On the Central Drugs Standard Control Organisation Guidelines (CDSCO)

The Central Drugs Standard Control Organisation has issued new guidelines to operationalise the Jan Vishwas (Amendment of Provisions) Act, which seeks to decriminalise minor offences under the Drugs and Cosmetics Act, 1940, by allowing compounding instead of criminal prosecution.

About Compounding Under The New Guidelines

• Shift from Litigation to Monetary Settlement: Firms can report certain violations and apply to pay a fine instead of facing criminal prosecution, subject to the regulator’s discretion.
• Immunity from Prosecution: Once compounding is granted and the fine is paid, the firm receives immunity from prosecution for that specific offence, subject to conditions.
• Timing of Compounding Applications: Firms may apply for compounding either before or after prosecution has begun.

Expanded Scope of Compoundable Offences

• Broader Coverage under Section 32B: The Jan Vishwas Act expanded Section 32B to include additional offences that can be compounded.
• Types of Offences Now Covered: Manufacturing drugs in breach of the Act but not covered under serious offence categories.
  • Stocking or exhibiting non-spurious and non-adulterated drugs that still violate provisions.

Expected Benefits of the New Framework

• Reduction in Needless Criminalisation: For offences related to record keeping and disclosures, compounding prevents unnecessary criminal prosecution.
• Better Use of Regulatory Resources:  Enforcement agencies can focus on serious violations that pose direct risks to public health.

Key Concerns in the CDSCO Compounding Framework

• Risk of a “Pay and Pass” Culture: If compounding becomes an easy, routine option, firms may treat fines as a cost of doing business, weakening deterrence and undermining regulatory discipline.
• Lack of Transparency in Regulatory Decisions: Non-disclosure of compounding orders and case details can erode public trust in both the regulator and the legal process.
• Absence of Public and Civil Society Oversight: The framework does not allow consumer groups or whistleblowers to provide input before immunity from prosecution is granted.
• Overly Broad Scope of Compoundable Offences: By clubbing minor documentation lapses with more substantive compliance failures, the guidelines risk diluting the seriousness of regulatory violations.
• Weak and Inconsistent Penalty Structure: If fines are set too low, applied unevenly, or routinely substituted for more serious measures, they may fail to create meaningful compliance incentives.

Way Forward

• Mandatory Corrective and Preventive Actions: Compounding should be linked to firms’ compulsory corrective and preventive measures to address the root causes of violations.
• Follow-up Inspections by Regulators: Post-compounding inspections should be conducted to ensure that compliance failures have been rectified.
• Public-Facing Safety Measures: Where public health is at risk, regulators should issue alerts and direct product recalls to protect consumers.

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Conclusion

The reform can improve regulatory efficiency if implemented in good faith, but without transparency, accountability, and follow-up action, it may fail to reduce long-term public health risks.

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