Jan Vishwas Bill: Will manufacturers of substandard drugs get away with just a fine?

The Jan Vishwas bill was brought to the parliament with an aim to improve ease of doing business. It will amend 183 provisions across 42 laws to do away with imprisonment or fines for certain offences.

It was passed in the Lok Sabha last week.

What changes does the Jan Vishwas bill make to the drug law?

The Jan Vishwas Bill will make two changes to the Drugs and Cosmetics Act, 1940.

The first amendment, which is not contentious, will do away with imprisonment under section 30 (2) of the current law for companies repeatedly using government analysis or test reports for promoting their products. At present, companies face up to two years imprisonment and a fine of not less than ten thousand rupees for a repeated violation. This will change to only a fine but not less than five lakh rupees as per the amendment proposed in the Jan Vishwas bill.

The second amendment – and this is the contentious one – will change section 32B (1) of the existing law to allow “compounding” of offences under section 27 (d). Compounding is a legal provision that allows one to pay a fine instead of undergoing criminal proceedings. What this essentially means is that companies violating the provisions of 27 (d) will continue to face imprisonment between one and two years and a fine not less than R20,000. But, now there will be an alternative mechanism where the company could agree to pay the fine instead of going through a criminal proceeding in court.

Section 27 of the existing Drugs and Cosmetics Act has provisions for punishments for different types of offences — a) adulterated or spurious drugs that lead to death or grievous injury carrying a sentence of up to life imprisonment, b) adulterated medicines that do not fall under the previous category of medicine manufactured without a licence carrying a sentence of up to five years, and c) spurious medicines other than the ones that fall under the first category carrying a sentence of up to seven years. Section 27(d) covers any offence not covered under a, b, and c category.

While the existing drug law already allows for compounding other offences, the reason many have raised an issue with including section 27 (d) is because it also includes drugs that are not of standard quality (NSQ), colloquially referred to as substandard drugs.

So, what kind of offences by drug manufacturers could be compounded?

The provisions will be available to manufacturers whose drugs might be NSQ. A drug being NSQ means that it fails some of the requirements set for that particular product by the Indian Pharmacopoeia. This would include drugs that fail dissolution test (measure the rate at which a tablet or capsule releases the active ingredient in the body) or those that do not contain the full dosage of medicine as mentioned on the medicine cover.

Prashant Reddy T, a lawyer specialising in drug regulation, explains that NSQ drugs are not entirely without harm. He says, an antibiotic containing 30% of the active ingredient as mentioned on the pack can lead to a person’s infection not getting treated effectively and the bacteria becoming antibiotic resistant.

Dinesh S Thakur, an expert on drug regulation in India who works with Reddy, in a tweet cited examples of such medicines with low levels of active ingredients or those with bacterial endotoxins (bacterial particles that can lead to immune response such as fever and even anaphylactic shock) being prosecuted under section 27 (d). They say that the provision can be used by companies to get away with manufacturing substandard products by paying a fine.

The government, however, maintains that the provision for compounding will be available to manufacturers who face imprisonment for charges with minor aberrations or quality control measures. “This provision will be available on a case to case basis only to companies that do not manufacture spurious or adulterated drugs, those who do not have the intention to manufacture substandard drugs, and those who take precautions against it,” said an official from the union health ministry.

Another official added: “In several cases under section 27(d) the drug inspectors painstakingly prepare a case, it stays in court for years, and then the manufacturer anyway has to just pay the fine. Or, sometimes companies with minor deficiencies they are willing to correct are stuck in litigation for years. Compounding is an alternate mechanism in these cases. It is like a traffic challan– if they accept the fault, correct the deficiencies, and pay the fine, then they can avoid the court proceedings. If they do not accept the fault or the fine, then the court proceedings will happen as usual.”

They said: “This will of course not be available to companies that are repeat offenders. The government does have a list of offenders and compounding will be decided based on that. The government has to choose the less harmful path – if every offence is imprisonable then many would not want to work in the sector.”

What has it got to do with good manufacturing practices?

The drug act in the schedule M lists all the requirements such as space or processes for drug manufacturers. The changes that were made to this schedule in 2018 to improve drug manufacturing in the country are yet to be adopted by a majority of drug manufacturers. The health ministry on Wednesday said that bigger companies with a turnover of over 250 crores will need to implement these measures within six months and smaller companies within a year.

Those who do not implement the measures within the stipulated time will also be prosecuted under section 27 (d).

What do manufacturers say?

Manufacturers say allowing compounding is actually a good move and prevents companies from being stuck in litigation for years for minor offences.

An industry expert, on condition of anonymity, said: “It has been a long standing demand of the industry that minor offences be decriminalised to reduce harassment of the business owners. Getting imprisoned is a big deal in society and sometimes, people lose their business by the time the court proceedings get over.” They said that minor aberrations may slip in sometimes, without the intention of the owners, in such cases they should not be imprisoned, especially on their first offence.

The added: If companies are found to repeat such offences, of course, strict action should be taken against them. “Allowing compounding of some offences but strict punishment for repeat offences or offence with the intent will not only help the pharmaceutical industry flourish but also ensure that they make quality products.”