Regulation of Fixed Dose Combination Drugs: Analysis of Union of India vs. Pfizer Limited Judgment

The case of Union of India vs. Pfizer Limited revolves around the interpretation of Section 26A of the Drugs and Cosmetics Act, 1940, regarding the ban on Fixed Dose Combination (FDC) drugs. The Supreme Court had to determine whether prior consultation with the Drugs Technical Advisory Board (DTAB) was mandatory before the Central Government exercised its power under Section 26A to prohibit certain FDCs.

The Supreme Court ruled that the Central Government could exercise its power under Section 26A without consulting the DTAB, provided it had sufficient relevant material to satisfy itself that the drugs in question posed risks to public health, lacked therapeutic value, or had no therapeutic justification.

Background of the Case

The issue of unregulated FDCs in India was highlighted by the Parliamentary Standing Committee on Health and Family Welfare in its 59th Report in May 2012. The Committee noted that State Licensing Authorities had issued manufacturing licenses for numerous FDCs without prior clearance from the Central Drugs Standard Control Organization (CDSCO). The Committee recommended that such FDCs be withdrawn immediately due to potential health risks.

Following this report, the Ministry of Health issued directions under Section 33P of the Drugs Act to States and Union Territories, instructing them not to grant licenses for FDCs that had not been approved by the Drug Controller General of India (DCG(I)). Manufacturers were asked to prove the safety and efficacy of FDCs licensed before 1st October 2012. In response, the government established expert committees to assess these drugs.

Legal Issue

The main legal issue before the Supreme Court was:

• Whether prior consultation with the DTAB was mandatory before the Central Government could exercise its power under Section 26A to prohibit the manufacture and sale of FDCs.

Arguments by the Appellant (Union of India)

The Union of India, represented by the Additional Solicitor General, contended that:

• Section 26A does not expressly require consultation with the DTAB.
• Several provisions in the Drugs Act specifically mention DTAB consultation, but Section 26A does not, indicating that Parliament did not intend for such consultation to be mandatory.
• The government had set up expert committees to evaluate FDCs, and its decision to ban certain drugs was based on their recommendations.
• Judicial review of decisions taken under Section 26A should be limited, given that they are based on expert reports.

Arguments by the Respondent (Pfizer Limited & Others)

The pharmaceutical companies countered:

• DTAB consultation was essential because it is the primary statutory body advising the government on technical matters related to drug safety.
• Previous court rulings had held that DTAB consultation was necessary before exercising powers under Section 26A.
• The Central Government’s decision to ban 344 FDCs was arbitrary and lacked due process.
• The DTAB is an expert body established under Section 5 of the Drugs Act, and bypassing it would lead to regulatory uncertainty.

Supreme Court’s Observations

The Supreme Court examined Section 26A and held:

“Unlike other provisions of the Drugs Act that explicitly require DTAB consultation, Section 26A does not mandate such consultation. The Central Government can exercise its power under Section 26A based on relevant material, provided its decision is not arbitrary.”

The Court reasoned that the legislative intent behind Section 26A was to allow the government to act swiftly in the public interest without being bound by mandatory consultation requirements. The Court further observed:

“If the Central Government is satisfied, based on expert reports and relevant material, that a drug poses a risk to public health or lacks therapeutic justification, it can prohibit its manufacture and sale without consulting the DTAB.”

Final Judgment

The Supreme Court concluded:

• The government’s power under Section 26A is not contingent on DTAB consultation.
• The government’s satisfaction must be based on relevant material.
• The notifications banning 344 FDCs should be reviewed by the DTAB, considering additional inputs from manufacturers and other stakeholders.
• The DTAB should submit a fresh report to the Central Government within six months, after which the government should make a final decision.

Implications of the Judgment

The Supreme Court’s ruling has significant implications for drug regulation in India:

• The Central Government retains the power to ban drugs without DTAB consultation, provided its decision is based on expert findings.
• Pharmaceutical companies must substantiate the safety and efficacy of FDCs through transparent regulatory processes.
• The DTAB’s role remains advisory, but its recommendations carry weight in judicial scrutiny of government decisions.
• The ruling establishes a framework for future regulatory actions, ensuring that bans on drugs are backed by scientific evidence.

Conclusion

The Supreme Court’s decision in this case clarifies the scope of the government’s regulatory powers under Section 26A of the Drugs Act. It affirms that while DTAB consultation is advisable, it is not mandatory. The ruling underscores the importance of evidence-based decision-making in drug regulation, ensuring that public health interests are prioritized while maintaining procedural fairness for pharmaceutical companies.

Judgment delivered by: R.F. Nariman, Sanjay Kishan Kaul

Don’t miss out on the full details! Download the complete judgment in PDF format below and gain valuable insights instantly!

Download Judgment: Union of India & Anr vs Pfizer Limited & Ors Supreme Court of India Judgment Dated 15-12-2017.pdf

Direct Downlaod Judgment: Direct downlaod this Judgment

See all petitions in Corporate Compliance
See all petitions in unfair trade practices
See all petitions in Company Law
See all petitions in Judgment by Rohinton Fali Nariman
See all petitions in Judgment by Sanjay Kishan Kaul
See all petitions in partially allowed
See all petitions in Remanded
See all petitions in supreme court of India judgments December 2017
See all petitions in 2017 judgments

See all posts in Corporate and Commercial Cases Category
See all allowed petitions in Corporate and Commercial Cases Category
See all Dismissed petitions in Corporate and Commercial Cases Category
See all partially allowed petitions in Corporate and Commercial Cases Category