Drugs and Cosmetics Act, 1940 & 1945 Syllabus PDF

SYLLABUS 1  Manufacture Manufacture in relation to any drug or cosmetic includes, any process or part of a process for making, altering, ornamenting, finishing, packing, labeling, breaking up or otherwise treating or adopting any drug or cosmetic wit...

SYLLABUS 1  Manufacture Manufacture in relation to any drug or cosmetic includes, any process or part of a process for making, altering, ornamenting, finishing, packing, labeling, breaking up or otherwise treating or adopting any drug or cosmetic with a view to its sale or distribution, but does not include the compounding or dispensing of any drug, or the packing of any drug or cosmetic, in the ordinary course of retail business. 2  Prohibition of manufacture and sale of certain drugs and cosmetics no person shall himself or by any other person on his behalf manufacture for sale or for distribution, or sell, or stock or exhibit or offer for sale or distribute (i) any drug which is not of a standard quality, or is misbranded, adulterated or spurious; (ii) any cosmetic which is not of a standard quality or is misbranded or spurious; (iii) any patent or proprietary medicine, unless there is displayed in the prescribed manner on the label or container thereof [the true formula or list of active ingredients contained in it together with the quantities thereof]; (iv) any drug which by means of any statement, design or device accompanying it or by any other means, purports or claims to prevent, cure or mitigate any such disease or ailment, or to have any such other effect as may be prescribed; (v) any cosmetic containing any ingredient which may render it unsafe or harmful for use under the directions indicated or recommended; 3 (vi) any drug or cosmetic in contravention of any of the provisions of this Chapter or any rule made thereunder; sell, or stock or exhibit or offer for sale, or distribute any drug or cosmetic, which has been imported or manufactured in contravention of any of the provisions of this Act or any rule made thereunder; manufacture for sale or for distribution, or sell, or stock or exhibit or offer for sale, or distribute any drug or cosmetic, except under, and in accordance with the conditions of, a licence issued for such purpose under this Chapter: Provided that nothing in this section shall apply to the manufacture, subject to prescribed conditions, of small quantities of any drug for the purpose of examination, test or analysis: Provided further that the CG may, after consultation with the Board, by notification in the Official Gazette, permit, subject to any conditions specified in the notification, the manufacture for sale, or for distribution, sale, stocking or exhibiting or offering for sale or distribution of any drug or class of drugs not being of standard quality. 4  Following licences are provided for manufacturing of drugs under D&C Act: - Drugs other than those specified in Schedule C, C1 and X. - Drugs specified in Schedule C, C1 but not specified in Schedule X. - Drugs specified in Schedule X but not in Schedule C and C1. - Drugs specified in Schedule C, C1 and X. - Drugs for the purpose of examination, test or analysis. - Loan Licence - Repacking Licence - New drugs - Blood products 5  MANUFACTURE FOR SALE OR FOR DISTRIBUTION OF DRUGS (OTHER THAN HOMOEOPATHIC MEDICINES) Licence for the manufacture for sale or distribution of drugs shall be granted or renewed, by the Central Licence Approving Authority (appointed by the CG): (1) Provided that the application for the grant or renewal of such licence shall be made to the LA. (2) On receipt of the application for grant or renewal of a licence, the LA shall, (i) verify the statement made in the application form; (ii) cause the manufacturing and testing establishment to be inspected; and (iii) in case the application is for the renewal of licence, call for the information(s) of the past performance of the licensee. 6 (3) If the LA is satisfied that the applicant is in a position to fulfil the requirements laid down as in these Rules, he shall prepare a report to that effect and forward it along with the application and the licence (in triplicate) to be granted and renewed, duly completed to the Central Licence Approving Authority: Provided that if the LA is of the opinion that the applicant is not in a position to fulfil the requirements laid down in these Rules, he may, by order, for reasons to be recorded in writing, refuse to grant or renew the licence, as the case may be. (4) If on receipt of the application and the report of the LA and after taking such measures including inspection of the premises by the Inspector, appointed by the CG, with or without an expert in the concerned field if deemed necessary, the Central Licence Approving Authority, is satisfied that the applicant is in a position to fulfil the requirements laid down in these Rules, he may grant or renew the licence, as the case may be: Provided that if the Central Licence Approving Authority is of the opinion that the applicant is not in a position to fulfil the requirements laid down in these rules, he may, notwithstanding the report of the LA, by order, for reasons to be recorded in writing, reject the application for grant or renewal of licence, as the case may be. 7  Application for licence to manufacture drugs other than those specified in Schedules C and C1 to the Drugs and Cosmetics Rules In case of manufacture of drugs included in Schedule X: Every application shall be made up to ten items for each category of drugs categorised in Schedule M and shall be accompanied by a licence fee of Rs. 6000 plus an inspection fee of rupees Rs. 1500 for every subsequent inspection or for the purpose of renewal of licence. If a person applies for renewal of a licence after the expiry thereof but within six months of such expiry the fee payable for the renewal of such licence shall be Rs.6000 plus an additional fee at the rate of Rs. 1000 per month or part thereof in addition to an inspection fee of Rs. 1000. A fee Rs. 