Posted on

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.

Manufacturers of tobacco products required to register their packing machine(s) with tax authorities
India’s Central Board of Indirect Taxes and Customs (CBIC) has postponed the timeline for manufacturers of tobacco products such as pan-masala, chewing tobacco, smoking mixtures, etc. to report their production capacity. CBIC had in January this year announced that producers must register their filling and packing machines and report these details. The measure was set to be implemented from 1st April 2024. However, the new effective date for implementation of the timeline is now 15th May 2024.
Source: bit.ly/3xz7400

NPPA releases draft ceiling price calculation sheets of seven scheduled formulations
The National Pharmaceutical Pricing Authority (NPPA) has published a preliminary calculation of ceiling prices for seven drug and vaccine formulations, inviting feedback from stakeholders within a ten-day period. These ceiling prices have been adjusted to reflect the minimum and maximum market prices of the products, in accordance with the updated Schedule I of the Drugs (Prices Control) Order, 2013, aligning with the National List of Essential Medicines (NLEM), 2022. The move shall be affecting major pharmaceutical giants in the business of ORS, vaccines and more.
Source: bit.ly/3UhjK4J

High Courts should interfere only when the case in lower court was decided by fraud or collusion: Supreme Court of India
While deciding an appeal against the order of the High Court, the Supreme Court of India observed that the High Court should apply care and caution while entertaining the petitions under Article 226 of the Constitution. The Court further explained that, in case of an already available alternative statutory remedy, the High Court should interfere in the matter only when the case is decided by fraud or collusion, otherwise an order in the same matter by the High Court will mean reopening the issues that have achieved finality.
Source: bit.ly/4cNGwIJ

Goa FDA to get the status of “US FDA observer” amid surge in increase in retail and wholesale licenses
The Goa Food and Drug Administration (FDA) has been extended the invitation to participate as “FDA observer” for inspections conducted by the USFDA India Office. This development came as a result of increase in retail and wholesale licenses issued by Goa FDA and their familiarity with the US FDA’s inspection process.
Source: bit.ly/3UfqIHq

Rejecting apology of the Directors of a Company for misleading advertisements, the Supreme Court sets caution for FMCG companies
Observing caution for fast-moving consumer good (FMCG) companies, the Supreme Court of India has refused to accept an apology from a major Indian Ayurvedic medicine manufacturer for misleading advertisements regarding its products in contravention of an undertaking provided to the Court. The Supreme Court stated that misleading advertisements by FMCG companies result in deceiving innocent consumers and play with public health.
Source: bit.ly/3PYqoKq

Posted on

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.

Greenwashing Regulations Published for Comments
India’s Ministry of Consumer Affairs has published the Draft Guidelines for the Prevention and Regulation of Greenwashing, 2024, which seek to regulate the advertisement of false or misleading environment claims, and/or the downplaying of harmful environmental effects of any product or service by any advertiser or producer. Industry may submit its comment on the draft of the Guidelines until 21st of March 2024.
Source: bit.ly/4bLPO7u

India’s Supreme Court puts controversial amendment of India’s forest law on hold
The Supreme Court of India has put on hold the application of The Forest Conservation (Amendment) Act, 2023 which diluted the scope of forests to only those lands which were either notified as forests or identified as forests in government records. However, the Supreme Court had ordered the Government to follow the dictionary definition of forest until consolidated record of forest lands are prepared by all State Governments.
Source: bit.ly/4bCE6vI

Details of Liaison Officers of Social Media Companies not matter of public record, and so need not be revealed to public: High Court
India’s Delhi High Court has rejected a Public Interest Litigation (PIL), that sought information about persons appointed by major Social Media Companies to handle directions from Government , on the ground that the sole purpose of a Liaison Officer is to co-ordinate and interact with Central Government, and not with the public. Social Media Companies have separately appointed a Grievance Officer to resolve grievances of the public, and the details of Grievance Officer are publicly available.
Source: bit.ly/3ONb5Uk

Couples cannot adopt a healthy child, if they have two or more children: High Court
The High Court at Delhi has issued an order upholding the retrospective validity of a government notification that limited couples with 2 or more children to adopt only special needs children, holding that the right of adoption of a parent is not a protected Fundamental Right under Article 21 of the Indian Constitution, and therefore cannot be prioritized above the right of a child.
Source: bit.ly/3T4VCS9

