Drug Regulation

In a Deeply Flawed Judgment, Delhi High Court Quashes Government’s Decision to Ban 344 FDCs


In a judgment that could have far-reaching implications for the safety of large numbers of Indian patients, a single judge of the Delhi High Court quashed the Government’s decision to ban 344 fixed dose combination (FDC) drugs earlier this month.

On 10th March, 2016, the Central Government had prohibited the manufacture, sale and distribution of 344 FDCs, most notably the famous cough syrup Corex, in exercise of the powers conferred upon it by Section 26A of the Drugs and Cosmetics Act, 1940 (“the Act”).

Section 26A, in pertinent part, reads as follows: “if the Central Government is satisfied, that the use of any drug or cosmetic is likely to involve any risk to human beings or animals or that any drug does not have the therapeutic value claimed or purported to be claimed for it or contains ingredients and in such quantity for which there is no therapeutic justification and that in the public interest it is necessary or expedient so to do, then, that Government may, by notification in the Official Gazette, [regulate, restrict or prohibit] the manufacture, sale or distribution of such drug or cosmetic.”

In order to meaningfully critique the judgment, it would be apposite to first explain what an FDC is.
As this article succinctly explains, when two or more active pharmaceutical ingredients are combined in a fixed dose to form a single drug, the resultant drug is called a Fixed Dose Combination or FDC.

Two excellent examples of FDCs, which have been covered on this blog include Ranbaxy’s anti-malarial drug Synriam [combination of arterolane maleate +piperaquine phosphate] and Cipla’s anti-HIV drug called Triomune [a combination of Lamivudine, stavudine and Nevirapine].
An excellent article by Prashant, in which he inter alia discusses the main benefits/risks of using FDCs can be found here.

For the sake of brevity, I will set forth the gravamen of the Court’s holding and briefly delineate the arguments advanced by both sides as regards the main prongs of the Court’s holding. Thereafter, I will set out the reasons on account of which I consider the judgment to be deeply flawed and problematic [long post ahead!]

Consultation with DTAB and DCC:

On 16th September, 2014, the Ministry of Health and Family Welfare set up a committee under the chairmanship of Professor C.K. Kokate in order to determine the safety and efficacy of the FDCs for which the approval of the Drugs Controller General of India (DCGI) was required.
The Committee was, inter alia, tasked with the responsibility of identifying the FDCs in the market that were grossly irrational/unsafe based on such factors as the pharmacokinetic and pharmacodynamic interation and dosage compatibility of the FDCs as compared to the dosage of single ingredients.

After the Committee submitted its report, it was asked to explain its reasons for making adverse remarks against the concerned FDCs.
On the basis of this report, the Government took the decision of banning 344 FDCS.

The Petitioners, led by Pfizer, argued that the report of the Committee could not have formed the basis for the Government’s decision, inasmuch as the Act mandates consultation with the Drugs Technical Advisory Board (DTAB) and the Drugs Consultative Committee (DCC) before the Government arrives at such a decision.

On the other hand, the Union Government argued that a bare perusal of the text of Section 26A makes it clear that consultation with the DTAB and DCC is not a condition precedent to the making of determinations such as the ones impugned. Arguing that the Kokate Committee was fully qualified to make such determinations, they contended that the Committee had arrived at its conclusions after thorough and complete deliberation.

Agreeing with the petitioners, the court held that the consultative procedure outlined in the Drugs Act could not be circumvented by the Government in the manner in which it was done in this case. Notwithstanding the judgment’s needless prolixity, this conclusion of the Court seems to be founded on 4 main reasons.

First, while the text of Section 26A does not mandate consultation with the DTAB or the DCC, the Court held that the reading of the statute as a whole gives rise to the inexorable conclusion that these bodies have to be consulted whenever any decision under the Act is made. Referring to judgments such as Ram Singh versus Union of India and Vincent Panikurlangara versus Union of India, the Court held that it is not permissible for the Government to make its decisions independently or in consultation with external experts when statutory bodies have been specially created for this purpose.

Second, noting that statutory bodies are created with the central goal of ensuring that decisions in the realm of public law are made in as objective and transparent a manner as possible by individuals possessing the requisite competence, the Court held that the very purpose of creating such bodies would stand defeated if it were to sanction the Government’s conduct.
In explicating this conclusion, it relied on judgments such as Centre for PIL versus Union of India and BCCI versus Cricket Association of Bihar which emphasize the importance of preserving the autonomy and efficacy of independent institutions and upholding the values that such institutions espouse.

Third, the Court cited 6 judgments delivered by various High Courts in support of the proposition that the DTAB and DCC play a central role in the decision making process envisaged by Section 26A. On the basis of these judgments, it drew the inference that a decision made under Section 26a without consulting these bodies would be legally untenable.

