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TOP 5 HEALTH LAWS AND POLICY UPDATES

Dear Reader, we are happy to share the most interesting legal and policy updates concerning health industry that we read today. We hope you enjoy reading it.

Draft Guidance on Vaccine Approval and Quality Monitoring at port of Import published by Central Drug Regulator for Public Commect
The Central Government has recently published a draft of guidance on (1) regulatory framework for conducting vaccine related clinical trials, marketing approval, manufacture, import/ export and post marketing assessment and (2) Risk Based Approach for monitoring quality of imported drugs, medical devices and IVDs at customs ports. Public Comment is sought on these above Guidance Notes, within 30 days of publication i.e. by 10th May 2024.
Source: bit.ly/3xIoiIv
Source: bit.ly/4cVOpvL

Merchants Association Request Central Government Intervention to Stabilize trade of Medicines and Medical Devices with Africa
The Federation of Pharmaceutical and Allied Products Merchant Exporters, an industry association of small and medium sized importers and exporters, has advocated for fiscal and trade policy intervention including continued efforts to stabilize Rupee value, by the Government to stabilize the export of Medicine and Medical Products to Africa, which has seen a sharp decline due to rising shipping tariffs caused by ongoing geopolitical conflicts.
Source: bit.ly/3Q8qlvT

Threefold Increase in FDI in Healthcare and Medical Device Sector in India during latter half of FY 2023-2024
Foreign Direct Investment (FDI) into the Hospital and Diagnostic Sectors in the country has increased by about 90% in the last quarter of 2023-24, as compared to the same quarter the previous year. Moreover, the Medical and Surgical Implements Sector has also seen a nearly 1/3rd growth by proportion during the same time. The total FDI received in hospital and medical devices sector stood at USD 462 Million.
Source: bit.ly/3U6Km70

Modern medicine Doctor body Expresses Concerns regarding Introduction of Integraded School of Medicine as Treatment
The Indian Medical Association, a professional representative body of Doctors, has expressed its concerns regarding the proposal of the Central Government to institute Integrated Medicine, which would offer treatments which are a mix of allopathic, homeopathic and traditional medicine. The Council expressed concern that due to the vast gulf in the manner of training, specialization and expertise between the various schools of medicine means that integration and cross practice treatment may pose severe risk to patient.
Source: bit.ly/3U6yi5E

EU and Japan harmonize Pharmacopoeia for ease of doing Business and regulatory Burden
The European Directorate for the Quality of Medicine and Healthcare, and the Japanese Ministry of Health, Labour and Welfare have entered into a Memorandum of Cooperation and Confidentiality, to coordinate efforts to harmonize the European and Japanese Pharmacopoeia, a move that would reduce the regulatory burden on manufacturers operating in the twin jurisdictions, with respect to carrying out compendial tests and IP approval.
Source: bit.ly/3UmRBJo

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TOP 5 HEALTH LAWS AND POLICY UPDATES

Dear Reader, We are happy to share the most interesting legal and policy updates concerning health industry that we read today. We hope you enjoy reading it.

E-Commerce websites instructed to avoid marketing Milk/ cereal/ malt based drinks as “Energy Drinks”
India’s Food Standards Regulator (the Food Safety Standards Authority of India) has issued an advisory to e-commerce websites, requiring them to ensure that proprietary foods, i.e. foods that are not categorized under the Food Standards Regulations, specifically those currently registered as analogues to milk/ cereal/ malt based beverage, should not be advertised as “Health Drink”/ “Energy Drink”, as only carbonated/ non-carbonated water-based flavoured drinks are regulated as “Health Drink” and “Energy Drink”.
Source: bit.ly/3xlfzvD

Drug Price Regulator may examine prevalent drug substitution and discounting prices offered by major drug retail stores in India
The Indian Central Drugs Regulator (CDSCO) has reportedly requested the Central Drugs Price Regulatory Body (NPPA) to investigate drug substitution and discounting practices of a major pharmacy chain on the basis a complaint raised by State Chemists and Druggists’ Association of the State of Karnataka (KCDA). In its complaint, the KCDA has alleged that the major pharmacy chain has been deliberately undercutting prices, sustained by substitution of prescribed drugs with other cheaper but identical formulations and unreasonably increasing its profit margins, which is currently violative of regulations applicable to pharmacists, as well as pricing norms of drugs.
Source: bit.ly/4cJSJOg