1000 shall be paid for a duplicate copy of the licence issued, if the original is defaced, damaged or lost. 8  Application for licence to manufacture drugs other than those specified in Schedules C and C1 to the Drugs and Cosmetics Rules In any other case: Every application shall be made up to ten items for each category of drugs referred to in Schedule M relating to pharmaceutical products and Schedule MIII relating to medical devices and in-vitro diagnostics and shall be accompanied by a licence fee of Rs. 6000 plus an inspection fee of Rs. 1500 for every inspection or for the purpose of renewal of licence. If a person applies for renewal of a licence after the expiry thereof but within six months of such expiry the fee payable for the renewal of such licence shall be Rs. 6000 plus an additional fee at the rate of Rs. 1000 per month or part thereof in addition to an inspection fee of Rs. 1500. A fee Rs. 1000 shall be paid for a duplicate copy of the licence issued, if the original is defaced, damaged or lost. 9 Applications for manufacture of more than ten items of each category of drugs as categorized under Schedule M and M-III or for manufacture of additional items of drugs by licensees in Form 24 or Form 24F shall be accompanied by an additional fee at the rate of rupees three hundred for each additional item of drug. Where an application under this Rule is for the manufacture of drug formulations falling under the purview of new drug, such application shall also be accompanied with approval, in writing in favour of the applicant, from the LA. Note: The form of licence to manufacture drugs other than those specified in Schedules C and C1 included in any other case can be done against an application in Form 24 and shall be granted in Form 25. 10  Application for licence to manufacture for sale or for distribution of drugs other than those specified in Schedules C, C1 and X (Form 25) OR Application for licence to manufacture for sale or for distribution of drugs specified in Schedule X and not specified in Schedules C and C1 (Form 25F) Conditions for the grant or renewal of a licence: Following conditions shall be complied with by the applicant. The manufacture shall be conducted under the active direction and personal supervision of competent technical staff consisting at least of one person who is a whole-time employee and who is, 11 (a) a graduate in Pharmacy or Pharmaceutical Chemistry of a University established in India by law or has an equivalent qualification recognized and notified by the CG for such purpose and has had at least 18 months practical experience after the graduation in the manufacture of drugs. This period of experience may, however, be reduced by 6 months if the person has undergone training in manufacture of drugs for a period of 6 months during his University course; or (b) a graduate in Science of a University established in India by law or has an equivalent qualification recognized and notified by the CG for such purpose who for the purpose of his degree has studied Chemistry as a principal subject and has had at least 3 years practical experience in the manufacture of drugs after his graduation; or (c) a graduate in Chemical Engineering or Chemical Technology or Medicine of a University established in India by law or has an equivalent qualification recognised and notified by the CG for such purpose with general training and practical experience, extending over a period of not less than 3 years in the manufacture of drugs, after his graduation; or 12 (d) holding any foreign qualification the quality and content of training of which are comparable with those prescribed above and is permitted to work as competent technical staff under this Rule by the CG: Provided that any person who was immediately before the June 29, 1957, actively directing and personally supervising the manufacture of drugs and whose name was accordingly entered in any licence granted in Form 25 or Form 25F as it existed before the date shall be deemed to be qualified for the purposes of this rule: Provided further that for drugs other than those specified in Schedules C, C1 and X and meant for veterinary use, the whole-time employee under whose supervision the manufacture is conducted shall be a graduate in Veterinary Science or Pharmacy or General Science or Medicine of a University recognized by the CG and who has had at least 3 years practical experience in the manufacture of drugs excluding graduate in Pharmacy who shall have at least 18 months practical experience in the manufacture of drugs: 13 Provided also that the LA may, in the matter of manufacture of disinfectant fluids, insecticides, liquid paraffin, medicinal gases, non-chemical contraceptives, plaster of Paris and surgical dressings, for the manufacture of which the knowledge of Pharmaceutical Chemistry or Pharmacy is not essential, permit the manufacture of the substance under the active direction and personal supervision of the competent technical staff, who, although not having any of the qualifications included in above 3 clauses, has, in the opinion of the LA, adequate experience in the manufacture of such substances. The factory premises shall comply with the conditions prescribed in Schedule M. The applicant shall provide adequate space, plant and equipment for the manufacturing operations; the space, plant and equipment recommended for various operations are given in Schedule M. The applicant shall provide and maintain adequate staff, premises and laboratory equipment for carrying out tests of the strength, quality and purity of the substances at a testing unit, which shall be separate from the manufacturing unit and the head of the testing unit, shall be independent of the head of the manufacturing unit: 14 Provided that the manufacturing units, which, before the commencement of the Drugs and Cosmetics (Amendment) Rules, 1977, were making arrangements with institutions approved by the LA for such tests to be carried out on their behalf may continue such arrangements up to the