Finally, the Court cited 3 examples in support of the proposition that the Government cannot make any determination under the statute without consulting the DTAB and the DCC. These are: Declaration of a drug as patent or proprietary medicine u/s 3(h); Section 12, 33 and 33N dealing with the rule-making power of the Central Government; and power to amend the second schedule u/s 16.
Since these decisions cannot be made without consulting these bodies, the Court reasoned that Section 26A must also operate in accordance with the same principle.

Hearing before decision:

The petitioners argued that the Kokate Committee had arrived at its findings without giving them a show cause notice or any meaningful opportunity to be heard.
Further, they contended that the Government’s conclusion was not supported by any scientific evidence. Finally, since all the 344 notifications contained similar language, they argued that the decision was vitiated by non-application of mind and noncompliance with principles of natural justice.

On the other hand, the Government argued that the applicants/registered proprietors of all FDCs against which adverse remarks were made were served with a show cause notice and were given a period of 30 days, later extended to 90 days, to express their views. The Kokate Committee arrived at its findings only after carefully considering all replies and consulting relevant experts.
Further, insofar as the banning of Corex is concerned, the Government argued that Pfizer was served with a show cause notice but chose not to appear despite being fully aware of the fact that the safety and efficacy of its drug was under consideration.
Finally, the Government contended that Section 26A does not make the issuance of a show cause notice a condition precedent to the exercise of the Government’s powers.

Noting that Section 16(2) of the Act makes it mandatory for the Government to issue a show cause notice of 3 months before arriving at its decision as regards the modification of the standards of quality set forth in schedule 2 that all manufactured drugs must comply with, the Court held that it stands to reason that the prohibition of any drugs is also impermissible without issuing show cause notices to the concerned parties.
Characterizing the process adopted by the Government as being ‘haphazard’, the Court quashed the 344 notifications.

Analysis:

While at first blush the line of reasoning adopted by the Court may seem convincing, I would respectfully submit that the judgment is inconsistent with well settled canons of statutory interpretation for 3 reasons.

First, while it is doubtless true that one of the foundational principles of statutory interpretation is that a statute must be read as a whole in its context, it is equally true that principles of statutory interpretation have no application in a situation where the language of the text is clear and unambiguous.
This being the case, the Court’s interpretation of the clear language of Section 26A could not have been coloured by a holistic reading of the statute. Put differently, when nothing in the provision indicates that the Government must consult the DTAB or the DCC before arriving at its conclusion, it is difficult to fathom how the Court could have imported that requirement into the provision.

Second, as Prashant has noted, 5 out of the 6 judgments that the court relied on to buttress its conclusion that consultation with the DTAB and DCC was mandatory did not actually lay down this principle because this issue did not fall for the consideration of the court in those cases. Therefore, the Court’s reliance on these judgments flies in the face of the well settled principle that a judgment is only an authority for what it actually decides.
While a single judge of the Madras High Court did hold in the case of Cipla versus Union of India that consultation with these bodies is mandatory, it has also been held in two other judgments [Macleods Pharmaceuticals versus Union of India and Lundbeck versus Union of India] that such consultation is not mandatory.
Therefore, contrary to what the Court would have us believe, there is no controlling precedent on this issue.

Finally, considering that Section 26A does not require the Government to give a prior hearing to those likely to be impacted by any adverse determination, it was not open to the Court to hold that the petitioners should have been heard because a completely different and unrelated provision of the statute makes prior hearing mandatory.

In conclusion, by virtue of this deeply flawed judgment, the Court has paved the way for the realization of the worst fears of the Standing Committee whose recommendations formed the basis for the Government’s decision to ban these 344 formulations. One only hopes that this judgment will expeditiously be reversed by the Division Bench.

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Rahul Bajaj

Rahul Bajaj is a fourth year law student at the University of Nagpur. His interest in intellectual property law began taking a concrete shape when he pursued Professor William Fisher's online course on copyright law in the second year of law school. Since then, Rahul has worked on a diverse array of IP matters during his internships. He is particularly interested in studying the role of intellectual property law in facilitating access to education.

2 comments.

  1. Dr B R Jagashetty

    I do agree with the certain views of Rahul Bajaj, if not all. However since the judgment is mainly on non-technical grounds and hope GOI / DCGI will appeal and furnish the technical / scientific matter supporting the reason for ban and also if necessary GOI / DCGI may consider to accept to give sufficient time to the concerned manufacturer on each FDC case-by-case basis to give effective date.

    Reply
  2. Anjali

    Well everything said and done…two appeals have been filed by an Intervener against the order of the single judge of Delhi High Court which did away with the ban. The two appeals have been filed against Pfizer- Corex and Abbott- Phensedyl cough syrups. Last hearing was 13 Feb 2017. The silence of the central government has been shocking to asy the least. Appeals are LPA 104/2017 104/2017 LPA 105/2017

    Reply

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