platform dedicated to helping people start and grow their business, at an affordable cost. We were started in 2014 with the mission of making it easier for Entrepreneurs to start their business. We have since helped start and operate tens of thousands of businesses by offering a range of business services. Our aim is to help the entrepreneur on the legal and regulatory requirements, and be a partner throughout the business lifecycle, offering support at every stage to ensure the business remains compliant and continually growing.