WHO Urges heightened regulation of Tobacco products and e-cigarettes
Highlighting that the region (South East Asia) has nearly 77% of the global smokeless tobacco consumers, the World Health Organization is calling on governments in South East Asia to intensify efforts and take initiative to control use of tobacco, tobacco products, and e-cigarettes.
Source: bit.ly/3OPT87N

Posted on

Indian Law on advertisement of brand extensions of alcohol and tobacco products and how it poised to become tougher

India’s Ministry of Information & Broadcasting (MIB) recently put out an advisory for private satellite TV channels to ensure that liquor, tobacco and other intoxicants are not advertised directly or indirectly on their channels in violation of existing law, i.e. the Cable Television Network Rules, 1995 (CTNR). Under CTNR, satellite TV channels are prohibited from carrying out an advertisement that directly or indirectly promotes sale or consumption of liquor, wine, cigarettes and tobacco products.

However, advertisement of brand extensions of liquor and tobacco products is permitted under CTNR, provided the product sold under the brand extension does not make direct or indirect references to the prohibited product, it is distributed in reasonable quantity and is available in a substantial number of outlets, and the proposed expenditure on the advertisement of the brand extension product is not disproportionate to the actual sales turn-over of that product.

The enforcement of the provisions of CTNR has been indirectly delegated to a self-regulated industry body called Advertisement Standards Council of India (ASCI) by way of an amendment to CTNR that prohibits TV channels from running any advertisement that violates ASCI’s Code of Self-Regulation in Advertising (ASCI Code). The ASCI Code has a section titled “Guidelines for Qualification of Brand Extension Product or Service”, which as the name suggests, sets out the standards for what would pass as a brand extension and what would not.

As per the ASCI Code, for an advertisement to qualify as a genuine brand extension advertisement (i.e., by implication, not a surrogate advertisement), the in-store availability of the product sold under the brand extension must be at least 10% of the leading brand in the product category OR sales turn-over of the product must exceed INR 5 Crore (50 million) annually or INR 1 Crore (10 million) in the state where the product is distributed. This is a fairly high threshold by Indian standards and many leading brands, including those that put out Music CDs, have been unable to achieve them.

Consequently, some advertisers of liquor and tobacco products have turned to the internet as a media to advertise brand extensions. This is primarily because the CTNR does not apply to advertisements over the internet, there are no clear guidelines for content regulation over the internet, and until very recently, ASCI did not actively track advertisements over the internet.

This is set to change soon. Under the newly notified Consumer Protection Act, 2019 (CPA), the Central Consumer Protection Authority (CCPA) has the power to investigate manufacturers and services providers for misleading advertisement and impose a penalty up to INR 10 lakh (1 million) for the first violation and up to 50 lakh (5 million) for a subsequent violation. The scope of advertisement coved by CPA extends to advertisements over the internet, including in the electronic media, and therefore would cover misleading advertisements made over the internet or electronic media. The CCPA has recently published a draft of Central Consumer Protection Authority (Prevention of Misleading Advertisements and Necessary Due Diligence for Endorsement of Advertisements) Guidelines, 2020 (Draft Guidelines) to discuss what it would consider to be a misleading advertisement. Surrogate advertisements are deemed to be misleading advertisement under the Draft Guidelines, and therefore will be prohibited once the Draft Guidelines are finalized.

The Draft Guidelines do make an exception for brand extension. An advertisement of brand extension will be permitted only if “the advertisement is produced and distributed in reasonable quantities, having regard to the scale of the advertising in question, the media used, and the markets targeted”. In absence of any specification on what would constitute “reasonable quantity”, it is quite likely that CCPA may refer to the ASCI Code to determine what is “reasonable” for the industry, after all, ASCI is a self-regulatory body of the industry. In the event that happens, the high current thresholds for ‘genuineness’ of brand extension advertisement under ASCI Code will be extended for determination of “misleading advertisement” under Consumer Protection Act, 2019, and that may make advertisement of brand extensions more difficult in India than it already is.

Posted on

E-Cigarette and ENDS ban in India: Analysis of laws, consequences and challenges

Last updated: June, 2019

May 31 is observed every year as the World Anti-Tobacco Day. On May 31 of 2019, The Indian Council of Medical Research (ICMR), the apex bio-medical research body of the Indian government, issued a  formal recommendation to ban the sale of e-cigarettes and electronic nicotine delivery systems (ENDS) through-out India. The ICMR recommendation has come at an opportune time since, very recently, the Delhi High Court has stayed the operation of a Central Government circular imploring various Indian States to ban ENDS. 