June 30, 1977: Provided further that for tests requiring sophisticated instrumentation techniques or biological or microbiological methods other than sterility, the LA may permit such tests to be conducted by institutions approved by it under Part XV(A) of these rules for this purpose. The head of the testing unit shall possess a degree in Medicine or Science or Pharmacy or Pharmaceutical Chemistry of a University recognized for this purpose and shall have experience in the testing of drugs, which in the opinion of the LA is considered adequate. The applicant shall make adequate arrangements for the storage of drugs manufactured by him. 15 The applicant shall, while applying for a licence to manufacture patent or proprietary medicines, furnish to the LA evidence and data justifying that the patent or proprietary medicines (i) contain the constituent ingredients in therapeutic/ prophylactic quantities as determined in relation to the claims or conditions for which the medicines are recommended for use or claimed to be useful; (ii) are safe for use in the context of the vehicles, excipients, additives and pharmaceutical aids used in the formulation and under the conditions in which the formulation for administration and use are recommended; (iii) are stable under the conditions of storage recommended; (iv) contain such ingredients and in such quantities for which there is therapeutic justification; and (v) have the approval, in writing, in favour of the applicant to manufacture drugs formulations falling under the purview of new drug, from the LA. The licensee shall comply with the requirements of GMP as laid down in Schedule M. The applicant shall make application for grant of licence for a drug formulation containing single active ingredient only in proper name. 16  Inspection before grant or renewal of licence Before a licence under this Part is granted or renewed the LA or Central Licence Approving Authority, as the case may be, shall cause the establishment in which the manufacture is proposed to be conducted or being conducted to be inspected by one or more Inspectors appointed under this Act with or without an expert in the concerned field. The Inspector or Inspectors shall examine all portions of the premises, plant and appliances and also inspect the process of manufacture intended to be employed or being employed along with the means to be employed or being employed for standardizing and testing the drugs to be manufactured or being manufactured and enquire into the professional qualifications of the technical staff to be employed. He shall also examine and verify the statements made in the application in regard to their correctness, and the capability of the applicant to comply with the requirements of competent technical staff, manufacturing plants, testing equipments and the Requirements of GMP and the Requirements of Plant and Equipment as laid down in Schedule M read with the Requirements of Maintenance of Records as laid down in Schedule U. 17  Report by Inspector The Inspector shall forward a detailed descriptive report giving his findings on each aspect of inspection along with his recommendations after completion of his inspection to the LA or Central Licence Approving Authority, as the case may be. Procedure of LA (1) If the LA or Central Licence Approving Authority, after such further enquiry, if any, as he may consider necessary, is satisfied that the requirements of the Rules under the Act have been complied with and that the conditions of the licence and the Rules under the Act will be observed, he shall issue a licence under this Part. (2) If the LA or Central Licence Approving Authority, is not so satisfied, he shall reject the application and shall inform the applicant of the reasons for such rejection and of the conditions which must be satisfied before a licence can be granted and shall supply the applicant with a copy of the inspection report. 18  Duration of licence An original licence or a renewed licence unless sooner suspended or canceled shall be valid for a period of 5 years on and from the date on which it is granted or renewed: Provided that if the application for the renewal of a licence is made before its expiry, or if the application is made within 6 months of its expiry, after payment of additional fee, the licence shall continue to be in force until orders are passed on the application and the licence shall be deemed to have expired if the application for its renewal is not made within 6 months of its expiry. 19  Conditions of licence A licence shall be subject to the following, namely: (a) the licensee shall provide and maintain staff, premises and the equipment; (b) the licensee shall comply with the provisions of the Act and of these rules and with such further requirements, if any, as may be specified in any rules; provided that where such further requirements are specified in the Rules, these would come into force, 4 months after publication in the Official Gazette; (c) the licensee shall either in his own laboratory or in any other laboratory approved by the LA, test each batch or lot of the raw material used by him for the manufacture of his products and also each batch of the final product and shall maintain records or registers showing the particulars in respect of such tests as specified in Schedule U. The records or registers shall be retained for a period of 5 years from the date of manufacture; (d) the licensee shall keep records of the details of manufacture as per particulars given in Schedule U of each batch of the drugs manufactured by him and such records shall be retained for a period of five years; 20 (e) the licensee shall allow an Inspector appointed under the Act, to enter, with or without prior notice, any premises and to inspect the plant and the process of manufacture and the means employed in standardizing and testing the drugs; (f) the licensee shall allow an Inspector appointed under the Act to inspect all registers and records maintained under these rules and to take samples of the