Drugs & Cosmetics Act 1940 – Import & Manufacture of Drugs
The Drugs and Cosmetics Act, 1940 (with Rules 1945) is the most important pharmaceutical legislation in India. This opening unit covers the Act’s objectives, key definitions (Drug, Cosmetic, Adulterated, Spurious, Misbranded drugs), the legal significance of various Schedules, the regulations governing Import of drugs (prohibited categories, import licenses), and the detailed provisions for Manufacture of drugs (licensing conditions, new drug manufacture, loan license, and repacking license).
Syllabus & Topics
- 1D&C Act 1940 – Historical Background: Pre-independence, India had no drug regulation → rampant adulteration and substandard drugs. Chopra Committee (1930) recommended drug legislation. Result: Drugs and Cosmetics Act enacted in 1940 (originally Drugs Act → Cosmetics added in 1964). Rules framed in 1945. Amended multiple times (major: 1964, 1982, 1995, 2008).
- 2Objectives of the Act: (1) Regulate import, manufacture, distribution, and sale of drugs and cosmetics. (2) Ensure drugs meet prescribed standards of quality, safety, and efficacy. (3) Prevent manufacture and sale of adulterated, spurious, and misbranded drugs. (4) Regulate clinical trials and new drug approvals. (5) Define various schedules for classification and regulation.
- 3Key Definitions – Drug (Section 3b): (i) Articles intended for diagnosis, cure, mitigation, treatment, or prevention of disease in humans/animals. (ii) Articles intended to affect structure or function of the body. (iii) Articles used as components of drugs. (iv) Devices for internal/external use. Importantly: Ayurvedic, Siddha, Unani medicines are also ‘drugs’ under this Act.
- 4Key Definitions – Others: Cosmetic (Section 3aaa): Articles for cleansing, beautifying, promoting attractiveness, or altering appearance without affecting body structure/function. Adulterated Drug (Section 9A): Differs in composition, contains unauthorized coloring/coating, mixed with other substance. Misbranded Drug (Section 17): False/misleading label, not labeled as per rules. Spurious Drug (Section 17B): Imitation, bears another’s name, substitute represented as genuine.
- 5Schedules to the Act: Schedule C & C1: Biological and special products (sera, vaccines, r-DNA products requiring special storage). Schedule D: List of diseases for which no drug advertisements allowed. Schedule E: Poisons list – E(1) list of poisonous substances, rules for storage and sale. Schedule FF: Standards for ophthalmic preparations. Schedule M: Good Manufacturing Practices (GMP) and requirements for factory premises.
- 6Schedules to the Rules (Important): Schedule G: Drugs to be labeled with warning ‘Caution: It is dangerous to take this preparation except under medical supervision’ (e.g., Anthelmintics, Oral contraceptives). Schedule H: Prescription drugs – must be sold only on prescription (most antibiotics, hormones, cardiac drugs). Schedule X: Drugs with stringent regulations – prescription must be retained for 2 years (Diazepam, Amphetamines, Barbiturates).
- 7Import of Drugs – Chapter III: Section 10: Drugs Technical Advisory Board (DTAB) advises Central Government on technical matters. Section 10A: Central Drugs Laboratory (CDL, Kolkata) for testing imported drugs. Section 12: Government Analyst examines samples. Import regulated by CDSCO (Central Drugs Standard Control Organization) headed by DCGI.
- 8Import – Prohibited Classes (Section 10): (1) Drugs not meeting IP/BP/USP standards. (2) Adulterated drugs. (3) Misbranded drugs. (4) Spurious drugs. (5) Drugs banned in the country of origin. (6) Drugs imported without valid import license. Only licensed importers can import drugs – Import license issued by DCGI or authorized officers.
- 9Import License & Permit: Import license (Form 10) issued for specific drugs. Requires: application to Licensing Authority, drug must meet pharmacopoeial standards, manufacturing facility abroad must be WHO-GMP approved. Registration certificate required for new/proprietary drugs. Personal import of small quantities for personal use – permit from Drug Controller.
- 10Manufacture of Drugs – Chapter IV: No person shall manufacture any drug except under, and in accordance with, the conditions of a license (Section 18). Manufacturing license issued by State Licensing Authority (for most drugs) or Central Licensing Authority/DCGI (for blood products, vaccines, r-DNA products, new drugs).
