Legal Compliances for Manufacturing & Selling Ayurvedic Medicines in India | Corporate Law Attorney in Delhi NCR | Corporate Lawyer in Delhi NCR |
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“A lot of ayurveda companies have been running their ayurveda business or pharmaceutical business in India but in an organised form. Further, a lot of sham companies were also found selling spurious products and were found playing with the lives of the innocent people. Thus, the Government of India had come up with a plethora of amendments and enactments and brought the ayurvedic companies under the perview of the Indian consumer laws, corporate laws and IT laws respectively. Further the ayurveda companies are bound to follow a lot of legal complainces and several laws are made applicable upon these ayurveda companies. The Pharmaceutical Industry stands as one of the biggest production houses for economic development worldwide. Ayurveda is considered to be the long-established system of Indian medicine. The practice of Ayurvedic medicine is considered to be a well-organized and established method of traditional health care. Ayurveda, in comparison with scientific medication, has both preventive and curative angles. The Ayurveda market in India has exhibited strong and effective growth during 2015-2020. The industry is flourishing as the need and demand from the population for organic products is consistent and multiplies every day. Ayurvedic products portray a positive outlook in the eyes of the consumer and the market.”
As per Rule 3(a) of the Drug and Cosmetics Act, 1940, Ayurvedic, Siddha, or Unani drugs includes “all medicines intended for internal or external use for in the diagnosis, treatment, mitigation or prevention of [diseases or disorder in human beings or animals, and manufactured] exclusively in accordance with the formulae described in, the authoritative books of [Ayurveda, Siddha, Unani Tibb systems of medicine]., specified in the First Schedule.”
Type of License and Certificate issued under Ayurveda: Best Corporate Legal Services for Aurveda Companies
There are numerous types of Ayurvedic products depending on the region and market. The business can be divided into four major categories: Ayurvedic Medicine Shop, Ayurvedic Wholesale Shop, Ayurvedic Marketing Company, and Ayurvedic Manufacturing Company. Every business model has its compliances, advantages, and disadvantages. The Ministry of Ayurveda, Yoga & Naturopathy, Unani, Siddha and Homeopathy, commonly known as Ministry of AYUSH, issues varied types of licenses to manufacture and sell ayurvedic products in India. The licenses are as follows, [a] Retail License (requisite for selling the ayurvedic products as a retailer); [b] Wholesale License (requisite for selling the ayurvedic products as a wholesaler); [c] Manufacturing License (a license from Ministry of AYUSH is requisite wherein all the requirements have to be fulfilled to obtain the permission and also the manufacture is also required to set up his own manufacturing unit); [d] AYUSH Loan License (requisite when the ayurvedic products are being manufactured by a third party and the applicant is not first-hand responsible for the manufacturing of the products and there are necessary requirements and formalities to be fulfilled with the Ministry of AYUSH by both the parties involved in obtaining the license); and [e] AYUSH Contract/ Third Party Manufacturing License (requisite when the applicant handles only the marketing part of the product and remaining compliance and formalities required are conducted by the manufacturing company).
For every business to establish, there is a need to accomplish all the required formalities and compliances so that all the operations are conducted and implemented hassle-free. The need for registration to sell Ayurvedic medicine is thorough and compulsory. The particular company must register as a legal business and need to have a current bank account. For running the Pharmacy, the manufacturers are required to own a prior incense from the particular State Drug Controlling Authority. There are specific formulations required from the competent authority for commercial manufacturing. Numerous certifications are necessary to manufacture and sell Ayurvedic products, such as GMP (Good Manufacturing Practice) Certificate, which assures that the products are produced under the prescribed WHO quality standards. It minimises the risk involved in manufacturing and production. For a manufacturer to sell products throughout the country legally, he must obtain the COPP (Certificate of Pharmaceutical Product). For every certificate or license, there are certain required documents and formalities to be conducted.
Regulations under Drug and Cosmetic Rules, 1945: Best Corporate Legal Solutions for Ayurveda Companies
Part XVI of the Drug and Cosmetic Rules, 1945 lays down stringent provisions with relation to the manufacture for sale of Ayurvedic Drugs. The Bombay High Court in the case of Procter & Gamble India Limited and another v. The Municipal Corporation of Greater Bombay and others, 1993 SCC OnLine Bom 338, in one of its decision held that only those drugs which are manufacture under a valid license issued and in compliance with its provisions can be lawfully sold, exhibited for sale or distributed. Also, in the case of Panama Chemical Words v. Union of India, 1992 (62) E.L.T. 241 (M.P), it was settled that if the good are licenses as a “drug” under the Drug and Cosmetics Act, then they are “drugs” and the license in conclusive of the question.