manufactured drugs and shall supply to such Inspector such information as he may require for the purpose of ascertaining whether the provisions of the Act and the rules thereunder have been observed; (g) the licensee shall, from time to time, report to the LA any changes in the expert staff responsible for the manufacture or testing of the drugs and any material alterations in the premises or plant used for the purpose which have been made since the date of the last inspection made on behalf of the LA; (h) the licensee shall, on request, furnish to the LA, the Controlling Authority or to such authorities as the LA or the Controlling Authority may direct from every batch, or batches of drugs as the LA or the Controlling Authority may from time to time specify, a sample of such quantity as may be considered adequate by such authority for any examination and, if so required, also furnish full protocols of tests which have been applied; 21 (i) if the LA or the Controlling Authority so directs and if requested by the licensee who had also furnished prima facie reasons for such directions, the licensee shall not sell or offer for sale any batch in respect of which a sample is or protocols are furnished until a certificate authorizing the sale of the batch has been issued to him by or on behalf of the LA or the Controlling Authority; (j) the licensee shall on being informed by the LA or the Controlling Authority that any part of any batch of the drug has been found by the LA or the Controlling Authority not to conform with the standards of strength, quality or purity specified in these rules and on being directed so to do, withdraw the remainder of the batch from sale, and, so far as may in the particular circumstances of the case be practicable, recall all issues already made from that batch; (k) the licensee shall maintain an Inspection Book to enable an Inspector to record his impressions and the defects noticed; (l) the licensee shall maintain reference samples from each batch of the drugs manufactured by him in a quantity which is at least twice the quantity of the drug required to conduct all the tests performed on the batch. In case of drugs bearing an expiry date on the label, the reference samples shall be maintained for a period of 3 months beyond the date of expiry or potency. In case of drugs where no date of expiry of potency is specified on the label, the reference samples shall be maintained for a period of 3 years from the date of manufacture; 22 (m) the licensee, who has been granted a licence to manufacture for sale or for distribution of drugs specified in Schedule X and not specified in Schedules C and C1, shall- (i) forward to the LA of the concerned States of manufacture and supply of the drug a statement of the sales effected to manufacturers, wholesalers, retailers, hospitals, dispensaries and nursing homes and Registered Medical Practitioners every 3 months; (ii) maintain accounts of all transactions giving details as indicated below in a register bound and serially page numbered and such records shall be retained for a period of 5 years or 1 year after the expiry of potency, whichever is later: A. Accounts of the drugs specified in Schedule X used for the manufacture: 1. Date of issue. 2. Name of the drug. 3. Opening balance of stock on the production day. 4. Quantity received, if any, and source from where received. 5. Quantity used in manufacture. 6. Balance quantity on hand at the end of the production day. 7. Signature of the person in charge. 23 B. Accounts of production: C. Accounts of the manufactured drugs: 1. Date of manufacture. 1. Date of manufacture. 2. Name of the drug. 2. Name of the drug. 3. Batch Number. 3. Batch Number. 4. Quantity of raw material used in 4. Opening Balance. manufacture. 5. Quantity manufactured. 5. Anticipated yield. 6. Quantity sold. 6. Actual yield, 7. Name of the purchaser and his 7. Wastage, address. 8. Quantity of the manufactured 8. Balance quantity at the end of the day. goods transferred. 9. Signature of the person in charge. 24 (n) the licensee shall store drugs specified in Schedule X in bulk form and when any of such drug is required for manufacture in a place other than its place of storage it shall be kept in a separate place under the direct custody of a responsible person; (o) the licensee shall comply with the requirements of Good Laboratory Practices as laid down in Schedule L-I and GMP as laid down in Schedule M. (p) No advertisement of the drugs specified in Schedule H, Schedule H1 and Schedule X shall be made except with the previous sanction of the CG. 25  MANUFACTURE FOR EXAMINATION, TEST OR ANALYSIS Form of application (1) An application for a licence for manufacture of drugs for purposes of examination, test or analysis (Form 29) shall be made to the LA appointed by the SG in Form 30 and shall be made by or countersigned by the head of the institution in which, or a Director of the firm or company by which, the substance will be manufactured. (2) Every application in Form 29 shall be accompanied by a fee of Rs. 250. Duration of licence A licence in Form 29 shall, unless sooner cancelled be in force for a period of 1 year from the date of issue, and may thereafter be renewed for periods of 1 year at a time. 26 Conditions of licence A licence shall be subject to the following conditions (a) the licensee shall use the drugs manufactured under the licence exclusively for purpose of examination, test or analysis, and shall carry on the manufacture and examination, test or analysis at the place specified in the licence; (b) the licensee shall allow any inspector appointed under the Act to enter, with or without notice, the premises where the drugs are manufactured and to satisfy himself that only examination, test or analysis work is being conducted; (c) the licensee shall keep a record of the quantity of drugs manufactured for examination, test or analysis and of any person or persons to whom the drugs have been supplied; (d) the licensee shall comply with such further requirements, if any, as may be specified in any rules subsequently made under the Act and of which the LA has given him not less than 1 month’s notice; (e) the licensee shall maintain an Inspection Book to enable an Inspector to record his impressions and defects noticed. 