INTERIM REPORT
OF THE EXPERT COMMITTEE ON
A COMPREHENSIVE EXAMINATION OF DRUG REGULATORY
ISSUES, INCLUDING THE PROBLEM OF SPURIOUS DRUGS

MINISTRY OF HEALTH AND FAMILY WELFARE,
GOVERNMENT OF INDIA

AUGUST 2003

CONTENTS

EXECUTIVE SUMMARY

1. INTRODUCTION

2. APPROACH ADOPTED BY THE COMMITTEE

3. CURRENT DRUG REGULATORY SYSTEM

1. There has been a wide-ranging national concern about spurious/counterfeit/ substandard drugs. The Supreme Court of India, the National Human Rights Commission and the Members of Parliament have time and again expressed a concern about improving the Drug Regulatory system in the country. The Drugs and Cosmetics Act has not been reviewed in a comprehensive manner since its inception although the Rules have been amended from time to time. The Government of India, in the past, had constituted several Committees, which had examined the issues and had made many recommendations. These recommendations have been implemented by the Government to some extent, but the core issues have remained unresolved.
2. The Government of India decided to constitute an Expert Committee under the chairmanship of Dr. R.A. Mashelkar to examine all the aspects regarding the regulatory infrastructure and the extent and problem of spurious/substandard drugs in the country. The Committee was asked to make recommendations and suggest a roadmap for implementation of the recommended measures so that this problem could be solved in its entirety. The Committee had an eminent scientist, an eminent lawyer, former police commissioners as its members. Officials representing key Ministries/Departments/States/ drug manufacturers, trade, consumer and professional associations were also inducted as members. Drugs Controller General (India) acted as the Member Secretary.
3. The Committee examined the broader issues by looking at the recommendations of earlier committees, the extent of progress made and the bottlenecks in implementation of the recommendations. The Committee noted that while some measures had been initiated by the Central Government, much more needed to be done to improve the regulatory system. Further, the response to these issues at the State Government level was a matter of special concern.
4. The Committee noted that although the Drugs and Cosmetics Act has been in force for the past 56 years, the level of enforcement in many States has been far from satisfactory. The non-uniformity in the interpretation of the provisions of laws and their implementation and the varying levels of competence of the regulatory officials were the main reasons for this less than satisfactory performance.
5. The Committee noted that in the light of the assessment and the recommendations of several committees, the Ministry of Health & Family Welfare had made proposals for expansion and upgradation of CDSCO. Several posts to strengthen port offices, zonal offices and testing laboratories were also created. These posts could not be filled due to the administrative complexities and have since lapsed. Efforts were made to revive these posts, but there have been no final approvals obtained till date.
6. In 1999, the Pharmaceutical Research & Development Committee (PRDC) had recommended comprehensive strengthening of CDSCO to enable it to carry out the multifarious activities that the department was expected to perform. The Committee noted, however, that inspite of the fact that three years had lapsed from the acceptance of the PRDC report by the Government, no infrastructural improvement in respect of manpower had occurred in CDSCO.
7. The idea of setting up of National Drug Authority (NDA) starting with the Hathi committee report (1975) was reiterated by drug policy (1986), and drug policy (1994). However, it was not implemented.
8. The Committee concluded that the problems in the regulatory system in the country were primarily due to inadequate or weak drug control infrastructure at the State and Central level, inadequate testing facilities, shortage of drug inspectors, non-uniformity of enforcement, lack of specially trained cadres for specific regulatory areas, non-existence of data bank and non- availability of accurate information.
9. The Committee concluded that the existing infrastructure at the Center and States was not adequate to perform the assigned functions efficiently and speedily. The Committee felt that creating another authority will not solve the problem at hand. It was essential to strengthen the existing organisations to enable them to undertake all the functions envisaged for NDA. A strong well equipped and professionally managed CDSCO, which could be given the status of Central Drug Administration (CDA) was the most appropriate solution. A detailed proposal to create such a structure and strengthen the State level regulatory apparatus with complementary roles of the Centre and the States, while at the same time ensuring uniform and effective implementation, will be provided in the final report of the Committee.
10. The Committee noted that the onus of monitoring drug manufacturing standards, drawing and testing of samples, taking legal action against infringers, all rested primarily with State Drug Regulatory agencies. Hence for any effective intervention, it was essential that the State Governments strengthen and support their Drug Control organizations. This will include provision of additional personnel, with top class technical and investigative skills, appropriate infrastructure and adequate resources. Despite several directions from the Central Government, many State Governments are yet to upgrade the drug testing facilities and competence of their regulatory infrastructure to desired level.
11. The information collected from the States in response to a questionnaire by the Committee reveals serious inadequacies of the regulatory apparatus. Out of the information received from 26 States/UTs, only 15 drug-testing laboratories are functioning. Out of 15 States having their testing laboratories, only 7 were reasonably equipped/staffed, while the others were poorly staffed and did not even have the bare minimum equipment.
12. The Committee further observed that right from the time of Hathi committee report (1975), the States had been repeatedly requested to set up an intelligence cum legal cell but so far only 10 States had reported to have set up such cells. It is not certain as to how many of these are really functioning actively and effectively.
