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Impact of Jan Vishwas Act on Food, Drug & Pharmacy Industry

calendar20 Jun, 2024
timeReading Time: 6 Minutes
Impact of Jan Vishwas Act

In a significant legislative development, the Indian Parliament passed the Jan Vishwas (Amendment of Provision) Act, 2023, marking an important moment in Indian law.

The Jan Vishwas Act enacted in August 2023 aims to foster greater confidence in living and conducting business in India. By decriminalizing and rationalizing penalties, it seeks to promote governance based on trust.

The JV Act introduces amendments to 183 provisions spanning 42 laws, including the Drugs and Cosmetic Act of 1940, the Food and Standards Act of 2006, and the Pharmacy Act of 1948. This blog specifically focuses on the amendments specifically impacting the food, cosmetic, and pharmaceutical sectors which have an essential role in meeting the needs of India’s growing population and attracting both entrepreneurs and investors.

Overview of Amendments by JVA in Food, Drug & Pharmacy Law

These amendments reflect India’s commitment to fostering a conducive regulatory environment for industry growth, innovation, and investor confidence. The amendments by the JVA in Foods, Drugs, and Pharmacy Law are stated below in brief:

1- Food Safety and Standards Act of 2006

The Food Safety and Standards Act of 2006 is important for the food industry and potential foreign investors in India. The primary goal of the Food Safety and Standards Act and FSSAI license is to ensure food safety, quality, and consumer protection while fostering industry growth. The act harmonizes regulation with international standards, presenting lucrative opportunities for investment and innovation in India’s diverse food industry.

Key Amendments in the Food Safety and Standards Act of 2006

Key amendments due to the impact of the Jan Vishwas Act include a revision to Sections 59, 61 and 63 of the FSSA, which have rationalized penal provisions to align with global industry standards while addressing current industry needs and inflation. These changes align penalties with global industry norms, addressing industry needs and inflation concerns.

  • Section 59, which deals with the sale, storage, distribution, manufacture or import of unsafe foods, now stipulates a maximum imprisonment term of three months, reduced from six months and an increased fine of Rs 3 lac.
  • Section 61, concerning the submission of false or misleading information, now imposes a maximum penalty of Rs 10 lac, replacing the previous penalty of up to three months’ improvement and a fine of Rs 2 lac.
  • Section 63, which penalized operating without a required license, now solely imposes a maximum fine of Rs 10 lac, eliminating the previous six-month imprisonment term and fine of up to Rs 5 lac. All these amendments aim to update penalties in line with current economic conditions and industry standards.

2- Drugs and Cosmetic Act of 1940

The impact of the Jan Vishwas Act helps to regulate the pharmaceutical and cosmetic sectors in India, which are crucial for public health and economic growth. India attracts global investors due to its robust pharmaceutical manufacturing capabilities.

Key Amendments in Drugs and Cosmetic Act, 1940

The recent amendments to the D&C Act increased penalties for various offences related to drugs and cosmetics. The amendment also modifies Section 27 (d), 27-A (ii), sections 29, 30(2), and 32B, aiming to streamline penalties, attract investments, and meet evolving industry standards while ensuring consumers’ safety remains paramount.

  • Section 29 has been amended to increase the maximum penalty for using a Government analyst’s report for advertising drugs or cosmetics from Rs 5,000 to Rs 1 lac.
  • Section 30 now imposes only a monetary penalty, eliminating imprisonment, for repeated offences under section 29 with a maximum fine of Rs 5 lac.
  • Section 32B, which allows for the compounding of certain offences not publishable by imprisonment, now includes an offence under sections 27 (d) and 27A (ii). This amendment allows these offences to be settled through monetary penalties before or after the prosecution, providing some relief to industry participants while excluding subsequent offences from compounding.

3- Pharmacy Act, 1948

It supports stringent quality controls essential for sustaining India’s pharmaceutical industry competitiveness.

Key Amendments in Pharmacy Act, 1940

The amendments empower regulatory bodies to enforce regulations effectively, enhancing governance and industry sustainability. The Pharmacy Act provisions, including sections 18, 26A, 41, 42, and the introduction of Section 43A, strengthen penalties and streamline adjudication processes, ensuring compliance and fair practices. The act also aims to attract investors, accommodate rising inflation, and streamline provisions according to industry standards while maintaining consumer safety standards.

  • Section 18 states that the central council, with the Central Government’s approval, can now create regulations for holding enquiries and imposing penalties for obstructing an inspector.
  • Section 26A states that the punishment for obtaining an inspector is now limited to a fine of Rs 1 lac, removing the previous option of a fine of Rs 1000 or both or imprisonment for up to 6 months.
  • Section 41 states the penalty for false registration claims which have been increased. The first conviction now carries a fine of up to Rs 1 lac, and subsequent conviction can result in up to three months of imprisonment or a fine of Rs 2 lac or both.
  • Section 42 states that the distribution of prescribed medicine only through registered pharmacists now carries updated penalties such as imprisonment for up to three months or a fine of up to Rs 2 lac or both, replacing the previous penalties of up to six months of imprisonment or a fine of Rs 1000 or both.
  • Section 43A is a new section that has been added for adjudication penalties for violation of Section 26A. The President of the State Council will act as the adjudicating officer to conduct enquiries and impose penalties as prescribed under Section 18. Appeals can be made to the President of the Central Council within 45 days, with resolution achieved within 90 days.