Vaccine manufacturers may have to provide manufacturing and sales data to government soon
The advisory body to India’s Central Drugs Regulator, the Drugs Consultative Committee, has requested various State-level Drug Licensing Authorities to ensure submission of details of the manufacture and sale of vaccines within the states to the Central Drugs regulator (Central Drugs Standards Control Organization), for the purpose of meeting obligation for the Global Benchmarking of Vaccines of the World Health Organization.
Source: bit.ly/3PJkAEw

Major Ayurvedic Medicine manufacturer may be on hook for contempt of court after Supreme Court rejects its apology for publishing misleading advertisements
In its ongoing proceedings against a major Ayurvedic medicine manufacturer for publication of misleading advertisements in contravention of undertaking given by it to the Supreme Court, the Court has refused to accept the apology which was tendered by the manufacturer, and rejected submissions of the manufacturer that: (1) The restriction on advertisement under the Drugs and Magic Remedies (Objectionable Advertisements) Act, 1954 is archaic and may be relaxed since the manufacturer now has scientific data to back its claims, and (2) that the manufacturer should not be held liable for an advertisement issued by an independent marketing department.
Source: bit.ly/4akJen5

Australia updates Medical Device Recall Procedure
The Australian Therapeutics Goods Administration, which regulates medical devices at the central level in the country, has published a revised version of the Uniform Recall Procedure for Therapeutic Goods (URPTG), which relaxes regulatory burden of importers and manufacturers of medical devices. The revised URPTG provides additional clarity on procedure for immediate recall, clarifying timing of release of recall information by the regulator, modifying Customer Response Forms, and eases the filing requirements under the law by making all templates for recall action publicly available on the website of regulator.
Source: bit.ly/3TAZJEo

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TOP 5 HEALTH LAWS AND POLICY UPDATES

Dear Reader, We are happy to share the most interesting legal and policy updates concerning health industry that we read today. We hope you enjoy reading it.

Periodic Safety Update Reports for Medical Devices to be filed only through online portal of CDSCO
The Central Medical Devices Regulator of India (Central Drugs Standards Control Organization) has issued a circular, stating that starting on 1st April 2024 it will require and restrict all manufacturers of Medical Devices/ In-vitro Devices to make submission of Periodic Safety Update Reports, only on the online portal and that offline mode of submission of application will not be accepted going forward.
Source: bit.ly/3TEO74B

Absence of Regulation of Second-Hand Medical Devices being Imported into India flagged by Parliamentary Panel
The Department-related Parliamentary Standing Committee on Chemicals and Fertilisers, in a recent report, has highlighted that currently India’s Central Medical Device Regulations (Medical Devices Rules, 2017) do not regulate second-hand medical devices. The Committee has recommended framing policy to ensure its quality and safety, as well as introducing possible restrictions on import of second-hand or refurbished Medical Devices into India.
Source: bit.ly/3VsdCaQ

Supreme Court Orders Director of Company as well as Endorser of offending Advertisement to be present for Contempt Proceedings relating to misleading advertisements
As part of the ongoing action being taken against a major Indian Ayurvedic Medicine manufacturer for publication of misleading advertisements regarding its products in contravention of an undertaking provided to the Court, the Supreme Court, in pursuance of determining whether to pursue contempt proceedings against the manufacturer, has issued an order requiring the physical presence of the Director of the entity as well as a prominent Ayurvedic Yoga practitioner who had given his endorsement to the claims made in the offending advertisements of the Company.
Source: bit.ly/3vu45VQ

Delhi High Court orders suspension of accounts accused of impersonation of prominent investment group despite objection that no evidence of involvement is provided.
In pursuance of ongoing action against certain anonymous persons impersonating a prominent Investment group and misleading the general public, the Delhi High Court has issued a further order to messaging platform WhatsApp to take action to remove/ block access to certain accounts/ messaging groups, despite objection from the platform that the account/ messaging groups have been prove to neither violate T&Cs of WhatsApp, nor having carried out any illegal activity.
Source: bit.ly/3vkn7hu