Rule 153 of the Drug and Cosmetic Rules, 1945 includes the application for license to manufacture Ayurvedic (including Siddha) or Unani drugs. The law mandates a step-by-step procedure for the applicants of manufacturing ayurvedic medicines to fill Form 24-D submitted to the licensing authority along with a fee of rupees one thousand. Furthermore, Rule 157 of the Drug and Cosmetic Rules, 1945 specifies the condition for the grant or renewal of a license as specified in Form 24-D. The conditions are as followed, the manufacturing of the products shall be carried out in hygienic conditions as per Schedule T; the Licensing Authority issues the Certificate of Goods Manufacturing Practices in Form 26 E-1 after verifying the requirements; the manufacture of the ayurvedic products shall be directed and supervised by a competent technical staff consisting of at least one person, who is required to have specific qualities as stated in the rule. The requisite qualifications are divided into five sub parts, that is, [a] a degree in Ayurveda or Ayurvedic Pharmacy, Siddha or Unani system of medicine, as the case may be, conferred by a University, a State Government or Statutory Faculties, Councils and Boards of Indian Systems of Medicines recognised by the Central Government or a State Government, or (b) a diploma in Ayurveda, Siddha or Unani system of medicine granted by a State Government, or (c) a graduate in Pharmacy or Pharmaceutical Chemistry or Chemistry or Botany of a University recognised by the Central Government with experience of at least two years in the manufacture of drugs pertaining to the Ayurvedic or Siddha or Unani systems of medicines, or (d) a Vaid or Hakim registered in a State Register of Practitioners of indigenous systems of medicines having experience of at least four years in the manufacture of Ayurvedic or Siddha or Unani drugs, or (e) a qualification as Pharmacist in Ayurvedic (including Siddha) or Unani systems of medicines, possessing experience of not less than eight years in the manufacture of Ayurvedic or Siddha or Unani drugs as may be recognised by the Central Government. To further emphasise, in the case of M.G. Abrol, Additional Collector of Customs, Bombay v. Shantilal Chhotelal & Co., AIR 1966 Supreme Court, it was stated that once the competent authority under the Drug and Cosmetics Act with an elaborative machinery and experts had classified or determined the good as “ Ayurvedic drugs”, then the octroi authority is bound by that determination.
Moreover, Rule 158 of the Drug and Cosmetic Rules, 1945 lays down the condition for the license, it mandates the licensee to maintain proper records of the details of manufacture and of the tests and prepare an Inspection Book under Form 35 to enable an Inspector to record his impressions and the defects during his inspection. Also, Rule 168 of the Drug and Cosmetic Rules, 1945 explains the standard to be complied with in manufacturing for sale or for distribution of Ayurvedic, Siddha and Unani Drugs. In respect to further requirements, certain information has to be shared with the authority, the site plan of the premises, the attested copy of the No Objection Certificate from Pollution Control Board, the Power Availability Certificate from the Electricity Department of the mentioned area, a list of Machinery or Lab Equipment, the list of medicine to be manufactured, Project Report, Ownership Proof or Rent Agreement, etc. Additionally, to commence a business of selling and manufacturing, the area for manufacturing unit is also one of the things to be considered. Hence, we can conclude that to manufacture and sell Ayurvedic medicines is complied with various requirements and formalities for a smooth flow of operations.
Challenges in the Ayurvedic Business: Best Corporate Lawyer Advice for Ayurveda Companies
Every business in this economy has its drawback and challenges. With a wide range of small and big retailers and companies at all levels, Ayurveda faces standardising issues. In the case of making Ayurveda a mainstream life science, standardisation and quality control are essential. For a business to grow, there is a need to be on par with the technological and infrastructural developments. Somewhere along the line, Ayurveda manufacturers lack the efficient and effective way of production, including the procurement of raw materials to procure raw materials maintain the quality of the medicines. Furthermore, the qualified personnel required for inspection and keeping the shop sometimes is not equipped with the required qualifications and education, thereby questioning the authenticity of the service and products sold. Moreover, the business enterprises as a way to sell their products usually present misleading objectionable advertisements to the consumer and thereby, resulting in a serious hazard to public health and safety. There is also a lack of regulatory requirements for the products’ safety, control check, and quality. There have been various instances where the required personnel and the product at hand was not suitable for the diagnosis. Before the Delhi High Court in, Himalaya Drug Co. v. S.B.L. Ltd 1996 SCC OnLine Del 464, the plaintiff had filed a permanent injunction against the defendant on the allegations that it is engaged in the business of manufacturing and selling Ayurvedic medicinal preparations and has dishonestly and mala fide adopted a specific trade mark which was being used by the Plaintiff for its medicinal. The Court observed that the use of trademarks was creating a confusion or likely to deceive a consumer and that the defendant was not able to prima facie make out a case for vacation from the injunction.
Conclusion
The Drug and Cosmetic Act and Rules are a comprehensive piece of legislation dealing with drugs and providing with standards of quality, misbranding and safeguards the manufacturing, selling and distribution of drugs and cosmetics. But the harsh reality is that, there are manufacturers, retailers, traders etc. who do not abide by the regulations and formalities and take the easy way forward. The mechanism has to be stern and thorough which required the need to follow all the mandatory requirements and compliance and as a member of the Pharmaceutical Industry it is vital keep in check with the current development changes and maintain quality and safety.
Authored By: Adv. Anant Sharma & Mehak Gupta