13. The Committee examined the various reports and statistics presented at various fora and the media by diverse individuals, associations and agencies concerning the extent of menance of spurious drugs. They ranged widely between 0.5% (based on the cases analysed by State regulatory authorities reported in this Report) to 35% (ascribed to WHO Studies). However, WHO itself has written in response to a querry from the Indian Government that ‘There is no actual study by WHO, which concludes that 35% of World’s spurious drugs are produced in India’. Some quantum of spurious drugs in the market quoted is available based on cases detected in selected pockets and regions in the country. Validation of the claims made by several agencies was not available as concrete and authenticated evidence at the time of the submission of the interim report.
14. The Committee has concluded that it is absolutely essential to evaluate systematicaly and scientifically the extent of the problem. For this purpose, several approaches including the model proposed by the Delhi Pharmaceutical Trust were considered by the Committee. It is recommended that a scientifically and statistically valid methodology should be used to evaluate and quantify the extent of the problem of spurious drugs at various levels in the supply chain at the Regional and National levels. The Committee strongly recommends that the Government should provide the necesary funds and the study should be undertaken at the earliest.
15. The Committee has come to the conclusion that while the present Drugs And Cosmetics Act contains various provisions for effective punitive action against manufacturers and distributors of spurious drugs, more deterrent measures were needed. Although in the overal context of legal system, the offences having penalty of more than 3 years are construed to be cognizable, there is a need to make a distinct provision in the Drugs and Cosmetics Act itself declaring all offences related to spurious drugs as cognizable and non-bailable. Apart from penalties of stiff fines and imprisonment for life, specifically in those cases which had resulted in grievous body harm or loss of life, death penalty was required to be provided.
16. The Committee noted with dismay that most of the prosecution cases pertaining to offences related to spurious drugs remain undecided for years. There is no greater deterrent than a ‘severe’ and ‘sure’ punishment. This problem needs to be solved squarely by making a separate provision for speedy trials of such offences.
17. For effective and successful implementation of the penal steps, it is necessary to involve the Police authorities in addition to the Drugs inspectorates, at an early stage, by authorising them to file prosecutions for spurious drug offences under the Drugs & Cosmetics Acts. It may be necessary to invoke changes in the related statutory provisions including fresh legislations for effective implementation of the steps needed to be taken for both punitive and deterrent punishments to those involved in criminal acts of manufacture and distribution of drugs, which may lead to mortality or serious threat to life of innocent consumers.
18. The Committee recommends that Drugs and Cosmetics Act should be suitably amended and the maximum penalty for sale and manufacture of spurious drugs causing grievous hurt or death should be enhanced from life imprisonment to death. Likewise, the Government should make the penalties more deterrent for other related offences.
19. While the prevailing penalties are decided by the courts following normal legal procedures, it is imperative that there should be an effective deterrence against such offenders at the investigation level itself. The Committee, therefore, recommends a specific provision in the Drugs and Cosmetics Act that will allow persons indulging in spurious drug offences to be detained for a minimum period.
20. Specific recommendations for amending the provisions of existing Drugs & Cosmetics Act 1940 to give effect to the recommendations in 14-19 above have been made by the Committee. The details can be seen in Annexure-13 of the Interim Report.
21. The Committee is of the view that the responsibilty for effective management of the issue of spurious drugs, their manufacture and distribution lies not only with the Drug Regulatory Agencies at the Centre and in the States and the Police, but also with all the other stake holders, namely the medical and para-medical professionals, pharmaceutical companies, distributors and retail trade, patients, the media, the NGOs and the public at large. This is largely because these components of the healthcare system are the most affected and in many cases are the first contacts in the supply chain.
22. The Committee feels that, while, many of the stake holders, such as the Regulatory Agencies and the Pharmaceutical Companies have sufficient expertise to detect and analyse spurious drugs, others need to be made aware of the problems involved, the potential grievous harm which can be caused and the intiatives they could and should take in tackling this menace. The Committee suggests that the industry and trade associations should play a more active and collaborative role as has recently been done by Indian Pharmaceutical Alliance (IPA) to arrest the menace of spurious drugs in the country. Specific recommendations conerning the way ahead have been made in the Interim Report.
23. The final report of the Committee will comprehensively deal with the issue of implementation of all the rules and regulations which guide, monitor and control the activities of the providers of the healthecare system in the country and the way to bring them upto international standards. It will provide the design of Central Drug Administration (CDA), its size, functions, the funding and the sharing of the responsibilities vis-a-vis the States. It will also deal with the regulatory issue of products of Indian system of medicines, therapeutic foods and dietary supplements, medical devices and prosthesis, etc. It will address the issue of clinical research, an emerging opportunity for India. It will also deal with the policies and guidelines for newly emerging products and devices due to the rapid advances in technology, including modern biotechnology.