EU Parliamentary Committee votes to present amendment to increase exclusivity period for orphan drugs and introduce extended regulatory data-protection period.
The European Parliamentary Committee on Environment, Public Health and Food Safety has voted in favour of introducing several amendments to the current EU Pharmaceutical Directive, including a controversial proposal to increase the exclusivity period for Orphan Drugs from 10 to 11 years, as well as an extended regulatory data-protection period of 9 years; both decisions that industry experts believe may have adverse consequences for competition in the EU Pharmaceutical Market.
Source: bit.ly/3Vr9zeK

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TOP 5 HEALTH LAWS AND POLICY UPDATES

Dear Reader, We are happy to share the most interesting legal and policy updates concerning health industry that we read today. We hope you enjoy reading it.

State Consumer Commissions continue to dilute intermediary safe-harbour protection for e-commerce marketplace
A State Consumer Commission in India has held a major e-commerce marketplace company liable for delivery of incorrect goods to customers, on the grounds that since it offered a ‘fulfilling’ service on behalf of the seller, it was not merely an intermediary but also an agent of the seller. The marketplace was made to pay punitive damages, in addition to mental harassment, on grounds that it may have unscrupulously exploited an unknown uncounted number of consumers.
Source: bit.ly/49VuNW0

Kochi and Thiruvananthapuram proposed to be added to the list of airports from where drugs may be imported
India’s Ministry of Health and Family Welfare has issued a draft notification that will add Kochi and Thiruvananthapuram to the list of airports from which pharmaceutical drugs may be imported into India. The Drugs Rules, 1945 specify that pharmaceutical drugs may be imported into India from a specified number of airports only. The clearance of drugs requires the approval of the Additional Drugs Controller (ADC) Customs, who is generally posted at the customs wing of the airport.
Source: bit.ly/49zbUZ8

Dengue Vaccine Clinical Trials to start soon in India
A major Japanese drug maker has reportedly received clearance from India’s vaccine regulator, Central Drugs Standards Control Organization, to start clinical trials of the dengue vaccine. The vaccine will be contract manufactured by a major biotech company in India.
Source: bit.ly/49OyQ7b

Many medical device companies settled allegations of kickbacks given to doctors in 2023: US Department of Justice
The US Department of Justice (DoJ) has issued a press release that it has recorded the highest number of settlements and judgements in its history. Some of major settlements involved allegations of unlawful kickbacks medical device companies to doctors, in form of above-fair market value supervision fees or remuneration for medical directorships and improper donation of capital equipment.
Source: bit.ly/49X0H4H

Fair-use defense against copyright infringement by AI companies will be tested in new trial by media companies against Open AI
In a new set of lawsuits in the US, media companies are not alleging copyright infringement by AI companies to train the algorithm, but instead alleging that before training, the AI companies removed information from the training material which established that the material was copyrighted, such as the name of the author the news. The Digital Millennium Copyright Act or DMCA, law in the US reportedly prohibits the removal of information that can help copyright holders detect infringement, including article titles, author names, and copyright dates.
Source: bit.ly/3Ih1MbA

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TOP 5 HEALTH LAWS AND POLICY UPDATES

Dear Reader, We are happy to share the most interesting legal and policy updates concerning health industry that we read today. We hope you enjoy reading it.

Guidelines to differentiate brand extension from surrogate advertising issued
In a meeting with stakeholders, the Department of Consumer Affairs (DoCA) has clarified the difference between brand extension advertisements which are permitted, and surrogate advertisements which are not permitted. A brand extension advertisement should not contain direct or indirect references to prohibited products. It should also not use colour, layout, or presentations associated with the prohibited products.
Source: bit.ly/42PKVGk

Draft Pharmacovigilance Guidance Document published for comments
A draft of the revised Pharmacovigilance Guidance Document for Marketing Authorization Holders (MAHs) of Pharmaceutical Products has been published for comments. The last date for providing comments is March 23, 2024. This guidance document facilitates MAHs to setup & implementation of uniform Pharmacovigilance System for pharmaceutical products in the Indian market in the post-licensure period.
Source: bit.ly/3SSrfgw

