Central Drugs Standard Control Organization Guidelines

The Central Drugs Standard Control Organisation (CDSCO) has released guidelines and standard operating procedures (SOPs) related to the compounding of offences under the Drugs and Cosmetics (Compounding of Offences) Rules, 2025. 

• These guidelines aim to simplify the regulatory framework for pharmaceutical companies, especially concerning minor violations under the Drugs and Cosmetics Act, 1940.

Background

• Until recently, minor violations of the Drugs and Cosmetics Act often led to criminal prosecution. Jan Vishwas Amendment Act (2023): The Jan Vishwas Act aims to decriminalise minor offences to improve ease of living and doing business, expanding the scope of Section 32B of the 1940 Act to include more offences for compounding, such as production and sale violations, and issues related to record keeping.

Key Provisions of the Compounding of Offences Rules, 2025

• Introduction of Compounding of Offences:

• The new rules allow stakeholders to settle minor drug-related offences without appearing in court.
  • Exemption from Court Appearance: This change aims to ease the burden on both the judicial system and pharmaceutical firms, promoting compliance while reducing litigation.
  • Scope of Eligible Violations: The guidelines cover offences related to breach of record-keeping and disclosure under the 1940 Act, aimed at preventing unnecessary criminalisation for minor infractions.
  • Conditions for Compounding: Pharma firms can pay a monetary penalty for minor contraventions, but must also undertake self-corrective actions to ensure compliance.
• Eligibility for Compounding:
  • The rules apply to minor contraventions of the Drugs and Cosmetics Act, 1940.
  • Application Process: Stakeholders can apply for compounding by submitting the prescribed application form physically and through email to the Compounding Authority.
  • Monetary Penalties: The rules do not specify the amount of the fine or the types of offences that qualify for compounding.
• Link to the Jan Vishwas Act:
  • Ease of Doing Business: These changes align with the Jan Vishwas Act, which focuses on decriminalising minor offences to reduce the burden on the judicial system and enhance business operations.
  • Promoting Business Compliance: By enabling quicker resolution of minor issues, the new rules contribute to making regulatory processes more business-friendly.
• Conditions for Immunity and Enforcement
  • Immunity Withdrawal: Immunity from prosecution can be revoked if a company fails to comply with the penalties or if false evidence or concealment of facts is discovered during the compounding process.
  • Potential for Prosecution: If the compounding authority finds any concealment or falsehood, the company may face prosecution, negating the benefits of compounding.

Concerns

• Risk of ‘Pay and Pass’ Scheme: Critics argue that if the fines are too low or inconsistently applied, the system could become a ‘pay and pass’ mechanism, reducing the deterrence effect for violations.
• Lack of Transparency: There is concern that the CDSCO’s lack of transparency in publishing compounding decisions and case details could lead to public distrust. 
  • The system lacks an auditable trail of actions, which might affect accountability.
• No Opportunity for Public Input: The process does not allow consumer groups or whistleblowers to make representations before immunity is granted, further reducing transparency.
• Broad Definitions of Offences: The guidelines allow for a wide range of offences, from paperwork lapses to more substantive compliance failures, potentially expanding the scope for compounding to cover serious issues that require stronger penalties.

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Central Drugs Standard Control Organisation (CDSCO)

• Function: CDSCO is India’s national regulatory body responsible for overseeing the regulation of cosmetics, pharmaceuticals, and medical devices.
• Establishment: Functions under the Directorate General of Health Services, Ministry of Health & Family Welfare.
• Regulatory Framework: CDSCO operates under the Drugs and Cosmetics Act, 1940.
• Headquarters: Located in New Delhi, with zonal and sub-zonal offices across India.
• Purpose: CDSCO ensures the safety, efficacy, and quality of medicines and medical devices in India, contributing to public health protection.
• Key Responsibilities
• • Drug Safety: Ensures safety, quality, and efficacy of drugs and medical products with transparency and accountability.
  • Drug Approvals: Approves new drugs and regulates clinical trials conducted in India.
  • Imported Drugs: Sets standards for drugs and monitors the quality of imported medicines.
  • Expert Guidance: Provides expert guidance to ensure uniform enforcement of the Drugs and Cosmetics Act nationwide.
  • Collaborates with State Drug Regulators to grant licences for critical products such as vaccines, blood products, IV fluids, and sera.