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Drugs and Cosmetics Act, 1940 - Complete High-Yield Study Guide

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PART 1 - THE SCHEDULES (First, Second + Rule Schedules)

First Schedule - Books of Standards (Section 3(b))

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Second Schedule - Standards of Quality

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High-Yield Rule Schedules (Drugs & Cosmetics Rules 1945)

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PART 2 - IMPORT OF DRUGS (Chapter III)

Section 10 - Prohibited Classes (The "MASque" List)

┌─────────────────────────────────────────────────────────────┐
│  SECTION 10 - PROHIBITED DRUG IMPORTS                       │
├─────────────────────────────────────────────────────────────┤
│  (a) Not of standard quality (below First/Second Schedule)  │
│  (b) Misbranded (Section 9 definition)                      │
│  (c) Adulterated (Section 9A definition)                    │
│  (d) Spurious (Section 9B definition)                       │
│  (ee) Cosmetic tested on animals [post-2014 amendment]      │
│  (f) Without valid import licence (Form 10)                 │
│  (g) Any drug notified by CG under Section 10A as dangerous │
│       or lacking therapeutic value                          │
└─────────────────────────────────────────────────────────────┘

• Is likely to cause risk to human beings/animals
• Lacks claimed therapeutic value
• Contains ingredients with no therapeutic justification

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Import Licensing - Flowchart

INTENDING IMPORTER
        │
        ▼
  Is drug in Section 10 prohibited list?
        │
   YES ──────────────────────────────────► IMPORT PROHIBITED
        │                                  (unless special permit)
       NO
        │
        ▼
  Obtain Licence from Central Licensing Authority (CLA / CDSCO)
  ┌─────────────────────────────────────┐
  │  Form 10  → Regular import licence  │
  │  Form 11  → Import for examination/ │
  │             test/analysis only      │
  │  Form 8   → Import of new drugs     │
  │             (requires clinical data)│
  └─────────────────────────────────────┘
        │
        ▼
  Special Exceptions (Rule 33/33A):
  ┌──────────────────────────────────────────────────────┐
  │ Rule 33   - Small quantities for Test/Analysis       │
  │             (licence Form 11 required)               │
  │ Rule 33-A - New drugs for life-threatening diseases  │
  │             (Govt hospital / autonomous institution) │
  │ Rule 136  - Cosmetics for personal use (baggage)     │
  └──────────────────────────────────────────────────────┘
        │
        ▼
  Labelling compliance: Parts IX, X, XII of Rules
  (Name, manufacturer, expiry, country of origin mandatory)
        │
        ▼
  CUSTOMS CLEARANCE (Section 11 applies Sea Customs Act 1878)

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Section 13 - Penalty Table (Verified Against Bare Act)

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PART 3 - MANUFACTURE OF DRUGS (Chapter IV)

Section 18 - Prohibitions (The "7-Arm" List)

┌────────────────────────────────────────────────────────────────┐
│  SECTION 18(a) - PROHIBITED MANUFACTURE/SALE                   │
├────────────────────────────────────────────────────────────────┤
│  (i)   Drug not of standard quality / misbranded / adulterated │
│        / spurious                                              │
│  (ii)  Cosmetic not of standard quality / misbranded / spurious│
│  (iii) Patent/proprietary medicine without displaying true     │
│        formula or active ingredient list on label              │
│  (iv)  Drug without a valid licence under Section 18(c)        │
│  (v)   Drug in contravention of any condition of the licence   │
│  (vi)  Drug that is a New Drug without approval under Rule 122E│
│  (vii) Any drug in violation of any notified restriction       │
│        (Section 26A/26B)                                       │
└────────────────────────────────────────────────────────────────┘

SECTION 18(b) - BANNING ADVERTISEMENTS
  No drug advertisement claiming cure of a Schedule J disease

SECTION 18(c) - LICENCE MANDATORY
  No manufacture without a licence granted by Licensing Authority
  (Licence under Rule 68/69 for allopathic drugs)

WANT TO MANUFACTURE A DRUG FOR SALE?
             │
             ▼
  Step 1: Is it a New Drug (Rule 122E)?
             │
         YES ──► Get Central Govt approval (CDSCO New Drug Approval)
             │        + Clinical trial data (Schedule Y)
            NO
             │
             ▼
  Step 2: Is it a standard quality drug (First/Second Schedule)?
             │
          NO ──► PROHIBITED under Sec 18(a)(i)
             │
           YES
             │
             ▼
  Step 3: Apply for Manufacturing Licence
      ┌────────────────────────────────────────┐
      │  State Licensing Authority (SLA)       │
      │  Application in Form 24 (allopathic)   │
      │  Premises inspection                   │
      │  GMP compliance (Schedule M)           │
      └────────────────────────────────────────┘
             │
             ▼
  Step 4: Licence granted → Form 25 (allopathic)
             │
             ▼
  Step 5: Ongoing compliance:
      - Schedule M (GMP) at all times
      - Qualified Person (QP) on premises
      - Testing (in-house or approved lab)
      - Records / Schedule U compliance
      - Annual returns
             │
             ▼
  MANUFACTURE PERMITTED