Many small and medium pharmaceutical manufacturing units have been ordered shut down after increased surveillance
India’s central drug regulator, Central Drugs and Standards Control Organization (CDSCO), and state-level drug licensing authorities have reportedly issued show-cause notices to several drug small and medium manufacturers in the State of Punjab and Himachal Pradesh on grounds of poor quality control, and have also directed some of them to stop manufacturing.
Source: bit.ly/3I88UqP

Pharma MNCs exit domestic market due to regulatory headwinds
Many multinational pharmaceutical companies are reportedly cutting back on operations and manufacturing in India as part of a global strategic review due to regulatory headwinds on account of price control, rising costs, competition, and unfavourable intellectual property climate.
Source: bit.ly/42PaWW9

Frozen embryos should be treated as children: US Court
The Alabama State Supreme Court has ruled that frozen embryos in test tubes should be treated as ‘children’. This ruling has forced in vitro fertilization (IVF) providers in Alabama to stop treating patients, raising questions about the procedure’s continued availability in the state.
Source: bit.ly/3I8T4vR

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New NSWS Portal to obtain permission to import and manufacture new drugs for use in Clinical Trials in India

The India’s Central Drugs and Clinical Trial Regulator, The Central Drugs Standard Control Organization (CDSCO), has issued a public notice that it will no longer accept application for grant of permission to import or manufacture new drugs, unapproved active pharmaceutical ingredients (APIs) of new drugs, or investigational new drugs, which are to be used in laboratory tests or analysis or in domestic or global clinical trials conducted in India. Such applications, from 16th January 2024, will have to be made through the National Single Window System (NSWS) portal only.

What is NSWS portal?

The NSWS portal is a digital platform established by the Indian Government with the aim to act as a single window for all the approvals. The portal enables the investors (manufacturers, importers, traders etc.) to obtain registrations and approvals according to their business requirements.

Which applications for permission in relation to clinical trials will be accepted through the NSWS portal only?

From 16th January 2024, the below mentioned applications in relation to import and manufacture of unapproved APIs, new drugs and investigational new drugs will have to be filed through NSWS portal only:

  • Application for grant of permission to manufacture new drug or investigational new drug for clinical trial or bioavailability or bioequivalence study or for examination, test and analysis (Form CT-10).
  • Application for grant of permission to manufacture formulation of unapproved active pharmaceutical ingredient for test or analysis or clinical trial or bioavailability or bioequivalence study (Form CT-12).
  • Application for grant of permission to manufacture unapproved active pharmaceutical ingredient for development of formulation for test or analysis or clinical trial or bioavailability or bioequivalence study (Form CT-13).
  • Application for grant of licence to import new drug or investigational new drug for clinical trial or bioavailability or bioequivalence study or for examination, test and analysis (Form CT-16).
  • Also, an application for licence to import drugs for purpose of examination, test or analysis (Form-12) was also made live on NSWS portal from 24th January, 2024.

What will happen to the applications that were already filed on Sugam portal before 16th January 2024?

The above-mentioned applications that were filed on the Sugam portal will be processed through that portal only. Any new application post 16th January 2024 should be filed through NSWS portal only. The Sugam portal will be disabled for the filing of these applications after 10th February 2024

Is there any official guidance available to ease the new filings through NSWS portal?

A user guide for the filing of application through NSWS portal for the above-mentioned regulatory approvals is made available along with the notice.

What are the other applications which may be made through NSWS Portal?

On 1st January 2024, CDSCO issued a notice that certain medical device regulatory applications, including application for permission to import or manufacture medical device for clinical investigations, will not be accepted on the current medical device CDSCO portal (CDSCO MD-Online portal) after 15th January 2024. Instead, such applications will be accepted through the NSWS portal only.

For more details, please refer our article which covers this update: New portal for medical devices registration in India (NSWS)

Conclusion:

Sponsors of clinical trials, clinical research organizations (CROs), and various drug testing and analytical laboratories in India, which import unapproved APIs for testing and analysis, or for use in clinical trials, should take note of this very important development, in order to avoid any surprise which may impact the drug development and clinical trial timelines.