27 Licence If the person proposing to manufacture a drug for the purpose of examination, test or analysis does not hold a licence in Form 25 (Licence to manufacture for sale or for distribution of drugs other than those specified in Schedules C and C(1) and X) or Form 28 (Licence to manufacture for sale or for distribution of drugs specified in Schedules C and C(1) excluding those specified in Schedule X) in respect of such drugs he shall, before commencing such manufacture, obtain a licence: Provided that in the case of a drug the composition of which is such that the drug is not generally recognized among experts qualified by scientific training and experience to evaluate the safety of drugs as safe for use, no licence in Form 29 shall be granted unless the applicant produces a certificate from the LA, to the effect that there would be no objection to such licence being granted. 28 Cancellation of Licence (1) The LA may after giving the licensee an opportunity to show cause why such an order should not be passed, by an order in writing stating the reasons therefor, cancel a licence issued, either wholly or in respect of some of the substances to which it relates, if, in his opinion, the licensee has failed to comply with any of the conditions of the licence or with any provision of the Act or Rules thereunder (2) A licensee whose licence has been suspended or cancelled may appeal to the SG within 3 months of the date of the order. 29 Labelling Any drug manufactured for the purpose of examination, test or analysis shall be kept in containers bearing labels indicating the purpose for which it has been manufactured. Labelling of drugs supplied to other persons If any drug manufactured for the purpose of examination, test or analysis is supplied by the manufacturer to any other person, the container shall bear a label on which shall be stated the name and address of the manufacturer, the accepted scientific name of the substance if known, or if not known a reference which will enable the substance to be identified and the purpose for which it has been manufactured. 30  REPACKING LICENCE Repacking is a process of breaking up any drug from a bulk container into small packages and labelling with a view to their sale and distribution. Repacking licence is granted for the purpose of breaking up any drug other than those specified in Schedule C and C1. 31  Application for licence to repack drugs other than those specified in Schedules C and C1 (1) Application for grant or renewal of licence to repack for sale or for distribution of drugs, other than those specified in Schedules C and C1 shall be made to the LA appointed by the SG, and shall be made (a) in case of repacking of drugs excluding those specified in Schedule X for sale or distribution, in Form 24B. (2) Every application shall be made up to ten items for each category of drugs categorised in Schedule M and shall be accompanied by a licence fee of Rs. 500 plus an inspection fee of Rs. 200 for every inspection or for the purpose of renewal of licence. (3) If a person applies for renewal of a licence after the expiry thereof but within 6 months of such expiry the fee payable for the renewal of such licence shall be Rs. 500 plus an additional fee at the rate of Rs. 250 per month or part thereof in addition to an inspection fee of Rs. 200. (4) A fee Rs. 1000 shall be paid for a duplicate copy of the licence issued, if the original is defaced, damaged or lost. (5) Applications in Form 24B for licence to manufacture for sale and distribution for repacking for more than 10 items of each category or for manufacture of additional item of drug shall be accompanied by additional fee of Rs. 100 for each additional item of drugs as categorized in Schedule M and M-III. (6) Where an application under this Rule is for the manufacture of drug formulations falling under the purview of new drug, such application shall also be accompanied with approval, in writing in favour of the applicant, from the LA. 32 Conditions for the grant or renewal of a licence in Form 25B - Licence to repack for sale or distribution of drugs being drugs other than those specified in Schedules C and C1 excluding those specified in Schedule X Before a licence in Form 25B is granted or renewed the following conditions shall be complied with by the applicant: (1) the repacking operation shall be carried out under hygienic conditions and under the supervision of a competent person; (2) the factory premises shall comply with the conditions prescribed in Schedule M; and (3) the applicant shall have adequate arrangements in his own premises for carrying out tests for the strength, quality and purity of the drugs at a testing unit which shall be separate from the repacking unit: (4) The application for grant of licence for a drug formulation containing single active ingredient shall be made only in proper name: Provided that the repacking units, which before the commencement of the D&C (Second Amendment) Rules, 1977, were making arrangements with institutions approved by the LA for such tests to be carried out on their behalf, may continue such arrangements up to the July 31, 1977: Provided further that for tests requiring sophisticated instrumentation techniques or biological or microbiological methods, the LA may permit such test to be conducted by institutions approved by it under Part XV(A) of these Rules for this purpose. 33 Explanation: A person who satisfies the following minimum qualifications shall be deemed to be a competent person for the purpose, namely: (a) a person who holds the Diploma in Pharmacy approved by the Pharmacy Council of India under the Pharmacy Act, 1948 or a person who is registered under the said Act, or (b) a person who has passed the Intermediate examination with Chemistry as one of the principal subjects or an examination equivalent to it or an examination recognized by the LA as equivalent to it; or (c) a person who has passed the Matriculation examination or an examination recognized by the LA as equivalent to it and has had not less than 4 years practical experience in the manufacture, dispensing or repacking of drugs. 