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Schedule M - GMP Requirements (Key Points)

1. Buildings & Premises - adequate space, clean room classifications, segregated areas for quarantine/sampling/manufacturing/dispensing/finished goods
2. Equipment - validated, calibrated, material-appropriate (stainless steel where required)
3. Personnel - Qualified Person must be present; training records; health surveillance
4. Sanitation & Hygiene - SOPs for cleaning, pest control, gowning
5. Documentation - Batch Manufacturing Records (BMR), Standard Operating Procedures (SOPs), Batch Packing Records
6. Quality Control - In-process testing, release testing, reference samples kept for 3 years (or 3 months post-expiry for expiry-dated drugs)
7. Self-Inspection - Periodic internal audits
8. Complaints & Recalls - Written procedures mandatory

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The Four Special Licence Types

SPECIAL MANUFACTURE SITUATION?
          │
    ┌─────┴──────┐
    │            │
    ▼            ▼
Do you have    Do you have
your own       your own
premises?      formula?
    │               │
   NO              NO
    │               │
    ▼               ▼
LOAN LICENCE    TEST/ANALYSIS
(Form 25A)      LICENCE
                (Form 11/24)
    │
   YES (have premises but no formula)
    │
    ▼
REPACKING LICENCE
(Form 25B)
    │
Is it a brand new drug (Rule 122E)?
    │
   YES
    │
    ▼
NEW DRUG LICENCE
(Form 44, CDSCO Central)

• Loan licence (25A) = own formula, borrow premises
• Repacking (25B) = own premises, handle bulk from another manufacturer
• New Drug (44) = Central approval only (not State SLA)
• Test/Analysis = non-commercial, Inspector access compulsory

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PART 4 - SECTION 27 PENALTY LADDER

Verified Against Bare Act (CDSCO Official PDF + India Code)

═══════════════════════════════════════════════════════════════════
                    SECTION 27 PENALTY LADDER
═══════════════════════════════════════════════════════════════════

  Sec 27(d)  │ Any other contravention (not falling in a/b/c)
             │ e.g. licence condition breach, labelling error
             │ ► Imprisonment up to 1 YEAR
             │ ► Fine ≥ ₹20,000
             │   (Court may reduce below 1 yr on recorded reasons)
─────────────────────────────────────────────────────────────────
  Sec 27(c)  │ Adulterated drug (Sec 17A) not likely to cause
             │ death/harm BUT quality below standard
             │ ► Imprisonment: 1 to 3 YEARS + fine ≥ ₹50,000
─────────────────────────────────────────────────────────────────
  Sec 27(b)  │ Spurious drug (Sec 17B) OR drug failing standard
             │ NOT causing/likely to cause death or grievous hurt
             │ ► Imprisonment: NOT < 7 YEARS, up to LIFE
             │ ► Fine ≥ ₹3 lakh OR 3x value of drugs (whichever
             │   more)
             │   Proviso: Court may impose < 7 yrs / < ₹1 lakh
             │   for adequate and special recorded reasons
─────────────────────────────────────────────────────────────────
  Sec 27(a)  │ Adulterated (Sec 17A) or Spurious (Sec 17B) drug
  [HIGHEST]  │ WHICH CAUSES/IS LIKELY TO CAUSE DEATH or GRIEVOUS
             │ HARM when used for treatment/prevention/diagnosis
             │ ► Imprisonment: NOT < 10 YEARS, up to LIFE
             │ ► Fine ≥ ₹10 lakh OR 3x value of drugs confiscated
             │   (whichever more)
             │   Proviso: Court may impose < 10 yrs for adequate/
             │   special reasons recorded in judgment
═══════════════════════════════════════════════════════════════════

• "3" = minimum for Sec 27(c) type offences in subsequent conviction context
• "7" = minimum for Sec 27(b) (spurious without death)
• "10" = minimum for Sec 27(a) (spurious/adulterated causing death/grievous hurt)
• "Life" = maximum for both Sec 27(a) and 27(b)

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PART 5 - CONSOLIDATED MANUFACTURE-TO-SALE COMPLIANCE FLOWCHART

══════════════════════════════════════════════════════════════════
            MANUFACTURE → DISTRIBUTION → SALE COMPLIANCE
══════════════════════════════════════════════════════════════════

[A] PRE-MANUFACTURE STAGE
  ┌─────────────────────────────────────────────────────────┐
  │  Is it a NEW DRUG (Rule 122E)?                          │
  │      YES → CDSCO approval + Schedule Y data (Phase I-III│
  │              clinical trials) → Form 44 (New Drug Lic.) │
  │      NO  → Proceed to [B]                               │
  └─────────────────────────────────────────────────────────┘

