The Drugs and Cosmetics Act, 1940

What it does

The Act is Act No. 23 of 1940 and it is the main statute on the quality and legality of drugs and cosmetics. It controls their import, their manufacture, and their sale and distribution, and it does so principally by requiring a licence for each activity and by forbidding the sale of drugs that are misbranded, adulterated or spurious.

The Act is short and general. The detail is in rules made under it, chiefly the Drugs Rules, 1945, whose Schedules lay down standards, forms and conditions. A manufacturer's day-to-day obligations are therefore read from the Rules and their Schedules, and the Act supplies the prohibition and the penalty.

The Act is administered by the central regulator, the Central Drugs Standard Control Organisation, together with State licensing authorities, which divide the licensing work. Clinical trials and new drugs are dealt with under separate rules made under the Act, the New Drugs and Clinical Trials Rules, 2019.

Who it binds

Importers, manufacturers, wholesalers and retailers of drugs and cosmetics, and the persons in charge of the business. A licence is held by the business and is subject to conditions, and the Act reaches the person responsible for the conduct of the company where the company is the offender. It also reaches the person who sells without a licence, however small the business.

What has changed, and when

The Act has been amended a number of times, including by an amending Act of 2008 that raised penalties for the more serious offences. The more frequent change comes through rules and notifications, because a Schedule can be amended without a change to the Act. The site's note on Schedule M shows the pattern: the Ministry of Health and Family Welfare notified G.S.R. 922(E) on 28 December 2023 under the Act and substituted Schedule M to the Drugs Rules in its entirety.

What turns on it in practice

For the healthcare practice, the link between the Act and a Schedule is the point to understand. The site's note explains it for revised Schedule M. Rule 74(o) of the Drugs Rules makes compliance with Schedule M a condition of a manufacturing licence in Form 25 and Form 25F, rule 76(8) does the same for licences for drugs in Schedules C and C(1), and rule 78(p) for a licence in Form 28, 28B or 28D. Section 18(c) of the Act then prohibits manufacture for sale except in accordance with the conditions of a licence. A manufacturer that does not meet the Schedule is therefore outside the terms on which it may make the product at all, and the consequence follows from the Act and not only from the Schedule.

The dates in that note show how a deadline operates. The revised Schedule M applied from 28 June 2024 to manufacturers with turnover above INR 250 crore and from 28 December 2024 to those at or below that figure, and the only relief the note found, G.S.R. 127(E) of 11 February 2025, gave time to 31 December 2025 on application. That date is now past, so as at 28 October 2026 every licensed manufacturer is bound by the revised Schedule on the note's reading.

The practical questions are then of two kinds. Whether the licence in hand was issued on conditions that include the Schedule. And which State or central authority issued the licence, since the licensing authority is the one that inspects and may suspend or cancel it.