34 Duration of licence An original licence or a renewed licence in Form 25B unless sooner suspended or canceled shall be valid for a period of 5 years on and from the date on which it is granted or renewed: Provided that if the application for the renewal of a licence is made before its expiry, or if the application is made within 6 months of its expiry, after payment of additional fee, the licence shall continue to be in force until orders are passed on the application and the licence shall be deemed to have expired if the application for its renewal is not made within 6 months of its expiry. 35 Conditions for licence in Form 25B (Licence to repack for sale or distribution of drugs being drugs other than those specified in Schedules C and C1 excluding those specified in Schedule X) A licence in Form 25B shall be subject to the conditions stated therein and to the following conditions: (a) the repacking of drugs shall at all times be conducted under the personal supervision of at least one person who is approved as a competent person by the LA; (b) the licensee shall either provide and maintain adequate arrangements in his own premises for carrying out tests of the strength, quality and purity of the drugs repacked or make arrangements with some institution approved by the LA under Part XV (A) of these rules for such tests to be regularly carried out on his behalf by the institution; (c) the licensee shall make adequate arrangements for the storage of drugs; (d) the licensee shall comply with the provisions of the Act and of these rules and with such further requirements, if any, as may be specified in any rules subsequently made under Chapter IV of the Act: Provided that where such further requirements are specified in the Rules, these would come into force 4 months after publication in the Official Gazette. 36 (e) the licensee shall allow any Inspector appointed under the Act to enter with or without notice, any premises where the packing of drugs in respect of which the licence is issued is carried on, to inspect the premises and to take samples of repacked drugs; (f) the licensee shall, either in his own laboratory or, in any other laboratory approved by the LA, test each batch or lot of raw material used by him for repacking and also each batch of the product thus repacked and shall maintain records or registers showing the particulars in respect of such tests as specified in Schedule U. The records or registers shall be retained for a period of 5 years from the date of repacking. The licensee shall allow the Inspector to inspect all registers and records maintained under these rules and shall supply to the Inspector such information as he may require for the purpose of ascertaining whether the provisions of the Act and these rules have been observed; (g) the licensee shall maintain an Inspection Book, in Form 35, to enable an Inspector to record his impressions and the defects noticed; (h) the licensee shall maintain reference samples from each batch of the drugs manufactured by him in a quantity which is at least twice the quantity of the drug required to conduct all the tests performed on the batch. In case of drugs bearing an expiry date on the label, the reference sample shall be maintained for a period of 3 months beyond the date of expiry of potency. In case of drugs where no date of expiry of potency is specified on the label, the reference samples shall be maintained for a period of 3 years from the date of manufacture. (i) No advertisement of the drugs specified in Schedule H, Schedule H1 or Schedule X shall be made except with the previous sanction of the Central Government. 37  LOAN LICENCE A loan licence means a licence which a LA may issue to an applicant who does not have his own arrangements for manufacture but who intends to avail himself of the manufacturing facilities owned by another licencee. 38 Forms of loan license to manufacture for sale or for distribution drugs specified in Schedule C and C1 excluding drugs specified in Schedule X or of Large Volume Parenterals, Sera and Vaccine and recombinant DNA (r-DNA) derived drugs, and conditions for the grant or renewal of such license. A loan license to manufacture for sale or for distribution of drugs specified in Schedules C and C1, excluding drugs specified in Schedule X, and Large Volume Parenterals, Sera and Vaccine and Recombinant DNA (r- DNA) derived drugs specified in Part XB shall be issued in Form 28A and a loan license to manufacture for sale or for distribution of Large Volume Parenterals, Sera and Vaccine and Recombinant DNA (r-DNA) derived drugs shall be issued in Form 28DA, and the applicant shall, while applying for a licence to manufacture patent or proprietary medicines, furnish to the LA evidence and data justifying that the patent or proprietary medicines (i) contain the constituent ingredients in therapeutic/ prophylactic quantities as determined in relation to the claims or conditions for which the medicines are recommended for use or claimed to be useful 39 (ii) are safe for use in the context of the vehicles, excipients, additives and pharmaceutical aids used in the formulations, and under the conditions in which the formulations for administration and use are recommended; (iii) are stable under the conditions of storage recommended; and (iv) contain such ingredients and in such quantities for which there is therapeutic justification. Provided that the application for grant of a licence for a drug formulation containing single active ingredient shall be made only in proper name. 40 Conditions of license in Form 28A or Form 28DA (1) The license in Form 28A of Form 28DA shall be deemed to be cancelled or