How Will Jan Vishwas Bill Help in the Ease of Doing Business and Living?

The Jan Vishwas Bill, 2023, passed by both houses of Parliament, aims to boost the Ease of Living and doing Business by decriminalizing minor offences across 42 central laws, including those related to pharmaceuticals, media, agriculture, the environment, and industry. The bill also replaces court-imposed fines with administrative penalties, simplifying the judicial process and allowing businesses to operate more freely.

However, this shift has important implications for healthcare, particularly given recent scandals involving medicines from India that have harmed children globally. Risk-based inspection revealed widespread issues in drug manufacturing practices, promoting the Ministry of Health to upgrade its Goods Manufacturing Practices.

Also, by minimizing the risk of imprisonment for minor violations and simplifying the penalty system, the bill creates a more favourable environment for businesses to operate without the constant fear of harsh legal repercussions for minor incidents. This is beneficial for SMEs, and new business entries face significant bureaucratic and legal hurdles.

The Jan Vishwas Bill reduces the violation of drug standards, potentially undermining public safety and harming the regulatory attempts to enforce stringent quality controls.

The Jan Vishwas Bill might push business ventures to give priority to self-compliance with regulations in order to keep penalties at bay. It could encourage many companies to seek CDSCO registration in India.

The bill decriminalized only minor offences to maintain the ease of doing business and living. The government stated that the amendment bill aims to balance the severity of offences with the gravity of prescribed punishments with the shared goal of saving time and cost for both the government and businesses.

Will the JV Bill Help the Manufacturer if Substandard Drugs Escape with a Fine Only?

The Jan Vishwas Bill, 2023, passed by the Lok Sabha, has received attention for its lenient stance on the crime of manufacturing “Not of Standard Quality (NSQ)” drugs. However, less focus has been given to the equally significant impact this legislation will have on the regulation of pharmacies, which plays a crucial role in India’s drug supply chain.

Pharmacies are requested to procure drugs only from licensed distributors and store them properly until they are dispensed to patients with valid prescriptions. To maintain the integrity of the supply chain, pharmacies must keep records of drug purchases and sales.

To dispense drugs, the pharmacies need a trained pharmacist who can accurately interpret prescriptions and provide patients with the correct brand or a more affordable generic version of the prescribed drugs to reduce the incidence of pharmaceutical litigations.

Ideally, pharmacists should also educate patients on how to store and administer the drugs as well as inform them about possible side effects or adverse reactions which are critical responsibilities to maintain the quality of drugs and ensuring the safety of the patients.

So, the Jan Vishwas Bill may provide leniency to manufacturers of Substandard drugs by allowing them to escape with a fine instead of facing criminal proceedings, raising concerns about its impact on public health and safety; on the other hand, one of the amendments has also made to ease of doing business or living which is also to be considered to inspire more individuals to start and growth their businesses.

Conclusion

The Jan Vishwas Act aims to foster a favourable environment for food, drugs, and pharmaceutical businesses in India by both decriminalizing the offences under the drugs and cosmetic regulatory framework and improving regulatory transparency. While the Jan Vishwas Act seeks to enhance ease of doing business and regulatory clarity in the foods, drugs, and pharmaceutical sectors, its impact on public health and safety remains a critical concern. So, to maintain a balance between industry growth with stringent quality, the acts aim to focus on the challenges while fostering investors’ confidence and innovation in India’s healthcare industries.

Frequently Asked Questions

  1. What is the role of the Jan Vishwas Act?

    The role of the act is to convert fines into penalties, eliminating the need for court prosecution to impose sanctions. It also abolishes imprisonment as a penalty for several offences, including all violations.

  2. What is India’s rank in the export of pharmacy products?

    India stands 3rd largest by volume and 13th largest by value in exports of pharmaceutical products.

  3. How does the Jan Vishwas Act impact the food, drugs, and pharmacy industries?

    The JV Act of 2023 aims to reform India’s regulatory framework by decriminalizing minor offences across various sectors, introducing penalties in place of fines for certain violations, and streamlining the regulatory process. It also aims to boost investor confidence.

  4. What implications does the JV Act have on the Ease of doing business in India’s healthcare sectors?

    The Act simplifies regulatory procedures and reduces the risk of imprisonment for minor violations, which benefits SMEs and new businesses entering the healthcare sector.

  5. How does the JV Act impact the D&C Act of 1940?

    The JV Act introduces amendments to enhance penalties for offences related to drugs and cosmetics, aims to ensure consumer safety, and attract investments in the Indian pharmaceutical industry.

Read our article A Guide On CDSCO Guidelines For Medical Devices In India