1. Recommend a new structure for the Drug Regulatory System in the country including the setting up of a National Drug Authority.
2. Recommend measures to strengthen the drug regulatory infrastructure in Center and States.
3. Evaluate the extent of the problem of spurious and sub-standard drugs and recommend measures required to deal with this problem effectively.
4. Recommend changes required in the Drugs and Cosmetics Act, 1940 as well as in judicial procedures related to offences committed under this Act.
5. Recommend steps to be taken by the Pharmaceutical Industry and Pharmacy Association to tackle the problem of spurious drugs.
6. Consider and advise on any other issue incidental to the above
7. Devise road maps for implementation of all recommended measures.

The idea of setting up of National Drug Authority (NDA) started with the Hathi committee report which, under chapter –IV stated -

“The committee believes that health care has a direct relationship with socio economic growth of the country and a welfare state should treat production, procurement and distribution of essential drugs, as a social responsibility just as import as ensuring supply of food and shelter. With a view to tackling the problem of large scale production of a Statutory Body which may be called the National Drug Authority of India (NDA)”.

The report had mentioned several functions for NDA. The Government of India, however, did not accept this recommendation and no action was taken for creating NDA. Thus the drug policy formulated by Government of India for the first time in 1978, did not include the concept of NDA.

The concept of NDA was again included in the policy document of 1986, titled “Measures for Rationalization, Quality Control and Growth of Drugs and Pharmaceutical Industry in India”. In this document, in Part –III, under the main heading “Rational use of Drugs” with sub-heading, 3.1 “Registration of new formulations, Rationalization of Existing Formulations and Creation of the National Drug Authority”, it is stated -

“New formulations based on Drugs already approved for use in the country would not be allowed to be manufactured unless their therapeutic efficacy and rationality are adequately tested and proved. A machinery called the National Drug and Pharmaceutical Authority would be established at the Central level, with a permanent secretariat”.

The nomenclature used here is National Drug and Pharmaceutical Authority (NDPA). It may be seen that the concept of NDPA as described above did not define its functions & responsibilities with clarity. It was the responsibility of DCGI to ensure that new formulations are allowed to be manufactured only after their safety, efficacy and rationality are established. It was not made clear as to whether the functions of DCGI were to be transferred to the proposed NDPA or whether DCGI was to be re-designated as NDPA.

The Drug Policy announced in 1994 once again envisaged setting up of an independent body called NDA (and not NDPA). It was to be set up by an Act of Parliament for providing a more efficient mechanism for ensuring quality control and rational use of medicines.

The NDA was envisaged to be an autonomous body, to be set up by an Act of Parliament. The main objective of constituting the NDA is to create an independent empowered body that could function with a higher degree of independence, to strengthen the drug control system in the country and to enforce appropriate quality standards of medicines and Good Manufacturing Practices (GMPs), with conviction and intent. It would regulate all matter relating to introduction and rational use of drugs, in particular, the registration of new formulations and rationalization of existing formulations. It would also be assigned the specific function of quality control and quality assurance with a predominantly inspectoral role to ensure adherence to standards, specifications and manufacturing capabilities and practices.

1. To develop and define basic appropriate standards relating to the manufacture, import, supply, promotion and use of drugs.
2. To enforce effectively appropriate quality standards of medicines and Good Manufacturing Practices, throughout the country, having full regard to the needs of public health and standardize dosage strengths and pack sizes of formulations with a view to check proliferation.
3. To approve and register pharmaceutical products for use in the country only if: -
   
   a. it meets real medical need.
   b. it is therapeutically effective, and
   c. it is acceptably safe.
   
4. To monitor standard practices in drug promotion and use and to clearly identify those, which are acceptable and prohibit those, which are unethical and against the consumers’ interest.

   1. To monitor standard practices and to evaluate their appropriateness for the purpose of guiding the medical profession and for achieving the aim of rational prescribing.

