24 January, 2019
The Ministry of Ayurveda, Yoga and Naturopathy, Unani, Siddha and Homeopathy (AYUSH) vide notification G.S.R. 1230(E) on December 21, 2018 has notified the Drugs and Cosmetics (Eleventh Amendment) Rules, 2018 (Amendment) ,which was subsequently published on December 24, 2018[1]. This Amendment seeks to regulate advertisements of Ayurvedic, Unani and Siddha drugs (ASU Drugs) in an attempt to curb misleading advertisements.
This step has been taken in light of the government’s reaction to the recent increase in the number of misleading advertisements relating to ASU Drugs. In 2017, the Ministry of AYUSH stated that it had signed a Memorandum of Understanding (MoU) with the Advertising Standards Council of India (ASCI), a self-regulatory organisation for the advertising industry, to monitor misleading advertisements being published in print and TV media.[2]
In a press release dated February 9, 2018, the Ministry of AYUSH informed the public that it had come across 804 cases of misleading advertisements/claims allegedly of herbal/AYUSH products and services including Ayurvedic medicines between April, 2015 and January, 2018. They were reported by the ASCI and the Grievances Against Misleading Advertisements (GAMA) portal maintained by the Department of Consumer Affairs.[3]
Regulation of ASU Drugs
In India, the Drugs and Cosmetics Act, 1940 (D&C Act) and the Drugs and Cosmetic Rules, 1945 (D&C Rules) regulate the import, manufacture, distribution, sale, packaging and labelling of drugs, including ASU Drugs, and cosmetics. The regulation of advertisements for drugs, arguably including ASU Drugs, is governed by the Drugs and Magic Remedies (Objectionable Advertisements) Act, 1954 (DMROA Act) and the Drugs and Magic Remedies (Objectionable Advertisements) Rules, 1955 (DMROA Rules). ASCI is a body that also looks at this aspect though dependant on self-regulation by industry players.
Drugs and Cosmetics (Eleventh Amendment) Rules, 2018
Prohibition of AdvertisementThe Amendment adds Rule 170(1) to the D&C Rules, prohibiting a manufacturer or his agent from publishing any advertisement relating to the use of ASU drugs for diagnosis, cure, mitigation, treatment or prevention of any disease, disorder, syndrome or condition.[4]
Advance Approval of Advertisements
The Amendment lays down a requirement for a Unique Identification Number (UIN) for advertising any ASU Drug for purposes other than that prohibited under Rule 170(1). Manufacturers of ASU Drugs need to apply to the State Licensing Authority (SLA) for the UIN for the advertisement issued or aired before this notification, within the period of three months from the date of notification of this Amendment.
The application for advertisement can be rejected on multiple grounds including vulgarity or obscenity; or reference to any ASU Drug in terms which suggest or are calculated to lead to the use of that drug or medicine: for the enhancement of height and dimensions or capacity of performance of male or female sexual organs; depiction of photographs or testimonials of celebrities or government officials; reference to any government or autonomous organisation of the government; appearance of a false impression about the true character of the ASU Drug; or misleading or exaggerated claim about the effectiveness of the concerned ASU Drug.
Existing advertisements, which do not fall in the prohibited category, are required to apply for the UIN before April 21, 2019. The SLA has the power to suspend or cancel manufacturing licences if the directions are not followed.[5]
Legal Issues
The Amendment though passed with the intent to protect consumer interests and regulate the AYUSH industry is ridden with legal infirmities, which we discuss below:
a. Power of the Central Government under section 33N of the D&C Act
The Amendment has been passed by the Ministry of AYUSH in exercise of its powers under section 33N of the D&C, which states as follows:
“Section 33N – Power of Central Government to make rules
(1) The Central Government may, after consultation with, or on the recommendation of, the Board and after previous publication by notification in the Official Gazette, make rules for the purpose of giving effect to the provisions of this Chapter.”
Accordingly, the Central Government’s power under section 33N must be exercised with the purpose of giving effect to the provisions of Chapter IVA of the D&C Act, which deals with the regulation of import, manufacture, sale and distribution of drugs and cosmetics including ASU drugs. Advertising of drugs, which is subject matter of regulation under the DMROA Act, lies outside the purview of the said chapter and even outside the ambit of the D&C Act and Rules.
The Amendment, however, seeks to regulate the advertising of drugs that falls under the ambit of the DMROA Act.
b. DMROA Act
The DMROA Act regulates advertising of drugs including ASU drugs. Section 2(b) of the DMROA Act identifies what the said enactment seeks out to regulate i.e:
“‘drug’ includes
(i) a medicine for the internal or external use of human beings or animals;
(ii) any substance intended to be used for or in the diagnosis, cure, mitigation, treatment or prevention of disease in human beings or animals;
(iii) any article, other than food, intended to affect or influence in any way the structure or any organic function of the body of human beings or animals;
(iv) any article intended for use as a component of any medicine, substance or article, referred to in sub-clauses (i), (ii) and (iii);”
It can be argued that Section 2(b) would cover ASU drugs as they too are medicines/ substances intended to be used in the diagnosis, cure, mitigation, treatment or prevention of disease in human beings or animals.
