Laws, Procedures & Rules for Ayurvedic & Herbal Companies in India | Healthcare Lawyer in Delhi NCR | Pharma Lawyer in Delhi NCR

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India, which is the second most populous country in the world, has been renowned to have rich health and medical sciences, a few of which date back to several thousand years ago. Since the 1970’s, the government has been giving a professional recognition to practitioners of different medical systems. Among these medical systems, Ayurveda is the oldest, which is being practiced at a wide scale and initially originated in India. Since the last few decades, there has been a steady growth in the sale of Ayurvedic medicine product due to different factors such as the failure of western alopathic medicine, the need for permanent curability, and the minimum side effects, etc. Furthermore, these medicines are more affordable as compared to the cures which can be sourced to western medical systems. Considering the above reasons, there has been an immense growth in the setting up of different pharmaceutical labs and businesses dealing in Ayurvedic Medicine. This sector of the market functions under the purview of the Ministry of Ayurveda, Yoga & Naturopathy, Unani, Siddha, and Homoeopathy (AYUSH) which is endowed with the responsibility of the research and the propagation of certain alternative medical systems in India.

Four Primary Laws, Rules & Regulations which are to be squarely followed by the Ayurvedic & Herbal Companies are:

1. Consumer Protection Act, 1986.
2. Drugs and Cosmetics Act, 1940.
3. Drugs and Magic Remedies (Objectionable Advertisements) Act, 1954.
4. Advertising Standards Council of India (ASCI) Principles.

Compliances to be undertaken under the Consumer Protection Act, 1986.
While coming up with different Ayurveda Products, the company, while marketing the product, must take complete care to ensure that any advertisement put up by them with regard to the product must bear an accurate description of the same, and must not give a false idea about the product to the person viewing the advertisement. An inaccurate description of the product, where the advertiser falsely represents that the medicine is of a certain quality, which it is not in reality, or doctors the image of the product in such a way so as to accentuate its image in the eyes of the public to such an extent that it misleads them, will be subject to liability under the Consumer Protection Act 1986 wherein he/she can be sued for pursuing an “unfair trade practice”, the meaning of which can be made out from the above.

Compliances to be undertaken under the Drugs and Cosmetics Act, 1940.
In India, the Drugs and Cosmetic Act, 1940 and the Drugs and Cosmetic Rules, 1945 state the regulations for the manufacture, distribution, import, labelling, sale, and the packaging of drugs, including Ayurvedic, Unani, and Siddha (ASU) Drugs. The Chapter IV A of the Drugs and Cosmetics Acts, 1940, deals with the provisions relating to Ayurvedic Drugs in India. This Act categorizes prohibited drugs into the following three heads:

1. Misbranded Drugs – An Ayurvedic drug comes within the meaning of a misbranded drug when it appears to be a of a better therapeutic value than it actually is, or if it is not labelled in the prescribed way, or if the product packaging bears a statement or a representation about the drug which is misleading in nature.
2. Adulterated Drugs – The drug is deemed to be adulterated when a part of it comprises of a filthy or a decomposed substance, or if it has been manufactured under insanitary conditions .etc.
3. Spurious Drugs – A drug is said to be spurious when it is offered for sale and sold under a name belonging to other drug, or if it imitates or resembles another drug in a manner which deceives the consumer.

Furthermore, the Central Government can prohibit the manufacture of Ayurvedic drugs under this act in public interest if, the “use of any Ayurvedic, Siddha or Unani drug is likely to involve any risk to human being or animals or that any such drug does not have the therapeutic value claimed or purported to be claimed for it”. Hence, it is suggested that the company takes the necessary steps to ensure that the ayurvedic products manufactured fulfil ethical and transparency standards, and do not fall under the aforementioned heads.

The Drugs and Cosmetics (11th Amendment) Rules, which were implemented in 2018 made it mandatory that, in order to advertise an ayurvedic drug, the manufacturers have to apply to the State Licensing Authority (SLA) for a Unique Identification Number (UIN), so that the advertisement is authorised.

Thus, two things that the company need to ensure under this act are:

1. Maintain transparency and clarity in the manufacturing and sale process by ensuring that the Ayurvedic Drug does not fall under the previously mentioned prohibited categories.
2. File for the Unique Identification Number.

Compliances to be undertaken under the Drugs and Magic Remedies (Objectionable Advertisements) Act, 1954.
Section 3 of the above Drugs and Magic Remedies (Objectionable Advertisements) Act, 1954 expressly prohibits the advertising of certain diseases for “the treatment of certain diseases and disorders”. The section goes on to state that no person shall publish any advertisement referring to the capability of that particular drug to:

1. procure miscarriage in women or to prevent the conception of a child, or
2. enhance the capacity of human beings for sexual pleasure, or
3. correct menstrual disorders in women.
   It is suggested that the company takes care to ensure that the advertisements pertaining to the ayurvedic product do not mislead the public in the above-mentioned ways.

Compliances to be undertaken under the Advertising Standards Council of India (ASCI) Principles.
Back in 2017, the Ministry of Ayurveda, Yoga and Naturopathy, Unani, Siddha and Homeopathy (AYUSH) had entered into a Memorandum of Understanding (MoU) with the Advertising Standards Council of India (ASCI), which is a self-regulatory organisation in the advertising industry, which probes and monitors misleading advertisements that are being published in newspaper, print, and TV media.

The ASCI has its own principles with respect to ensuring transparency and the publishing of genuine advertisements:

1. The representation made by means of the advertisement must be honest.
2. It should not be offensive to the public in any way.
3. The company should refrain from promoting products that are hazardous and harmful to the society.
4. Fairness in competition must be ensured.

Thus, the above points mention the legal Compliances to be undertaken by Ayurvedic Medicine Companies for ensuring transparency and a healthier competition in the marketplace. In the case of Naturalle Health Products (P) Ltd. V. C.C.E., (2004) 9 SCC 136, it was observed by the Hon’ble Supreme Court of India that, “it is clear that a patent Ayurvedic medicament could be one where all the ingredients find mentioned in the authoritative text books on Ayurveda, though the formula for preparation of the medicament is not in accordance with the formula given in those text books. It is not in dispute that all the ingredients are mentioned in the authoritative text books on Ayurveda.”. The Court went on to state that, as long as the products come within the ambit of the term ‘patent or proprietary’ Ayurvedic medicines, and where the required drug licences have been issued, it qualifies to be a genuine market-worthy Ayurvedic product.

Thus, the functioning of the Ayurvedic & Herbal companies including their products is well controlled and regulated in India by way of laws, procedures, regulations, rules and standards.
Authored By: Adv. Anant Sharma & Abhijith Christopher