   2. To ensure that appropriate information about the registered pharmaceuticals is made available for the guidance of consumers having regard to

   a. The adverse consequences of non-compliance by patients particularly in case of antibiotics, steroids etc.,

   b. the dangers of self medication, and

   c. the need to involve consumers as partners in the health care system.
   
   3. To prepare and publish a national formulary and formularies relevant to various levels (like district hospital, community center, primary health center) for the guidance of consumers as well as doctors.

It is understood that MOH&FW did consider the matter of setting up of NDA and its funding by levying a cess as proposed. The department of Legal Affairs, however, advised that the taxation measures be separated from the other issues and that there should be separate bill for cess. There were also a number of other issues, where there was a lack of clarity. These included the structure of proposed NDA, its role, its source of funding, etc.

In 1999, the Ministry appointed a consultant to examine the existing legal and operational framework of drug control system in India, and suggest available options for the organizational structure of the proposed NDA. Earlier, the Ministry had also prepared a draft NDA Bill and had it examined by a legal consultant. A lot of work has been done to take this concept forward but no real progress seems to have been made for several reasons.

1. “The present infrastructure in CDSCO is grossly inadequate to meet the actual requirements. With substantial increase in the scope of work of CDSCO, following its reconstitution as NDA, the technical manpower will need to be augmented suitably. Additional posts of JDCs, DDCs, ADCs and DIs etc. will be needed both for the headquarters and the field offices. Some structural changes by way of re-organization of the present set up may also be necessary for functions such as inter-state commerce, regulatory affairs and surveillance and monitoring etc.”
   
2. ”In order to have a policy of uniform implementation of various drug laws in all the States and Union Territories, the question of withdrawing State Governments powers in these areas and vesting the same in NDA, needs to be given a serious consideration”.

In the Drug Policy document of 2002, the Government indicated its preference in the following terms-

“set up a world class Central Drug Standard Control Organisation (CDSCO) by modernizing, restructuring and reforming the existing system and establish an effective net work of drugs standards enforcements administrations in the States with the CDSCO as a nodal center, to ensure high standards of quality, safety and efficacy of drugs and pharmaceuticals”

Thus, the Drug Policy 2002 opted for a world class CDSCO, rather than NDA.

• The Drug Control Organization functions directly under the Ministry of Health
• The registration of products and licensing of drug manufacturing units is done by a single authority at the central level
• The Drug Policy emerging from the Health Policy is issued by the Ministry of Health
• In some countries especially the developed ones, the licensing and control of retail pharmacies is done by professional bodies and not by FDAs

A questionnaire was sent to all the State Drug Controllers in order to get all relevant information about their set up, the inspectorate staff and testing facilities etc. (Annexure 7) Information has been received from most of the States (Annexure 8A). A comparative picture of the number of sale licenses, manufacture licenses and Drug Inspectors in 2003 as compared to 1975 (Ref. Hathi Committee Report) is available (Annexure 8B, to, 8E).

One of the questions asked was as to whether NDA should be created and if so, whether it should perform the statutory licensing functions. Also if the CDSCO (CDA) was to be strengthened, then would there be still a need for NDA. 15 out of 26 States stated (Annexure 8A) that there is a definite need to strengthen the central administration and if CDSCO (CDA) can perform the statutory functions efficiently, there is certainly no need of NDA.

• Post marketing surveillance
• Control on medical devices
• Control on diagnostics
• Control on neutraceuticals, feed supplements and herbal products
• Guidelines for promotional literature
• Promotion of rational use of drugs
• Guidelines for self medication
• Monitoring of clinical trials and bio equivalence studies
• Monitoring of ADRs
• Interaction with consumers and handling of complaints
• Central nodal intelligence cum legal cell to coordinate the inter-state activities
• Training of regulatory and laboratory personnel

The Committee concluded that there were several complex operational, legal, constitutional and political issues that are involved in setting up NDA. The question as to whether NDA should be an autonomous body or a wing of the Ministry, whether it should take over all the statutory functions of DCGI and state authorities, whether it should be on the lines of US FDA (which is Food and Drug Administration) or an Authority etc. need a careful consideration. One of the sensitive questions to be considered is whether the existing power of the licensing of manufacturing units by the State Governments ought to be taken over by the central authority.

• inadequate or weak drug control infrastructure at the State and Central level
• inadequate testing facilities,
• shortage of drug inspectors,
• non-uniformity of enforcement,
• lack of specially trained cadres for specific regulatory areas,
• non existence of data bank and
• non- availability of accurate information

The Committee concluded that the existing infrastructure at the Center and States was not probably adequate to perform the assigned functions efficiently and speedily. The Committee felt that creating another authority will not solve the problem at hand. It was essential to strengthen the existing organisations to enable them to undertake all the functions envisaged for NDA. A strong well equipped and professionally managed CDSO, which could be given the status of Central Drug Administration (CDA) was the most appropriate solution.