In this post, we have analyzed the current regulatory framework for the regulation of e-cigarettes and ENDS (hereinafter referred collectively as ENDS for convenience) to evaluate its scope and limitations, as well as decode the method of current regulation of ENDS under Indian law. We have also highlighted the consequences of violation of the ban, if any.

Legal and regulatory framework

Under Indian law, there are five distinct regulatory buckets in which ENDS may fall:

  1. ENDS as a combination product of drug and medical device
  2. ENDS as a tobacco product
  3. ENDS (nicotine) as food
  4. ENDS (nicotine) as a poison
  5. ENDS (nicotine) as an insecticide

We will deal with each regulatory bucket in the paragraphs below.

Combination of Drug and Medical Device

Preparations of nicotine are regulated as a drug in India. In fact, the sale of gums and lozenges containing more than 2 mg of nicotine requires a retail drug license.

As per a survey carried by the author, most States in India have regulated ENDS as a drug (since substances and devices are deemed to be drugs in India). Under the Drugs and Cosmetics Act, 1940 and its rules (“Drug Laws“), a license is required to import, manufacture and sell drugs. Wherever State Governments have banned ENDS, they have done so by refusing to issue a license to undertake any commercial activity related to ENDS on the grounds that ENDS is not approved for sale as a drug. This position has been endorsed by the Central Government as well, who had released in advisory for all States in India to that effect in August 2018.

Import, manufacture or sale of ENDS in violation of Drug Laws could result in confiscation, fine and imprisonment for the company involved as well as the person in charge of the operations of the company. 

However, two separate Delhi High Court orders have raised serious questions over the legal basis of the ban on ENDS. In Piush Ahulawalia v. Union of India, the Delhi High Court clarified that the Central Government’s advisory was not binding, and therefore the State Governments were free to chart their own course in terms of banning (or not banning) ENDS. In Focus Brand Trading India Pvt. Ltd. and Anr  v. DGHS and Ors., the Delhi High Court went a step ahead and questioned whether ENDS could be regulated as the drug in the first place. The March 2019 order passed in this matter effectively brings into question any ban enforced on ENDS on the assumption that ENDS is a drug.  A Customs notification released in November 2018 had made it mandatory that import consignments of ENDS would require prior approval of Additional Drugs Controller, Customs. The said notification has also been stayed by the March 2019 order. 

In the author’s own considered opinion, however, the government is well within its powers to regulate ENDS as a drug. It is a fact that nicotine is a drug. As per the current construct of Drug Laws, a drug when consumed for non-medicinal purpose would remain a drug and be regulated as one. Therefore, what is actually left to be established whether the system i.e. ENDS is drug or not. As most readers are aware, ENDS is just a system that delivers nicotine. Therefore, it is not a chemical but a device. Drug Laws do not regulate all devices. They regulate notified devices only and ENDS is not a notified device. Therefore, ENDS sans nicotine cannot be said to be regulated under the Drug Laws. But a combination of ENDS with nicotine (i.e. refill) should certainly qualify as a drug. There are enough instances where such combination products have been regulated as drugs in India in the past. For instance, a Glucometer by itself is not a drug (at least not until January 1, 2020). But a Glucometer when sold along with glucose strips is regulated as a drug, because glucose strips are regulated as drugs. This analogy squarely applies to ENDS sold with nicotine refills.

Having said that, what is important to remember that the Drugs Laws do not ban ENDS with nicotine refills. Therefore, it is possible to structure business operations in a manner that it would be lawful to carry out the business of ENDS with nicotine refills under a drug license in India. 

ENDS as a Tobacco product

Most jurisdictions around the world, including the US and Europe, regulate ENDS as a tobacco product. In India, tobacco products are regulated by law, but in a limited manner. The Cigarette and Other Tobacco Products Act, 2003 and its rules (“Tobacco Laws”) regulate advertisement, sale to minors and labelling of cigarettes and tobacco products, but stop short of giving power to the government to ban a tobacco product in India. In other words, the Tobacco Laws in India impose compliance requirements for cigarettes and tobacco products, but the government cannot use it to ban import, manufacture or sale of tobacco product in India so long as the tobacco products are compliant to the requirements stipulated by law. Interestingly, the definition of ‘tobacco product’ under Tobacco Laws is exhaustive, and it means any product that is listed in the Schedule to the main Act. ENDS is not listed in that Schedule yet. Therefore, it is strongly arguable that Tobacco Laws in India do not apply to ENDS at all. 