At a high-level, it is now clear that, in near future, CDSCO will transition all application forms for all pharmaceutical and medical device licenses and permissions to NSWS.

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New portal for medical devices registration in India (NSWS)

On January 01, 2024, India’s medical device regulator, Central Drugs Standard Control Organization (CDSCO) issued a notice that applications for certain medical device related regulatory approvals will not be accepted on the current medical devices CDSCO portal (CDSCO MD-Online portal) after January 15, 2024. Instead, they will be accepted through the National Single Window System (NSWS) portal only.

This transition is being implemented in stages. In the first phase, medical device related regulatory applications which are described below in this article will be accepted through NSWS portal. In future all medical device related regulatory applications will be accepted and filed through the NSWS portal only.

What is NSWS portal?

The NSWS portal is a digital platform established by the Indian Government with the aim to act as a single window for all the approvals. The portal enables the investors (manufacturers, importers, traders etc.) to obtain registrations and approvals according to their business requirements.

Which medical devices approvals could have been obtained through NSWS portal prior to January 01, 2024?

Importers and manufacturers of medical devices were previously able to use NSWS portal to make application for legal metrology registration, wireless planning and coordination wing’s (WPC) equipment type approval (ETA), import export code (IEC), etc.

Going forward, which medical devices related regulatory applications will be accepted through NSWS portal only?

From January 15, 2024, the list of medical device applications which will be accepted through NSWS portal are as follows:

  • Application for license to import medical devices for the purposes of clinical investigations or test or evaluation or demonstration or training (Form MD-16).
  • Application for license to manufacture medical device for purpose of clinical investigations, test, evaluation, examination, demonstration, or training (Form MD-12).
  • Application for grant of certificate of registration of a Notified Body (Form MD-01).

Is there any guidance for the filing of applications for approvals on NSWS?

There is a user manual for the submission of the applications through the NSWS portal which has been made available by the Indian Government.

What happens to the applications that have been filed before January 01, 2024?

The medical device regulatory applications which were filed before January 01, 2024, through CDSCO MD-Online portal will be processed on the same portal. The medical device regulatory applications that are identified above should not have been filed after January 01, 2024, on CDSCO MD-Online portal. Importers and manufacturers of medical devices will not be able to use CDSCO MD-Online portal for filing regulatory application identified above after January 15, 2024.

Which medical device regulatory applications will be accepted through CDSCO MD-Online portal?

All applications excepting those described above, including applications for import and manufacture of medical devices will be accepted through CDSCO MD-Online portal until further notice.

Conclusion

The transition of certain medical device regulatory applications from CDSCO MD-Online portal to NSWS portal is a welcome development for the importers and manufacturers of medical devices because they will now be able to determine licences/approvals applicable to their business, apply for those approvals and track the status of their applications under one roof i.e. NSWS portal.

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Timelines for obtaining import license for medical devices including IVD’s in India

The import of medical devices including in-vitro medical devices (hereinafter referred to as “medical devices”) in India is regulated by India’s central medical device regulator, the Central Drugs Standard Control Organization (CDSCO). In order to import a medical device into India, the importer has to make an application for import license Form MD-14 of Medical Devices Rules, 2017 (MDR, 2017) before CDSCO. Once the application is processed successfully, the CDSCO grants an import license to the importer in Form MD-15 of MDR, 2017.

Since 1st April 2020, all medical devices (including its accessories and components) are regulated as drugs in India. An import license has been made mandatory to import medical devices depending on its risk classification from the following dates:

  • For Class A and Class B medical devices: 1st October 2022
  • For Class C and Class D medical devices: 1st October 2023

In the paragraphs below, we have answered some of the common questions regarding timelines for obtaining import license for medical devices on the basis of our working knowledge of the law and prevailing practice.

1.  What is the usual time within which an import licence may be granted by CDSCO?

The prescribed timeline for issuance of import license is nine (09) months from the date of application. However, the timeline is suspended if a query on the application is raised by CDSCO.

2. What is the approximate timeline for receiving query from CDSCO on the import license application?

As per current estimate, a query is typically received within a span of 3-4 months from the date of import license application. Please note that CDSCO may raise multiple rounds of queries.