The Committee concluded that strengthening of CDSO, in the manner described in 3.4.2 was absolutely essential. For this, it was particularly important that the structure described in 3.4.3 (Annexure 5) needed to be established urgently.

The definition of spurious drug was included in the Drugs and Cosmetics Act by the Amendment Act of 1982. Section 17-B defines that a drug shall be deemed to be spurious:

• if it is manufactured under a name which belongs to another drug; or
• if it is an imitation of, or is a substitute for, another drug or resembles another drug in a manner likely to deceive, or bears upon it or upon its label or container the name of another drug, unless it is plainly and conspicuously marked so as to reveal its true character and its lack of identity with such other drug; or
• if the label or container bears the name of an individual or company purporting to be the manufacture of the drug, which individual or company is fictitious or does not exist; or
• if it has been substituted wholly or in part by another drug or substance; or
• if it purports to be the product of a manufacturer of whom it is not truly a product.

The Food and Drug Administration, USA defines counterfeit drug as-

“A drug which, or the container of which, or labeling of which, without authorization, bears the trademark, trade name, other identifying mark, imprint or device or any likeness there of a drug manufacturer, processor, packer, or distributor other than the person, or persons who in fact manufactured, processed, packed, or distributed such drug and which thereby falsely purports or is represented to be the product of, or to have been packed or distributed by such other drug manufacturer, processor, packer, or distributor.”

According to WHO, a counterfeit medicine is one which is deliberately and fraudulently mislabeled with respect to identity and/or source. Counterfeiting can apply to both branded and generic products and counterfeit products may include products with the correct ingredients or with the wrong ingredients, without active ingredients, with insufficient active ingredient or with fake packaging.

The term, ‘counterfeit’ that is commonly used worldwide for spurious drug does not appear in Drugs and Cosmetic Act but the above definition of spurious drug comprehensively covers counterfeit drug also.

The Drugs and Cosmetics Act also defines “Misbranded Drug”, under Section 17 and “Adulterated Drug”, under Section 17A.

A drug is considered “Not of standard Quality” or substandard if it fails to comply with any of the parameters of the overall standards laid down for it either in a recognized Pharmacopoeia or otherwise pre declared by the manufacturer.

Spurious/Counterfeit drugs harm the consumers, because they could cause serious injury or fatal consequences, if they do not contain active ingredients or contain harmful substances. Treatment with ineffective counterfeit drugs such as antibiotics or other life saving drugs may have deleterious effect. In most cases, such products are manufactured in the absence of quality control and assurance systems, which are subjected to normal regulatory control.

Furthermore, the government revenue suffers, since the makers of spurious drugs do not pay any duties or taxes. These products would also have a negative impact on the growth of industry. There is a discernible trend of organized crime taking over manufacture and sale of spurious/counterfeit medicines.

The figures quoted in the media and by different sources about the extent of spurious drugs in the country have varied anywhere from 0.5% to 35 %.

Based on the samples tested by the state authorities, data were analysed for the period 1995-2003. These data are given in (Annexure 9). According to these data, the extent of sub-standard drugs varied from 8.19 to 10.64% and of spurious drugs varied between 0.24 % to 0.47%.

There were presentations made to the Committee on 17th July 2003 by CII representatives. Their conclusions were as follows:-

a) Revenue loss of over Rs. 4000 Crores to industry
b) 2001 production of total drugs : 22,887 crores. 18% spurious =>4112 crores
c) Govt. supplies-majority fail quality test
d) WHO statistics on spurious drugs – India leads with 35% of world production.
e) USA keeps India under watch list special 301

The Committee had requested CII to present whatever evidence it had to the Committee. It was agreed that it will be presented to the Committee in due course. The evidence is still awaited. On its receipt, this evidence will also be presented in the Final Report of the Committee.

“India Today”, in an article in September 2, 2002 issue stated, “The India Pharma Alliance (IPA) claims an annual damage of Rs. 4, 000 core to the pharmaceutical industry due to spurious drugs”.

A meeting of the sub-committee (Group I) mandated specifically to look into the issue of spurious drugs was held on 29th April 2003. In this Committee, the IPA representative clarified that the figures extrapolated by them are a matter of general perception and may not be accurate. He also said that it is difficult to estimate the real extent of spurious drugs since it is an under cover activity.

