Drugs Rules, 1945

What it does

The Rules put detail on the Drugs and Cosmetics Act, 1940. The Act prohibits the manufacture, sale and import of drugs except under licence and in accordance with the conditions of the licence. The Rules say how a licence is applied for and granted, what premises, plant and staff are needed, what conditions attach, and what standards the product and the process must meet.

Much of the working content is in the schedules. Schedule M sets out good manufacturing practice and the requirements of premises, plant and equipment for pharmaceutical products. The Rules also deal with labelling, with the testing of drugs, with licences for sale by wholesale and retail, and with clinical matters, all within the powers that sections 12 and 33 of the Act confer on the Central Government.

Who it binds

Manufacturers, importers, distributors and sellers of drugs, through the licences they hold. The duty attaches through the licence. A manufacturing licence under rule 74, 76 or 78 carries a condition that the licensee comply with the requirements of Schedule M, so a manufacturer that does not meet the Schedule is outside the terms on which it may make the product at all. Regulatory authorities, including the Central Drugs Standard Control Organisation and the State licensing authorities, administer the Rules.

What has changed, and when

The Rules have been amended very many times since 1945, and a reader should work from the current consolidated text and the amendment notifications. Three recent instruments concern Schedule M. The Ministry of Health and Family Welfare notified G.S.R. 922(E) on 28 December 2023, which substitutes Schedule M in its entirety and changes the wording of rules 74, 76 and 78 so that a licensee complies with the Schedule's requirements and not with good manufacturing practice alone. The notification went out without a number in its short title. A corrigendum, G.S.R. 666(E) of 25 October 2024, named it the Drugs (Second Amendment) Rules, 2023.

A manufacturer's date to comply depended on turnover. A manufacturer with turnover above INR 250 crore had six months from 28 December 2023, which ended on 28 June 2024. A smaller manufacturer had twelve months, which ended on 28 December 2024. The Drugs Amendment Rules, 2025, G.S.R. 127(E) of 11 February 2025, let a manufacturer with turnover below INR 250 crore apply within three months, in Form A and with a plan of upgradation, for time to 31 December 2025.

What turns on it in practice

The firm's note on the revised Schedule M reaches a plain conclusion. Every manufacturer licensed under rule 74, 76 or 78 has been bound by the revised Schedule since 31 December 2025 at the latest. That is the last date any instrument the firm found gives, and as at the note's date in October 2026 it was more than nine months past. The relief was not automatic. It depended on turnover, on an application in time, and on a plan, so a smaller manufacturer that did not apply by 11 May 2025 had no extension to rely on.

The consequence is a licensing one. Section 18(c) of the Act prohibits manufacture for sale except in accordance with the conditions of a licence, so a failure to meet the Schedule is a failure of the licence condition. For a pharmaceutical client, the questions are whether the plant has been brought up to the Schedule's requirements, whether any extension was properly obtained, and what exposure the licence carries for the period in which it was not met. The Rules do not say which year's turnover decides the size category, and the form annexed to the 2025 notification asks for the turnover of April 2023 to March 2024, which is the closest the instruments come to an answer.