Under amended guidelines, pharma firms may no longer have to appear in courts for 'minor contraventions'

New Delhi: Pharmaceutical firms may no longer have to appear in courts in case of "certain minor contraventions" and instead, they can pay a monetary penalty, subject to conditions, and take "self-corrective actions", according to amended guidelines, sources said on Monday.

The change in guidelines follows amendments in the Drugs and Cosmetics (Compounding of Offences) Rules, 2025, introduced under the Jan Vishwas Act, which aims to promote ease of doing business by decriminalising minor offences across various laws, including the Drugs and Cosmetics Act, 1940.

The Drugs and Cosmetics Act ensures the safety, efficacy and quality of drugs, cosmetics and medical devices in India. Traditionally, non-compliance under the Act could result in prosecution.

"However, recognising the need to address minor and technical contraventions without overburdening the judicial system, section 32B was introduced to allow for compounding of offences," the rules said.

The Central Drugs Standard Control Organisation (CDSCO), functioning under the Union health ministry, has drafted the Drugs and Cosmetics (Compounding of Offences) Rules, 2025, explaining the new process called "compounding of offences". The rules, however, do not mention the amount of fine and specify offences.

The Drugs and Cosmetics (Compounding of Offences) Rules have been framed under the provisions of section 32B, read with section 33(2)(r) of the Drugs and Cosmetics Act. These rules provide a legal framework for the compounding of certain offences under the Act by allowing companies or individuals to avoid prosecution, subject to conditions and the discretion of the compounding authority.

This mechanism is a significant step towards compliance-focussed regulation and encourages self-correction by regulated entities.

"The Union health ministry has appointed the additional director general of health services dealing with the matters of Central Drugs Standard Control Organisation (CDSCO) as the compounding authority to deal with the compounding of offences under the recently amended Drugs and Cosmetics (Compounding of Offences) Rules, 2025," according to a document accessed by PTI.

The document said applications are submitted to a designated compounding authority, who after reviewing reports from local inspectors decides on eligibility and fixes the fine amount.

The applicants must pay the compounding amount within 30 days to secure immunity.

But the given immunity can also be withdrawn if a person fails to pay the sum of a specified order of compounding passed by the compounding authority.

"The immunity from prosecution in certain cases shall stand withdrawn if a person fails to pay sum of specified order of compounding passed by the compounding authority. The immunity granted to the applicant may be withdrawn by the compounding authority, if satisfied that such applicant had, in the course of compounding proceedings, concealed any particulars, material, or had given false evidence and thereupon, such a person may be tried for the offence...," the document said.