Turning the clock back on the pharma quality code

The Karnataka High Court recently issued a temporary stay on the operation of a crucial clause of the new Good Manufacturing Practice (GMP) code, which came into effect on January 6, 2024. This development follows a spate of deaths linked to substandard manufacturing practices in India’s pharmaceutical industry.

The legal challenge in question was initiated by three pharma lobbies: the Karnataka Drugs & Pharmaceuticals Manufacturers Association, the Federation of Pharmaceutical Entrepreneurs, and the Council for Softgel Gelatin Capsules Manufacturers in India. 

From a reading of the interim order issued by the court, it appears that these lobbies want to continue manufacturing nutraceuticals in the same facilities where their members are manufacturing drugs. The clause that has been stayed by the court is a common-sense provision that mandates that manufacturing premises licensed to produce pharmaceutical drugs must not be used for manufacturing any other products.

In other words, a facility licensed to manufacture drugs should not be manufacturing other products such as chemicals, food items, or nutraceuticals. The rationale behind such a requirement in the GMP code is straightforward: eliminating the possibility of cross-contamination, especially since the personnel involved in manufacturing other items are not subject to the stringent requirements of the GMP code as those involved in manufacturing drugs. 

Despite this simple rationale and sound logic, this clause has had a tortured history in the Indian drug regulatory law. The current incident also illustrates how lobbies with vested interests stymie the process of lawmaking in the country.

The story began in 2001 when the government brought into force the first rigorous GMP Code, based on standards laid down by the World Health Organisation (WHO). That decision was met with a fierce backlash from industry lobbies representing small and medium (SME) pharma manufacturers who argued that they could not afford to upgrade their facilities as required by the new code and so began a negotiation over quality.

In response, the government made a series of concessions to the industry, diluting the efficacy of the new code. One of these concessions pertained to the clause in question in the case before the Karnataka High Court.

The government of the day agreed that all facilities licensed prior to December 11, 2001, would be allowed to manufacture non-drug products on the same premises drugs are manufactured. This was a bizarre exception, neither grounded in science nor common sense. 

Fast forward to the past two years: drugs manufactured in India have been linked to fatal incidents in several countries like Gambia, Uzbekistan, the United States, and Colombia.

As a response to these multiple scandals, the government announced that it would upgrade quality standards for pharmaceutical manufacturing by bringing in a new GMP code, a draft of which had first been published in the Gazette on October 5, 2018. SMEs again pushed back, claiming compliance costs were prohibitive.

In response, the government agreed that the SMEs with a turnover of less than Rs 250 crore would have additional time to comply with the new code—that deadline expired on December 28, 2024.

Among other changes, this new code also removed the earlier exemptions provided to facilities licensed before December 11, 2001, meaning that a facility licensed to manufacture drugs could no longer manufacture any other product on the same premises. Predictably, the industry lobbied extensively against this provision, culminating in the lawsuit before the Karnataka High Court. 

The typical modus operandi of industry lobbies to stall adverse regulatory policies, which benefit public health, is to file multiple lawsuits before different high courts to ensnare the government in prolonged litigation. The stay order issued by the Karnataka High Court will now be used by other industry lobbies to get stay orders from other high courts so that even if the first court vacates its stay order, the government will be embroiled in litigation that could easily extend for a decade.

A similar tactic was used when the Ministry of Health introduced Rule 170 to regulate the advertising practices of the Ayush industry. The rule was challenged in January 2019, and the Delhi High Court issued a limited stay order, which was then used by the industry to get broader stay orders from other high courts.

As the matter languished in court, the industry ramped up a fierce advocacy campaign that finally resulted in
the government deleting the rule from the statute books in 2024. In effect, Rule 170 disappeared without ever
being enforced for a single day in its five years in existence. 

The Karnataka High Court’s decision to issue a stay on the GMP clause is concerning. The industry’s claim that the prohibition on shared manufacturing facilities is “arbitrary and unreasonable” lacks legal merit.

The Supreme Court has repeatedly emphasised judicial deference to government policy on economic and regulatory matters, especially in the context of delegated legislation where the government decides policy issues.

Without any prima facie illegality in the rules being challenged, high courts are expected to refrain from granting temporary stays on such issues. Unfortunately, the Karnataka High Court overlooked this well-established jurisprudence while issuing the stay order. 

The real victims of this regulatory rollback are Indian citizens, who remain vulnerable to the dangers of cross-contamination in drug manufacturing facilities that continue to manufacture nutraceuticals, namkeens, or worse. 

(The writers are co-authors of The Truth Pill: The Myth of Drug Regulation in India)