WHO had been quoted to have given a figure of 35% of fake drugs produced in the world coming from India. (Reference Patralekha Chatterjee in Lancet 2001, 357 No. 9270; 1776, 2nd June and The Week May 18, 2003). For example, “The Week” published a detailed article titled “Flood of Fake Medicines”. It quoted various sources and gave quantitative figures. For example it reported, “According to the WHO, 35% of fake drugs produced in the world come from India, which has a Rs. 4,000 Crore spurious drug market. About 20% of medicines in the country are fake or substandard. Of these, 60 % do not contain any active ingredient, 19% contain wrong ingredients and 16 % have harmful and inappropriate ingredients”.

Enquiries were made by the office of DCGI with WHO. WHO’s response is reproduced in (Annexure-10) WHO stated that “There is no actual study by WHO, which concludes that 35% of world’s spurious drugs are produced in India.” I have investigated this matter with our regional office, and they believe that the source is a commentary from 2001 by an Indian journalist in the Lancet. I will also try to seek the issuance of a clarification from our side, but this may take some time. It went on to add that ‘The Indian pharmaceutical market, with annual sales ranging between US $ 7-8 billion, ranks third in the world, and the majority of the Indian pharmaceuticals are produced by large manufactures according to WHO Good Manufacturing Practices (GMP)!

In any event, the figures floating in the media, claimed as being WHO figures, remain unsubstantiated toady.

A need for systematic investigation of the extent of spurious/counterfeit drugs in the country

The issue of spurious drugs justifiably gets debated with a lot of emotive content due to the understandable concern among the public at large. However, a systematic and thorough evaluation of the extent (in terms of number of units/brands/amount) and the nature (content is lower than claimed or is missing or content okay but misusing some other fast selling brand) of counterfeiting is called for.

In other words, any scientific exploration to comprehend and subsequently deal with the situation will call for a systematic collation of information, a logical model to analyze the collated data and then to extrapolate the conclusion to get a clearer understanding of the extent of the problem across the country.

Delhi Pharmaceutical Trust made a presentation to the Committee members and suggested a scheme to carry out a statistically validated and scientific study so that its final ‘evidence based analysis’ will stand the test of scrutiny. An exact time and cost estimate can be worked out on the basis of a detailed protocol and a statistical model.

The proposal aims to identify a list of most commonly reported spurious/counterfeit drugs, to prepare a list of companies known to have faced counterfeit problems and to select certain areas in the country where these drugs are reported to be prevalent. Trained designated buyers will purchase 2 units of each of the identified drugs from each identified territory and sub territory. Similarly samples will be taken from dispensing doctors and various dispensaries/government institutions. The 2 units of drug will be segregated and one set forwarded to a designated laboratory, which, at the first instance will look for physical signs of counterfeiting. The laboratory will analyze 100% of suspected samples, 50% of probable suspects and 25% of not suspected samples. The detailed scheme is shown at (Annexure 11). The complete project is likely to cost about Rs. 15 to 20 Lacs. It will take about 3 to 4 months to complete.

• Licensing of drug manufacturing establishments and sales premises
• Carrying out inspections of licensed premises for ensuring compliance to conditions of licenses
• Drawing samples for test and monitoring the quality of drugs and cosmetics moving in the State
• Taking appropriate action like suspension/cancellation of licenses and
• Instituting legal action wherever needed as provided under the Act and Rules

The Drugs and Cosmetics Act has been in force for the past 56 years but the enforcement in many States has not yet reached the desired level. As early as 1975, Hathi Committee had also given a comprehensive report and recommended measures for strengthening and streamlining the Central and State Drug Control organisations.

The main functions of central government are:

The detailed guidelines on strategies to be adopted by State Authorities to fight the menace of spurious drugs has been provided to all concerned.

In July 2001, a committee was constituted by the Union Ministry of Health & Family Welfare, Government of India under the chairmanship of Dr. S. P. Aggarwal, Director General of Health Services (DGHS), to suggest remedial measures to combat menace of manufacture and sale of spurious drugs/fake medicines. The Committee was set up in view of serious concern expressed, in print as well as in electronic media, and in the Parliament about the availability of spurious drugs in various parts of the country.

The Committee examined in–depth, various issues concerning the manufacture and sale of spurious drugs and suggested certain remedial measures which needed to be taken to combat the menace of spurious drugs. The Committee felt that as the prime responsibility of providing quality drugs to the public is that of the Government, the State Drug Control authorities, which are empowered to regulate manufacture and sale of drugs and to monitor their quality, are required to gear up for making effective and continuous efforts in tracking down the persons indulging in clandestine manufacture and sale of spurious drugs. As the drugs manufactured in one State are sold in other States, the coordination among the States is of paramount importance in tracking down such clandestine and criminal activities. The Drugs Controller General (India) had circulated the recommendations of DGHS Committee to all State/UT Drugs Controllers in September 2002 for adoption and implementation.