[B] LICENSING (Sec 18(c), Rule 68-69)
  ┌─────────────────────────────────────────────────────────┐
  │  Apply to STATE Licensing Authority (SLA)               │
  │  Form 24 → Inspection → Schedule M GMP compliance       │
  │  Qualified Person (QP) on site                          │
  │  Form 25 GRANTED                                        │
  │                                                         │
  │  OR Special licences:                                   │
  │    Loan (25A) / Repacking (25B) / Test (Form 11)        │
  └─────────────────────────────────────────────────────────┘

[C] MANUFACTURE (Schedule M compliance)
  ┌─────────────────────────────────────────────────────────┐
  │  → GMP premises (Schedule M)                            │
  │  → QP present throughout                                │
  │  → Batch Manufacturing Record (BMR) maintained          │
  │  → In-process quality checks                            │
  │  → Quarantine of finished goods pending QC release      │
  └─────────────────────────────────────────────────────────┘

[D] QUALITY CONTROL & TESTING
  ┌─────────────────────────────────────────────────────────┐
  │  → Test against First/Second Schedule standards         │
  │  → Government Analyst testing (Sec 20-25)               │
  │  → Reference samples retained:                          │
  │     - 3 yrs (no expiry date on label)                   │
  │     - 3 months beyond expiry date                       │
  │  → Batch release certificate by QP                      │
  └─────────────────────────────────────────────────────────┘

[E] LABELLING & PACKAGING (Parts IX, X of Rules)
  ┌─────────────────────────────────────────────────────────┐
  │  → Manufacturer name + address                          │
  │  → Batch No., Date of manufacture, Expiry date          │
  │  → Schedule-specific labels:                            │
  │     Sch G  → "CAUTION - Medical supervision only"       │
  │     Sch H  → "Rx" symbol                                │
  │     Sch H1 → RED STRIP across top                       │
  │     Sch X  → Special markings + Form 20-A dispensing    │
  │  → Patent medicine → list all active ingredients        │
  │  → No false claims (Sch J disease cure prohibition)     │
  └─────────────────────────────────────────────────────────┘

[F] DISTRIBUTION
  ┌─────────────────────────────────────────────────────────┐
  │  → Wholesale licence (Form 20/21)                       │
  │  → Cold chain for Schedule C drugs                      │
  │  → Records: invoice, stock register maintained          │
  └─────────────────────────────────────────────────────────┘

[G] RETAIL SALE
  ┌─────────────────────────────────────────────────────────┐
  │  → Retail licence (Form 20)                             │
  │  → Registered Pharmacist on premises                    │
  │  → Prescription register for Sch H, H1, X drugs        │
  │  → Sch H1 prescription retained 2 years                 │
  │  → Sch X: no repeat dispensing without fresh Rx         │
  │  → No Sch H/H1/X without valid prescription             │
  └─────────────────────────────────────────────────────────┘

[H] PENALTIES IF NON-COMPLIANT
  ┌─────────────────────────────────────────────────────────┐
  │  Manufacture violation → Sec 27(a/b/c/d) ladder         │
  │  Import violation      → Sec 13 ladder                  │
  │  Subsequent offences   → Sec 30 (enhanced penalties)    │
  │  Cognizable offence    → Spurious causing death (non-   │
  │                          bailable, cognizable)           │
  └─────────────────────────────────────────────────────────┘
══════════════════════════════════════════════════════════════════

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PART 6 - MASTER MNEMONICS CHEATSHEET

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QUICK EXAM TRAPS & HIGH-YIELD POINTS

1. Section 27 vs Section 13 fines - Sec 27 fines run into lakhs (₹10 lakh for death-causing drugs); Sec 13 fines are tiny (₹500-₹5,000) - often tested as a contrast
2. Loan licence (25A) auto-cancellation - If the licensor's Form 25 is cancelled/suspended, the loan licensee's Form 25A is automatically cancelled. No separate notice needed.
3. Schedule H1 = Red Strip (NOT red box, not red cross - it is a RED STRIP across the label top). Prescription must be RETAINED by the chemist for 2 years. Introduced by 2013 amendment targeting antibiotic resistance.
4. New Drug approval = CDSCO (Central), NOT State SLA - A common exam distractor
5. Section 18 proviso - Manufacture of small quantities for examination/test/analysis is EXEMPT from Section 18 restrictions (but requires licence under Section 18(c)/Rule 68)
6. Section 27(a) threshold - "Likely to cause death OR grievous harm" - not actual death. If the spurious drug only MIGHT cause harm (established by evidence), Sec 27(a) applies.
7. Cognizable & non-bailable - Offences involving spurious/adulterated drugs that cause death are cognizable (police can arrest without warrant) and non-bailable
8. Schedule C drugs - Need extra conditions (cold chain, special containers), and their manufacture is regulated by the Central Licensing Authority (not State), unlike most other drugs
9. No advertisement of Sch H/H1/X - Advertisement of these drugs requires prior sanction of the Central Government (Rule 74)
10. Reference sample retention - 3 years (if no expiry date) vs 3 months beyond expiry - frequently tested in MCQs

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