suspended, if the licence owned by the licensee in Form 28 or Form 28D whose manufacturing facilities have been availed of by the licensee is cancelled or suspended, as the case may be, under these rules. (2) The licensee shall comply with the provisions of the Act, and of these rules and with such further requirements if any, as may be specified in any rules subsequently made under Chapter IV of the Act, provided that where such further requirements are specified in the rules, those would come into force 4 months after publication in the Official Gazette. (3) The licensee shall test each batch or lot of the raw material used by him for the manufacture of his products and also each batch of the final product and shall maintain records or registers showing the particulars in respect of such tests as specified in Schedule U. Records or registers shall be retained, in the case of a substance for which a potency date is fixed, for a period of 2 years from the expiry of such date and in the case of other substances, for a period of 5 years from the date of manufacture. The licensee shall allow an Inspector to inspect all registers and records maintained under these rules and shall supply to the Inspector such information as he may require for the purpose of ascertaining whether the provisions of the Act and these rules have been observed. 41 (4) The licensee shall either (i) provide and maintain to the satisfaction of the LA adequate staff and adequate laboratory facilities for carrying out tests of the strength, quality and purity of the substances manufactured by him, or (ii) make arrangements with some institution approved by the LA for such tests to be regularly carried out on his behalf by the institution. (5) The licensee shall furnish to the LA, if required to do so, data on the stability of drugs, which are likely to deteriorate for fixing the date of expiry which would be printed on the labels of such drugs on the basis of the data so furnished. (6) The licensee shall maintain reference samples from each batch of the drug manufactured by him in a quantity, which is at least twice the quantity of the drug required to conduct all the tests performed on the batch. In case of drugs bearing an expiry date on the labels, the reference samples shall be maintained for a period of three months beyond the date of expiry of potency. In case of drugs where no date of expiry of potency is specified on the label, the reference samples shall be maintained for a period of three years from the date of manufacture. (7) The licensee shall maintain an Inspection Book in Form 35 to enable an Inspector to record his impressions and the defects noticed. (8) No advertisement of the drugs specified in Schedule H, Schedule H1 or Schedule X shall be made except with the previous sanction of the CG. 42 Duration of loan licence An original loan licence in Form 28A or Form 28DA or a renewed loan licence in Form 26A or Form J, unless sooner suspended or canceled, shall be valid for a period of 5 years on and from the date on which it is granted or renewed: Provided that if the application for the renewal of a licence is made before its expiry, or if the application is made within 6 months of its expiry, after payment of the additional fee, the licence shall continue to be in force until orders are passed on the application and the licence shall be deemed to have expired if the application for its renewal is not made within 6 months of its expiry. The provisions of this Part shall apply to the manufacture of drugs for sale notwithstanding that such drugs are manufactured for sale outside India. 43  OFFENCES AND PENALTIES Penalty for manufacture, sale, etc., of drugs in contravention of this Chapter Whoever, himself or by any other person on his behalf, manufactures for sale or for distribution, or sells, or stocks or exhibits or offers for sale or distributes, (a) any drug deemed to be adulterated or spurious and which when used by any person for or in the diagnosis, treatment, mitigation, or prevention of any disease or disorder is likely to cause his death or is likely to cause such harm on his body as would amount to grievous hurt, solely on account of such drug being adulterated or spurious or not of standard quality, as the case may be, shall be punishable with imprisonment for a term which shall not be less than 10 years, but which may extend to a term of life and with fine which shall not be less than Rs. 10 lakh or three times value of the drugs confiscated, whichever is more; Provided that the fine imposed on and released from, the person convicted under this clause shall be paid, by way of compensation, to the person who had used the adulterated or spurious drugs referred to in this clause. Provided further that where the use of the adulterated or spurious drugs referred to in this clause has caused the death of a person who used such drugs, the fine imposed on and realised from, the person convicted under this clause, shall be paid to the relative of the person who had died due to the use of the adulterated or spurious drugs referred to in this clause. 44 Explanation: For the purposes of the second proviso, the expression "relative" means (i) spouse of the deceased person; or (ii) a minor legitimate son, and unmarried legitimate daughter and a widowed mother; or (iii) parent of the minor victim; or (iv) if wholly dependent on the earnings of the deceased person at the time of his death, a son or a daughter who has attained the age of eighteen years; or (v) any person, if wholly or in part, dependent on the earnings of the deceased person at the time of this death, (a) the parent; or (b) a minor brother or an unmarried sister; or (c) a widowed daughter-in- law; or (d) a widowed sister; or (e) a minor child of a pre-deceased son; or (f) a minor child of a pre-deceased daughter where no parent of the child is alive; or (g) the paternal grandparent if no parent of the member is alive. 