The Union Minister for Health & Family Welfare convened a meeting of State Health Ministers in November 2002 to discuss measures to check manufacture and sale of spurious/fake medicines. In his address, the Minister stated,

“that surveillance and management of spurious/counterfeit drugs is a social responsibility. The regulatory agencies must initiate focused strategy for its stoppage by monitoring such criminal and illegal activities. There are reported to be more than 3.5 lakh sales outlets in the country and about 800-900 drugs inspectors for about 600 districts in the country. Only 17 States have drug testing facilities of which only 6 laboratories have facilities for complete testing of all categories of drugs. In such a scenario, the problem cannot be effectively tackled in a routine manner by quality monitoring or licensing activities”.
He further stated that

‘For any civilized society it is an evil, which needed to be tackled with top most priority by involving all stakeholders and utilizing all possible resources’

Health Ministers/Secretaries/Drug Controllers of States gave their views and highlighted the problems faced by them at the State level. Most of them stated that lack of funds was a major constraint for not being able to strengthen their regulatory infrastructures that they requested for a central support for this purpose.

It was reiterated that all India Organisation of Chemists and Druggists should play an active role to educate their members and to cooperate with the regulatory authorities to eliminate sale of spurious and substandard drugs by their members. Any case of procurement by dealers from unauthorized sources should be dealt with severely.

• Effective interaction between the stakeholders i.e. industry and regulators, industry and consumers, trade and regulators and medical professional and regulators.
• Creation of intelligence cum legal cells in State and Central offices.
• Discouraging proliferation of drug distribution outlets.
• Changes in law to provide enhanced penalties, making the offences cognizable and non-bailable in the light of similar provisions in Narcotic Drugs and Psychotropic Substances Act.
• Designation of special courts to try the cases of spurious drugs.
• Preparation of dossiers of suspected dealers and manufactures.
• Provision of secret funds and incentives to informers.
• Effective networking system between States
• Check on drug supplies to practitioners who buy and supply drugs to their patients.
• Industry to have its counterfeit drug strategies, better surveillance and efficient complaint handling system.
• Trade associations to have better surveillance on defaulting members and to take strict action against them.
• Creation of better awareness amongst consumers.

The Committee also felt that there should be some restriction for issuing retail and wholesale licenses, since agglomeration of chemist shops results in cutthroat competition and indulgence in possible purchase of drugs from unauthorized sources for economic reasons. The feasibility of this suggestion needs to be examined.

If a spurious drug is detected in one State, the source of its origin is usually from another State. By the time the concerned State drug authorities are contacted, the evidence normally is destroyed at the source. The real offender escapes detection and may keep on indulging in this trade. The actual supply of spurious drug remains untraceable and recoveries are not affected. It is, therefore, necessary that there should be a speedy information exchange mechanism. This will enable a functional coordination with all States in the country.

By amendment of The Drugs and Cosmetics Act in 1982, the punishments for various offences were rationalized and life imprisonment was included as penalty for sale and manufacture of a spurious drug that causes grievous hurt or death. It was, however, noted that so far not a single prosecution has resulted in life imprisonment. While some members of the Committee suggested that for real fear among the possible offenders the penalty should now be enhanced from life imprisonment to death, some others were of the view that legal proceeding in cases involving death penalty may result in very complicated and lengthy trials. It was also agreed that even in cases of spurious drugs that are not likely to cause grievous hurt or death, the penalty should be enhanced with increased fine. The Committee recommends that the existing provisions under Section 27 of Drugs & Cosmetics Act need to be amended.

The Committee also examined the provisions of Narcotic Drugs and Psychotropic Substances Act where the offences are non-bailable and provide for detention of the accused. It was felt that similar provision should be included in the Drugs and Cosmetics Act so that the courts may consider applications for bail only after a period of 3 months.

The Committee noted the functions of the officers of regulatory system are mostly of technical nature, whereas manufacture and sale of spurious drugs is a criminal activity that requires specialized training and skills as well as help of police. The Committee observed that under the present provisions of Drugs and Cosmetics Act, only Drugs Inspector is authorized to file prosecutions. It was felt that whenever a spurious drug case is detected and investigated by police, they should also have the power to prosecute independently. The Drugs and Cosmetics Act therefore needs to be amended to authorize the police also to file prosecutions.

8.