Suffice it is to say that the Tobacco Laws, as they exist today, do not (read cannot) ban the sale of ENDS with nicotine refills.

ENDS as food

Food in India is regulated by the Food Safety and Standards Act, 2006 and the rules and regulations made under it (“Food Laws”). The definition of “food” under India’s Food Laws extends to substances in the form of liquid, gas or vapour. Therefore, nicotine, when consumed in form of gas or vapour, may qualify as food. The consumption of nicotine as a food ingredient has been specifically banned under Food Laws. States such as Tamil Nadu and Union Territories like New Delhi have also issued notifications (1, 2) banning “all food products chewable or otherwise… containing tobacco and/or nicotine as ingredients” in public interest for successive periods of one year.

This makes it unequivocally clear that any food containing nicotine cannot be sold in India. It is but natural to conclude that the language of the ban would engulf ENDS with nicotine refills as well. A violation of Food Laws could result in confiscation, fine and imprisonment for the company involved as well as the person in charge of the operations of the company. 

However, the ban on products containing nicotine imposed through food laws is not without controversy. Over the last few years, different High Courts have given contrary decisions on whether tobacco products should be regulated exclusively under Tobacco Laws or both Tobacco and Food Laws. A February 2019 Madras High Court judgement has highlighted this contrarian position as well. Therefore, until the Supreme Court of India decides on this issue, it is possible to argue today that ENDS with nicotine refills should not be regulated as food, but rather as a tobacco product and be governed exclusively by the Tobacco Laws (which incidentally does not give power to the government to ban ENDS). This means that the ban on nicotine as food or food ingredient may have no bearing on ENDS with nicotine refills. 

ENDS as a poison

India regulates import and sale of poisons, in the same manner as drugs. A license is required to import or sell poisons. The difference between drug regulation and poison regulation is that every state has the power to notify any chemical as a poison and regulate it (this legal position has been upheld by Supreme Court as well). Thus, given the ambiguity surrounding the application of drug regulation to ENDS, some states in India have decided to notify nicotine as a poison under the Poisons Act, 1919 and thus regulate ENDS. For instance, Punjab has regulated nicotine as a poison since 2014.

A violation of the Poisons Act, 1919 could result in confiscation, fine and imprisonment.

Again, like drug regulations, the Poisons Act, 1919 does not ban the sale of ENDS with nicotine refills. Therefore, it is possible to structure business operations in a manner that it would be lawful to carry out the business of ENDS with nicotine refills under a poisons license in India.

ENDS (nicotine) as an insecticide

The chemical, Nicotine Sulphate, and preparations made out of it, have been identified as insecticide under the Insecticides Act, 1968. Any person desiring to import or manufacture or sell an insecticide requires regulatory clearance from the government.

However, Insecticides Act, 1968 itself exempts “Any substance specified or included in the schedule or any preparation containing any one or more such substances, if such substance or preparation is intended for purposes other than preventing, destroying, repelling or mitigating any insects, rodents, fungi, weeds and other forms of plant or animal life not useful to human beings“. Due to the said exemption, the fact that nicotine sulphate and its preparations are insecticides has no bearing for ENDS with nicotine refills, because it not intended to be used as an insecticide.

Takeaways

On the strength of the above analysis, it is difficult to say that trade in ENDS has been conclusively or comprehensively banned in India. It is true that some states such as Punjab, Tamil Nadu and Karnataka have banned the trade of ENDS within their territory, but such a ban does not appear to have a very strong backing of a statute. This becomes more evident as one peruses the actual text of the administrative orders through which the ban has been imposed, because there is hardly, if any, statutory provision cited in those orders to support the ban and the government appears to be relying solely on “public interest” to support its stance. Numerous media reports (1, 2) have also indicated that the government is struggling to find a way to ban ENDS. Therefore, it appears that the stage is set for the courts, especially the Supreme Court, to clarify the position on the so-called ban on ENDS in India. Until then, it cannot be said that it is not possible to do the business of ENDS in India.