Section 3 of the DMROA Act lays down a prohibition against advertisement of certain drugs for treatment of certain diseases. The section reads as follows:
- “Section 3 – Prohibition of advertisement of certain drugs for treatment of certain diseases and disorders
- Subject to the provisions of this Act, no person shall take any part in the publication of any advertisement referring to any drug in terms which suggest or are calculated to lead to the use of that drug for
a. the procurement of miscarriage in women or prevention of conception in women; or
b. the maintenance or improvement of the capacity of human beings for sexual pleasure; or
c. the correction of menstrual disorder in women; or
d. the diagnosis, cure, mitigation, treatment or prevention of any disease, disorder or condition specified in the Schedule, or any other disease, disorder or condition (by whatsoever name called) which may be specified in the rules made under this Act:
Provided that no such rule shall be made except
i. in respect of any disease, disorder or condition which requires timely treatment in consultation with a registered medical practitioner or for which there are normally no accepted remedies; and
ii. after consultation with the Drugs Technical Advisory Board constituted under the Drugs and Cosmetics Act, 1940, and if the Central Government considers necessary, with such other persons having special knowledge or practical experience in respect of Ayurvedic or Unani systems of medicines as that Government deems fit.”
The DMROA Act already has provisions pertaining to the prohibition of advertising for drugs that claim treatment of certain diseases – these, arguably, apply to ASU drugs as well.
Additionally, the proviso to Section 3 of the DMROA Act states that in case of ASU drugs, the Drugs Technical Advisory Board (DTAB) must be consulted along with persons with special knowledge or practical experience with ASU drugs by the Central Government before making rules under the DMROA Act prohibiting advertisement of any drugs. Therefore, even if an amendment was to be made to the DMROA Act or DMROA Rules under it, the DTAB and persons with specialised knowledge would have to be consulted.
ASU drugs are therefore covered in so far as advertising thereof is concerned. Why then the need for this additional regulation where one exists already?!
c. Fundamental Rights under Article 14 and 19
The Amendment has resulted in an immediate and complete prohibition on advertising by the manufacturers of ASU Drugs while there is no such prohibition for allopathic drugs. The Amendment, as it stands today, is violative of the right to equality guaranteed under Article 14 of the Constitution since it differentiates between allopathic drugs and ASU drugs without any intelligible basis. Further, a complete prohibition against any advertisement is violative of the right to freedom of commercial expression, which has been recognized and protected under Article 19(1)(a). Additionally, the right to practice any profession, or to carry on any occupation, trade or business, which has been guaranteed to such manufacturers, importers, distributors and wholesalers/retailers of ASU drugs under Article 19(1)(a) and 19(1)(g) of the Constitution of India, would also stand violated.
d. Final Rules Different from Draft Rules
The Ministry of AYUSH released draft rules inviting comments and suggestions on a proposed prohibition of advertisements of ASU Drugs vide notification G.S.R. 396 (E) dated April 4, 2016 (Draft Rules). These prohibited publication of any advertisement referring to any ASU Drug that suggest that the use of that drug might lead to diagnosis, cure, mitigation, treatment or prevention of any of the diseases, disorders or conditions in the list. This included an exhaustive list of 37 serious ailments including HIV/AIDS, cancer, deafness, blindness, diabetes mellitus, Parkinson’s Disease and cirrhosis etc.
The Amendment, however, envisages a blanket ban on any advertisement proposing cure, mitigation, diagnosis, treatment or prevention of any disease, disorder or condition.
e. Lack of clarity
The procedures prescribed in Rule 170 lack any clarity in that they require an applicant to essentially submit the same data that has already been submitted to the regulator while applying for a manufacturing, sale or import licence under the D&C Act and Rules. The need to provide the same all over again is not justified. That said, the provisions envision a second review of an already granted approval by the same regulatory body. Reasonableness and justification standards for this legislation are therefore not satisfied.
Key takeaways for the industry would be to understand the implications of this Amendment for advertising its ASU drugs. All existing companies are required to apply for a UIN within three months from date of publication of the Amendment. Such a knee-jerk prohibition is bound to cause disruptions in the ASU drug industry. Additionally, it will be interesting to see the impact of this approach to regulate advertising for drugs under the D&C Act and D&C Rules in India. The industry needs to take a look at their marketing and advertising strategy and make necessary adjustments.
For further information, please contact:
Ashwin Sapra, Partner, Cyril Amarchand Mangaldas
ashwin.sapra@cyrilshroff.com
[1] http://ayush.gov.in/event/prohibition-advertisements-ayurvedic-siddha-or-unani-drugs
[2] http://164.100.47.194/loksabha/questions/QResult15.aspx?qref=57551&lsno=16
[3] http://pib.nic.in/newsite/PrintRelease.aspx?relid=176447
[4] http://ayush.gov.in/event/prohibition-advertisements-ayurvedic-siddha-or-unani-drugs