The Committee noted that majority of the States are not either adequately staffed or technically equipped to monitor the quality of drugs manufactured and sold in their State. There is a strong need to strengthen the organizations with competent and trained manpower and with adequate budgets. This will enable them to detect, investigate and take quick action in spurious/counterfeit drug cases.

The officers needed to be specially trained for the purpose. The Committee recommends that :

a. The drug control organizations in States should be adequately strengthened. Additional manpower, infrastructure, technical capabilities and financial resources should be made available to the organization. They should have continuous vigilance facilities and strategies to implement an effective system to monitor and control the manufacture and distribution of spurious drugs.

b. States should set up Intelligence cum legal cells under the supervision of trained senior officer. State Governments should put in place efficient mechanism for timely police help to these officers.

c. State should establish a proper surveillance system for keeping a watch over suspected individuals. Watchers should be employed to purchase samples from suspected persons without disclosing their identity. Secret funds should be made available for intelligence activities.

d. States, which have a large number of drug distribution outlets should set-up a well-equipped testing laboratory to enable them to test all categories of drugs in shortest possible time. All States should plan to take more samples to check the quality of drugs manufactured and sold in the market. Those States, where it was not technically and economically viable to support their own drug testing facilities, needed to make use of facilities of other States and central laboratories or even the private approved laboratories for testing of suspected samples.

e. States should set up an efficient communication network system between the Center and other States in order to facilitate exchange of information and rapid investigation in cases involving inter-state movement.

f. States should also monitor the source of purchase and quality of drugs stocked by dispensing registered medical practitioners through their drugs inspectors.

The Committee noted that the Central Government has already initiated steps for upgrading of testing facilities and country wide computer networking under a capacity building project through World Bank assistance. It is hoped that these projects, when completed, will be of great assistance to the States in arresting the menace of spurious drugs.

The Committee felt that there was an absence of a scientifically and statistically designed investigation, which could give a realistic estimate of the menace of spurious drugs. The model for such an evaluation presented by the Delhi Pharmaceutical Trust appears to be one, which had a rational approach to achieve this objective.

The Committee noted that the specific penalties in Drugs and Cosmetic Act were provided in 1982 for offences concerning manufacture and sale of spurious drugs. However, the penal provisions have not acted as adequate deterrents and have not instilled the desired extent of fear among the offenders. It was therefore, felt that the penalties for all offences related to spurious/counterfeit drugs should be further enhanced.

The Committee, more specifically, recommends that:

a. The penalty for sale and manufacture of spurious drug that causes grievous hurt or death should be enhanced from life imprisonment to death. Even the penalty for manufacture and sales of spurious drugs that do not cause grievous hurt or death should also be made more severe (Annexure 13, 27a and 27aa).

b. The offences related to spurious drugs should be made cognizable and non-bailable. The bail, if considered by the court should be granted only after a period of three months (Annexure 13, 32b).

c. The penalty for not disclosing the source of purchase of drugs by a dealer should be made stringent (Annexure 13, 28a).

d. A provision should be included in the Drugs and Cosmetics Act to enable the Central and State Governments to designate special courts for speedy trial of spurious drugs cases (Annexure 13,32(2))

e. A provision for compounding of offences should be included in the Drugs and Cosmetics Act (Annexure 13, 32(c)).

f. Under Drugs and Cosmetics Act, besides the Drug Inspectors, Police should also be authorized to file prosecution for offences related to spurious drugs (Annexure 13, 32(1(a))

The Committee noted that industry has a well developed marketing and distribution network. The industry can streamline their supply chain and make use of their manpower to detect the movement of spurious drugs.

The Committee recommends that:

a. The industry should establish a close interaction with the regulatory authorities and extend its full corporation to eliminate the menace of spurious drugs.

b. The industry should formulate its own spurious/counterfeit drugs policy and a surveillance strategy to tackle the problem of spurious drugs.

c. The Associations of Pharmaceutical Industry should prepare a checklist for the guidance of manufactures, wholesales and retailers to identify and distinguish between the spurious and genuine products.

The Committee recommends that:

a. All India Organisations of Chemists and Druggists should play a pro active role to educate their members and make all out efforts to ensure that their members adhere to good professional standards and to keep the interest of consumers as upper most in their dealings.

b. The Association should develop a mechanism to identify dealers, who are directly or indirectly involved in abetting the distribution of spurious, counterfeit and questionable quality drugs.

c. Sub Rule 3 of Rule 65 (4) of Drugs & Cosmetics Rules requires that the supply by retail of any drug shall be made against a cash/credit memo. This condition of license should be strictly adhered to by all retail licensees.

d. The Association should prepare a checklist for the guidance of members, which should be widely publicized for information.