45 (b) any drug (i) deemed to be adulterated, but not being a drug referred in the first clause, or (ii) without a valid licence, shall be punishable with imprisonment for a term which shall not be less than 3 years but which may extend to 5 years and with fine which shall not be less than Rs. 1 lakh or three times the value of the drugs confiscated, whichever is more: Provided that the Court may, for any adequate and special reasons to be recorded in the judgment, impose a sentence of imprisonment for a term of less than 3 years and of fine of less than Rs. 1 lakh; Whoever having been convicted of a similar offence, shall be punishable with imprisonment for a term which shall not be less than 7 years but which may extend to 10 years and with fine which shall not be less than Rs. 2 lakh; Provided that the Court may, for any adequate and special reasons to be mentioned in the judgment, impose a sentence of imprisonment for a term of less than 7 years and of fine of less than Rs. 1 lakh; 46 (c) any drug deemed to be spurious, but not being a drug referred in the first clause, shall be punishable with imprisonment for a term which shall not be less than 7 years but which may extend to imprisonment for life and with fine which shall not be less than Rs. 3 lakh or three times the value of the drugs confiscated, whichever is more: Provided that the Court may, for any adequate and special reasons, to be recorded in the judgment, impose a sentence of imprisonment for a term of less than 7 years but not less than 3 years and of fine of less than Rs. 1 lakh; Whoever having been convicted of a similar offence, shall be punishable with imprisonment for a term which shall less than 10 years but which may extend to imprisonment for life and with fine which shall not be less than Rs. 3 lakhs; 47 (d) any drug, other than a drug referred in the above clauses, in contravention of any other provision of this Chapter or any rule made thereunder, shall be punishable with imprisonment for a term which shall not be less than 1 year but which may extend to 2 years and with fine which shall not be less than Rs. 20,000: Provided that the Court may, for any adequate and special reasons, to be recorded in the judgment impose a sentence of imprisonment for a term of less than 1 year. Whoever having been convicted of a similar offence, shall be punishable with imprisonment for a term which shall not be less than 2 years but which may extend to 4 years or with fine which shall not be less than Rs. 50,000, or with both. 48  Penalty for manufacture, sale, etc., of cosmetics in contravention of this Chapter Whoever himself or by any other person on his behalf manufactures for sale or for distribution, or sells, or stocks or exhibits or offers for sale (i) any cosmetic deemed to be spurious or adulterated shall be punishable with imprisonment for a term which may extend to 3 years and with fine which shall not be less than Rs. 50,000 or three times to value of the cosmetics confiscated, whichever is more; (ii) any cosmetic other than a cosmetic referred above is in contravention of any provisions of this Chapter or any rule made thereunder shall be punishable with imprisonment for a term which may extend to 1 year or with fine which may extend to Rs. 20,000, or with both. Whoever having been convicted of a similar offence, shall be punishable with imprisonment for a term, which may extend to 2 years, or with fine, which may extend to Rs. 20,000, or with both. 49  Penalty for non-disclosure of the name of the manufacturer, etc. Whoever contravenes the above provision shall be punishable with imprisonment for a term, which may extend to 1 year, or with fine, which shall not be less than Rs. 20,000, or with both. Penalty for not keeping documents, etc., and for non-disclosure of information Whoever without reasonable cause or excuse, contravenes the above provisions shall be punishable with imprisonment for a term, which may extend to 1 year or with fine which shall not be less than Rs. 20,000, or with both. Penalty for manufacture, etc., of drugs or cosmetics that are prohibited from manufacture in public interest Whoever himself or by any other person on his behalf manufactures or sells or distributes any drug or cosmetic in contravention of the above provisions, shall be punishable with imprisonment for a term which may extend to 3 years and shall also be liable to fine which may extend to Rs. 5,000. 50  Penalty for use of GAs report for advertising Whoever uses any report of a test or analysis made by the CDL or by a GA, or any extract from such report, for the purpose of advertising any drug or cosmetic, shall be punishable with fine, which may extend to Rs. 5,000. Whoever having been convicted of a similar offence, shall be punishable with imprisonment which may extend to 2 years, or with fine which shall not be less than Rs. 10,000, or with both. 51 Confiscation (1) Where any person has been convicted under this Chapter for contravening any such provision of this Chapter or any rule made thereunder as may be specified by rule made in this behalf, the stock of the drug or cosmetic in respect of which the contravention has been made shall be liable to confiscation and if such contravention is in respect of (i) manufacture of any drug deemed to be misbranded, adulterated or spurious; or (ii) manufacture for sale, or for distribution, sale, or stocking or exhibiting or offering for sale, or distribution of any drug without a valid licence; any implements or machinery used in such manufacture, sale or distribution and any receptacles, packages or coverings in which such drug is contained and the animals, vehicles, vessels or other conveyances used in carrying such drug shall also be liable to confiscation. (2) Without prejudice to the provisions where the Court is satisfied, on the application of an Inspector or otherwise and after such inquiry as may be necessary that the drug or cosmetic is not of standard quality or is a misbranded, adulterated or spurious drug or misbranded or spurious cosmetic, such drug or, as the case may be, such cosmetic shall be liable to confiscation. 52