A new legislation that mirrors the old

A medical shop in Khammam.

A medical shop in Khammam. | Photo Credit: G.N. Rao

The Union Health Ministry recently published a new draft Bill to replace the antiquated Drugs and Cosmetics Act, 1940. While we salute the Ministry for recognising the need for a new legislation, there is much to disagree with the new Bill. To begin with, although the Ministry has described it as being consistent with the government’s move to review obsolete pre-Independence legislation, most of it is a copy of the old law. There is nothing new in this Bill regarding drug regulation. And the Bill does nothing to address burning issues thrown up over the last decade since the Ranbaxy scandal.

Regulatory theory

The original Act was enacted when the Indian pharmaceutical industry was in its infancy. At the time, the guiding theory of this law was based on testing manufactured drugs purchased by drug inspectors from the open market. If a drug failed quality testing, the manufacturer could be jailed. This was not the most efficient system of regulation because it depended entirely on luck or fate – only if a drug inspector picked a certain drug on a certain day and it failed testing would the manufacturer face legal action. Much of the world has shifted to a more rigorous system of regulation centered around the compliance of manufacturing units with good manufacturing practices (GMPs). In theory, a drug manufactured in compliance with GMPs is subject to so many checks that it is unlikely that it would fail quality tests once shipped to the market.

In 1988, India incorporated a system of GMPs via rules framed by the government rather than Parliament. But even then, the government did not make GMPs the centrepiece of its regulatory strategy. In the U.S., the regulator’s focus is in ensuring that manufacturing units comply with GMPs. American law presumes that any drug that is manufactured in a facility that fails to comply with GMPs is ‘adulterated’. Given this focus on GMP compliance, U.S. law mandates the publication of reports of inspections conducted by its drug inspectors. Indian law, on the other hand, contains no such criminal penalties for pharmaceutical companies failing to comply with GMPs. At the most, licences may be cancelled, but since inspection reports are never published, citizens have no idea if drug inspectors are conducting GMP compliance-related inspections. There is ample evidence to suggest that such inspections are not carried out. The Bill does nothing to change this system. In fact, it does not mention the phrase GMP even once.

The federalism question

The one issue that has come up in every review of the drug regulatory system since 1947 has been the uneven enforcement of the Drugs and Cosmetics Act across India. This is because, unlike the U.S. which has a single federal agency tasked with enforcing drug regulation across the country, India has 37 agencies for the same job: one in each State and Union Territory along with the Central Drugs Standard Control Organisation (CDSCO), which is under the control of the Union Health Ministry. State drug controllers are expected to license drug manufacturing and also conduct enforcement actions such as sampling, testing and prosecution for substandard drugs. The CDSCO’s role is limited to regulating imports and to deciding whether new drugs have adequate clinical evidence before they can be sold. Over the years, even the CDSCO has started drawing samples for testing and prosecuting erring manufacturers. In addition, the Health Ministry is in charge of laying down rules and regulations and banning drugs which do not have supporting clinical evidence.

A problem with this setup is that States such as Himachal Pradesh, which account for a bulk of pharmaceutical manufacturing on account of a tax holiday, do a poor job in enforcing the Drugs and Cosmetics Act. This is not just because of poor state capacity; the fear of scaring away investments by the pharmaceutical industry likely plays a key role in the State’s decision to not enforce the law. Since India is a single market, drugs manufactured in Himachal Pradesh are sold across the country and even States with relatively more competent drug regulators, such as Tamil Nadu, Karnataka and Gujarat, can do little to stop the flood of these substandard drugs. It is only the drug controller in Himachal Pradesh who can cancel manufacturing licences of facilities located in that State. This is the reason that the Mashelkar Committee in 2003 had recommended centralising drug licensing with the central regulator. The present Bill is silent on the issue. And since the Ministry never released a white paper explaining its position, we don’t why this issue was never tackled.

Democratise regulation

Drug regulation by its very nature vests vast discretionary powers in unelected bureaucrats to take decisions such as approving a new drug or a new manufacturing facility, both of which can have huge implications for public health and profits of the pharmaceutical industry. These decisions are often based on scientific data, inspections, reports, etc. In such circumstances, the only safeguard to ensure bureaucratic accountability is transparency. As citizens, we should not be required to run after the regulator begging for information under the Right to Information Act, 2005. Rather, the law should be written in a way to guarantee proactive disclosure of all crucial documentation related to regulatory decisions. If a new drug is being approved, the regulator should be required to disclose all the data, including clinical trial data. Every time a drug is tested in a government laboratory, the test report should be published on a publicly accessible database. Each inspection for GMP compliance should conclude with an inspection report accessible to the general public. This is the only way to ensure accountability and build public confidence in the regulator. The new law is silent on this critical issue of transparency because it is structured largely on the basis of the original colonial-era legislation. The government must consider rewriting this law in a way that guarantees transparency by design.

Modern regulation delegates an incredible amount of power to unelected bureaucrats and technocrats. From a perspective of efficiency, such delegation is required, but from the perspective of accountability, it leads to a democratic deficit. This is why a modern regulatory system should be designed in a manner that guarantees citizens a right to participate in decision making. Making information available to citizens is only the first step in this process. The next step is to create legal pathways, such as public hearings or citizen’s petitions which will enable citizens to participate in the regulatory process and register their objections. For example, every drug approval process should be accompanied by a public hearing to allow doctors and ordinary citizens to question regulators and explain their rationale for approving the new drug. The proposed legislation does not make accommodation for public participation.

Since the present reform process is still in the early days, nobody will fault the Health Minister for junking this draft Bill and appointing a new committee of external experts to draft a Bill reflecting the democratic character of an India celebrating its 75th year of independence.

Dinesh Thakur was the whistleblower in the Ranbaxy case; Prashant Reddy T. is a lawyer

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Printable version | Sep 8, 2022 8:11:01 am |