- 11Conditions for Grant of License (Rule 71-76): (1) Adequate factory premises complying with Schedule M (GMP). (2) Competent technical staff – at least one approved pharmacist/qualified person in charge. (3) Adequate testing facilities (QC lab). (4) Compliance with Schedule M-II (GMP for ASU drugs) if applicable. (5) Payment of prescribed fees. License is valid for 5 years and renewable.
- 12Types of Manufacturing Licenses: Regular Manufacturing License (Form 25/28): Full manufacturing. Loan License (Form 28-D): Licensee does not own the manufacturing facility – borrows another licensed manufacturer’s plant (must have a separate agreement, QC testing done by loan licensee). Repacking License (Form 25F): For repacking drugs from bulk to retail packs.
- 13Manufacture of New Drug (Schedule Y): New drug = drug not previously approved in India OR approved drug for new indication/dosage/route. Requires: preclinical data (animal toxicology), Phase I-III clinical trial data, application to DCGI. Approval process: Permission from CDSCO after evaluation by Subject Expert Committee. New drug remains ‘new’ for 4 years after first approval.
- 14Offences and Penalties – Import/Manufacture: Import of adulterated/spurious drugs: imprisonment 3-5 years + fine ≥₹1 lakh (Section 13). Manufacture of adulterated drugs: imprisonment 1-3 years + fine ≥₹10,000 (Section 27). Manufacture of spurious drugs: imprisonment 3 years to life + fine ≥₹1 lakh to ₹10 lakh (Section 27A). Subsequent offence: enhanced penalties.
Learning Objectives
Exam Prep Questions
Q1. What Is the Difference Between Adulterated, Misbranded, and Spurious Drugs?
Under the Drugs and Cosmetics Act 1940, drugs are classified as adulterated, misbranded, or spurious depending on the nature of the violation. An adulterated drug (Section 9A) is one whose composition differs from official standards or contains harmful or unauthorized substances. A misbranded drug (Section 17) has false or misleading labeling information or fails to comply with labeling requirements such as batch number, manufacturing date, or expiry date. A spurious drug (Section 17B) is a counterfeit product that is sold under the name of another drug or falsely claims to be manufactured by a different company. Among these categories, spurious drugs carry the most severe legal penalties because they involve deliberate fraud and serious risk to public health.
Q2. What Is a Loan License?
A loan license is issued when a person who does not own manufacturing premises uses the facilities of another licensed manufacturer to produce drugs. In India, this license is granted under Form 28-D. The loan license holder supplies the raw materials, formulation details, and quality control specifications, while the manufacturing facility owner produces the product under the loan license holder’s brand name. Both parties must hold valid manufacturing licenses and have a formal agreement. This system enables small pharmaceutical companies to market products without establishing their own manufacturing plants.
Q3. What Is the Role of the DCGI?
Drugs Controller General of India is the head of the Central Drugs Standard Control Organization and serves as the primary national authority for drug regulation in India. The DCGI is responsible for approving new drugs and clinical trials, granting licenses for drug imports, regulating the quality of imported medicines, issuing approvals for blood banks, vaccines, and biotechnology products such as recombinant DNA drugs, and coordinating regulatory activities with State Drug Controllers. The office also ensures that India complies with international pharmaceutical regulatory standards.
Q4. What Makes a Drug “New” Under Schedule Y?
According to Schedule Y of the Drugs and Cosmetics Rules, a new drug is defined as a drug that has not previously been approved for use in India. It also includes already approved drugs that are proposed for new therapeutic indications, new dosage forms, new routes of administration, or new fixed-dose combinations. A drug retains its “new drug” status for four years from the date of its first approval in India. During this period, strict regulatory control applies, and other manufacturers must submit bioequivalence and safety data before obtaining approval.
Q5. What Is Schedule M?
Schedule M of the Drugs and Cosmetics Rules specifies the Good Manufacturing Practices (GMP) requirements for pharmaceutical manufacturing facilities. It includes standards for factory buildings, water systems, air handling units, equipment qualification, personnel hygiene, production area design, quality control laboratories, documentation systems, validation procedures, and complaint handling mechanisms. Compliance with Schedule M is mandatory for obtaining and maintaining a drug manufacturing license in India.