3. How much time does an applicant of import license gets to reply to the queries?

The general expectation of CDSCO is that the queries should be responded within forty-five days from the date of receipt of queries.

4. What happens if a query cannot be responded within 45 days?

If the applicant is facing a difficulty in replying to the query, an intimation may be sent to CDSCO justifying the reason for delay and providing appropriate undertaking.

5. What is the maximum time within which queries have to be responded?

There is no official time limit for responding to the queries which has been stipulated by CDSCO. However, the expectation is to respond to the queries within the reasonable time frame.

6. What is the timeline by which the response to the queries is processed by CSDCO?

There is no prescribed timeline for processing the queries by CDSCO. However, the timeline for grant of import licence is nine (09) months from the date of filing of the application.

7. Is the time taken by the authorities to grant an import licence includes the time taken by the importer to respond to the queries?

No. The total timeline of nine months prescribed for grant of import license is not inclusive of the time taken by the importer to respond to the queries.

8. What is the time limit in which the importer can appeal to the Central Government in case the application is rejected by CSDCO?

If the application is rejected by CDSCO, the applicant may appeal to the Secretary, Ministry of Health and Family Welfare within a period of forty-five days. The Secretary or another officer designated by the Secretary may, after conducting an enquiry into the matter as considered necessary, pass orders in relation to the appeal within a period of ninety days from the date of appeal.

9. What is the validity of import license granted in Form MD-15?

The licence granted by CDSCO under Form MD-15 is valid in perpetuity unless cancelled or surrendered. The validity of the license so granted is subject to the payment of the retention fee by the importer.

10. When is importer license retention fee due to be paid?

The retention fee to retain import license has to be paid by the importer every 5 years.

11. What if the importer of medical device fails to pay the retention fee within the prescribed time period?

If the import licence holder fails to pay the required retention fee on or before the prescribed due date, the license holder is required to pay a late fee in addition to the retention fee.

The late fee will be calculated at the rate of two per cent (2%) of the import license retention fee for every month or part thereof within ninety days. Non-payment of fee until expiry of ninety days will result in cancellation of the import license.

For any business-related queries please write to contact@arogyalegal.com

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TOP 5 HEALTH LAWS & POLICY UPDATES

Dear Reader, We are happy to share the most interesting legal and policy updates concerning health industry that we read today. We hope you enjoy reading it.

Central Drug Regulator to have open-door meetings with Industry twice a week
In a first, perhaps anywhere in the world, India’s top officer in the Drug Regulator’s office, the Drugs Controller General of India (DCGI), has announced that there will be walk-in meetings for the industry every Tuesday and Thursday between 5 and 6 pm, where industry can present its problems and suggestions directly before the officer. The move is aimed at improving Ease of Doing Business in India.
Source: bit.ly/48k9MmX

Waiting for Drug Price Regulator to fix retail prices of new drugs before they can be launched will adversely impact industry
An association of pharmaceutical manufacturers has reportedly submitted an appeal before the Drug Price Regulator, National Pharmaceutical Pricing Authority (NPPA), to recall its notice which directs drug manufacturers to delay launch of new drug until the retail prices of those products have been fixed and notified by NPPA. The association has submitted that notice will negatively impact drug manufacturers’ businesses and cause significant losses.
Source: bit.ly/48cUJvf

Regulatory Data Exclusivity on negotiation table between India and Europe during FTA talks
As per media reports, European Free Trade Association has demanded regulatory data exclusivity for drugs during the discussion on proposed Trade and Economic Partnership Agreement. If India accepts the demand, then Indian domestic drug manufacturers will not be able to rely on clinical trial data of innovator drug manufacturer for obtaining regulatory approvals in India, thereby impacting cost and timelines for generic drugs entry in Indian market.
Source: bit.ly/3T01NHe

Insurance Regulator has proposed to increase free-look time for insurance policies from 15 days to 1 month
As part of the recently published draft IRDAI (Protection of Policyholders’ Interests and Allied Matters of Insurers) Regulations, 2024, the Insurance Regulator (IRDAI) has proposed to increase the free-look time for insurance policies from 15 days to 1 month. The free-look time is the time by which a policy holder of an insurance policy can cancel an insurance policy after purchasing it without liability to him.
Source: bit.ly/3T1PcDr

New York City has sued major social media companies for affecting mental health of youth and children
The New York City Mayor has announced that his administration has sued major social media companies on ground that they have intentionally designed platforms to purposefully manipulate and addict children and teens to social media applications.
Source: bit.ly/3OLyZPY

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Crackdown on Corruption in FDA in India – Key takeaways from recent developments

Two separate incidents, one relating to India’s central drug law enforcement body- the Central Drugs Standards Control Authority (CDSCO), and another relating to a State drugs law enforcement body- the Himachal Pradesh Drugs Control Administration (HPDCA), have received widespread attention. On August 16 2019, a very senior officer of the CDSCO was arrested while accepting a bribe.  On August 23 2019, the residential and office premises of a very senior officer of HPDCA was raided by the vigilance department on bribery allegations. These high profile investigations closely follow the arrest of a Drug Inspector of CDSCO and the Managing Director of a Pharmaceutical Company on grounds of hatching an alleged conspiracy to ‘manage’ adverse results of a government lab test. All these individuals have been charged for commission of offences under India’s anti-bribery law i.e. The Prevention of Corruption Act, 1988.

The official communication from the Central Government with respect to the arrest of its officer reads: “All stakeholders, public and officers shall take cognizance of the fact that CDSCO has the policy of zero tolerance towards corruption and is committed to act stringently against any act of corruption.”

The official communication is very interesting, especially in the background of the reported facts that prompted the arrests.

The complaint against the senior officer of the HPDCA was that he was allegedly receiving “undue favours” such as free air tickets and hotel accommodation from pharmaceutical companies.

The complaint against the Drug Inspector of CDSCO was that he had allegedly demanded a bribe to ignore the deficiency in samples of dobutamine injection. The drug is used to treat acute heart failure

It is not unusual in India for individuals from different verticals of pharmaceutical / medical device business – quality, regulatory, government affairs and senior management, to actually be in direct and repeated contact with officers of the drugs law enforcement bodies for genuine business reasons.

It may not be right to say that such constant interaction is a bad thing. However, it does increase the possibility of corruption. Therefore, it is important to sensitize those in direct contact with government officers that-

  1. It is a criminal offence not just to demand or take a bribe, but also to offer or give a bribe in India.
  2. A bribe does not necessarily have to be in cash. It may be in kind as well such as by way of flight tickets, hotel stays or expensive liquor bottles.
  3. MNCs doing business in India are at higher risk of corruption because, as subsidiaries of US or UK holding companies, they expose the holding companies to the risk of violation of stringent foreign anti-bribery laws such as US Foreign Corrupt Practice Act and UK Bribery Act.

Some important take-aways from the recent crack-down on corruption in the drug enforcement bodies –

  1. The degree of vigilance by CDSCO and other state-level enforcement bodies i.e. State FDAs against corruption has increased. According to reports, a “zero tolerance” policy against corruption has been put in place.
  2. The Managing Director of a pharmaceutical company was arrested along with the Inspector of CDSCO for paying the bribe even though he was not physically present when the bribe was accepted. Therefore, the senior management of a company is especially exposed to an anti-bribery prosecution since they are in charge of day to day operations of the company.
  3. Doing a favour to a government officer, like booking flight ticket or hotel accommodation or providing free medicines/medical devices, may be looked at as an instance of bribe both under Indian and foreign laws.
  4. It is reported that the complaint against HPDCA officer was done by a pharmaceutical company. While it is up to the Courts to establish the veracity of the complaint, it does show that there is scope for refusing a demand of a bribe and for lodging an effective complaint.

Last but not the least, these developments underscore the importance to put in place appropriate systems and processes that act as a risk mitigation tool against the possibility of corruption. At the very minimum, every pharmaceutical and medical device company should have a written policy on corrupt practices that is both comprehensive and practical to suit the reality of India. This must be complemented by regular training sessions to communicate the policy to everyone in the company in a language that they will understand. Some companies have already put in place a whistle-blower policy. The policy must be fine-tuned to escalate potential acts of corruption as well.

Better safe than sorry!