Drugs and Cosmetics Act: Complete Guide to Rules, Schedules & Recent Amendments (Updated 2025)
Drugs and Cosmetics Act: Complete Guide to Rules, Schedules & Recent Amendments (Updated 2025)
The Drugs and Cosmetics Act, 1940 and the Drugs and Cosmetics Rules, 1945 form the backbone of pharmaceutical and cosmetic regulation in India. They govern the import, manufacture, distribution, sale, labeling, quality, safety, and efficacy of drugs and cosmetics.
This article is written as a regulatory master guide for:
- Pharmaceutical manufacturers
- Cosmetic manufacturers
- QA / QC professionals
- Regulatory affairs executives
- Auditors & consultants
- Pharmacy owners
- Students of pharmaceutical sciences
It integrates Indian law with global regulatory thinking from WHO, USP, and PDA, ensuring real-world compliance readiness.
1. Background and Objective of the Drugs and Cosmetics Act
Prior to independence, India lacked a uniform system to regulate drug quality. Substandard and spurious drugs posed serious public health risks.
1.1 Enactment History
- Drugs and Cosmetics Act enacted in 1940
- Drugs and Cosmetics Rules notified in 1945
- Continuously amended to align with scientific and regulatory advancements
1.2 Primary Objectives
- Ensure safety, efficacy, and quality of drugs and cosmetics
- Prevent manufacture and sale of substandard or spurious products
- Regulate import and export
- Protect public health
2. Scope and Applicability
The Act applies to:
- Drugs (allopathic, ayurvedic, siddha, unani, biologicals)
- Cosmetics
- Medical devices (now regulated separately but originally under the Act)
2.1 What is Defined as a “Drug”?
As per Section 3(b), a drug includes:
- Medicines for human or animal use
- Substances intended to affect body structure or function
- Bulk drugs (APIs)
- Biological products (vaccines, sera)
2.2 What is a “Cosmetic”?
Any article intended to be rubbed, poured, sprinkled, or applied to the human body for cleansing, beautifying, or altering appearance.
3. Regulatory Authorities Under Drugs and Cosmetics Act
3.1 Central Drugs Standard Control Organization (CDSCO)
CDSCO functions under the Ministry of Health & Family Welfare and acts as the central regulatory authority.
3.2 State Drug Control Departments
- Grant manufacturing and sale licenses
- Conduct inspections
- Take enforcement actions
3.3 Drugs Technical Advisory Board (DTAB)
DTAB advises the government on technical matters related to drugs and cosmetics.
3.4 Drugs Consultative Committee (DCC)
Ensures uniform enforcement across states.
4. Drugs and Cosmetics Rules, 1945
While the Act provides legal authority, the Rules provide operational details.
4.1 Structure of the Rules
- Licensing requirements
- Manufacturing conditions
- Testing and quality standards
- Labeling and packing
- Schedules defining specific requirements
4.2 Importance of Schedules
Schedules are the heart of compliance. Failure to comply with applicable schedules is the most common reason for regulatory action.
5. Licensing Requirements
5.1 Manufacturing License
- Form 25 – Drugs other than Schedule C & C1
- Form 28 – Schedule C & C1 drugs
- Form 32 – Loan license
5.2 Sale License
- Retail sale license
- Wholesale sale license
5.3 Practical Example
During inspection, a manufacturer producing antibiotics without Form 28 license was prosecuted under Section 18(a)(i) for illegal manufacture.
6. Quality Control and Testing
Every licensed manufacturer must have:
- Approved QC laboratory
- Qualified technical staff
- Validated test methods
USP and WHO GMP principles strongly influence Indian regulatory expectations for laboratory controls.
7. Importance of Schedules Under Drugs and Cosmetics Act
Schedules under the Drugs and Cosmetics Rules, 1945 define technical, quality, safety, labeling, testing, and GMP requirements. From a regulatory perspective, most prosecutions and license suspensions arise due to non-compliance with schedules, not the Act itself.
Inspectors evaluate compliance primarily against:
- Applicable Schedule(s)
- Manufacturing license conditions
- Standard operating procedures
- Quality control records
8. Schedule C – Biological and Special Products
Schedule C covers biological and special products that require enhanced controls due to high patient risk.
8.1 Products Covered Under Schedule C
- Vaccines
- Sera
- Toxins and antitoxins
- Insulin
- Blood and blood products
- Recombinant DNA products
8.2 Regulatory Expectations
- Separate manufacturing areas
- Dedicated air handling systems
- Stringent sterility assurance
- Batch release with Central authority oversight
8.3 Practical Inspection Example
During a state FDA inspection, a manufacturer producing insulin without segregated HVAC for filling operations was issued a stop-production order due to Schedule C non-compliance.
9. Schedule C(1) – Other Special Products
Schedule C(1) includes drugs that are not classical biologicals but still require stringent manufacturing and testing controls.
9.1 Products Covered
- Sterile products (injectables)
- Ophthalmic preparations
- Large volume parenterals
- Oral vaccines
9.2 Key Compliance Requirements
- Aseptic processing or terminal sterilization
- Environmental monitoring
- Media fill simulations
- Validated sterilization processes
These requirements align closely with global guidance such as EU GMP Annex 1 and PDA Technical Reports.
10. Schedule M – Good Manufacturing Practices (GMP)
Schedule M is the most critical schedule for pharmaceutical manufacturers. It defines the minimum GMP requirements for facilities, personnel, documentation, equipment, and quality systems.
10.1 Core Elements of Schedule M
| Element | Regulatory Expectation |
|---|---|
| Premises | Designed to prevent cross-contamination |
| Equipment | Qualified, calibrated, and maintained |
| Personnel | Qualified, trained, medically examined |
| Documentation | SOPs, BMRs, logs, change control |
| Quality Control | Independent QC laboratory |
10.2 Schedule M vs WHO-GMP (Practical Mapping)
Indian Schedule M is closely aligned with WHO-GMP principles and partially harmonized with global standards like USP and PDA guidance.
| Schedule M Clause | WHO-GMP / USP Equivalent Concept |
|---|---|
| Documentation | USP Quality Systems |
| Validation | Process validation principles |
| Change Control | PDA Quality Risk Management |
10.3 Common Schedule M Deficiencies (Audit Reality)
- Incomplete batch manufacturing records
- No periodic validation review
- Improper segregation of beta-lactams
- Inadequate HVAC qualification
11. Schedule Q – Standards for Drugs
Schedule Q specifies official pharmacopoeial standards for drugs. Unless otherwise specified, drugs must comply with:
- Indian Pharmacopoeia (IP)
- British Pharmacopoeia (BP)
- United States Pharmacopeia (USP)
11.1 Regulatory Interpretation
If a monograph exists in IP, it is mandatory. USP or BP may be followed only where IP is silent.
11.2 Practical Example
A manufacturer using USP limits for assay when IP monograph existed was cited for Schedule Q violation during inspection.
12. Schedule U – Records and Documentation
Schedule U mandates minimum records to be maintained by manufacturers.
12.1 Mandatory Records
- Batch manufacturing records
- Raw material test records
- Finished product test records
- Distribution records
12.2 Inspection Focus
Inspectors often trace defective batches using Schedule U records. Any missing data is treated as serious GMP violation.
13. Schedule Y – Clinical Trials and New Drugs
Schedule Y governs:
- Approval of new drugs
- Clinical trials in India
- Bioavailability and bioequivalence studies
13.1 Ethical and Regulatory Controls
- Ethics committee approval
- Informed consent
- Adverse event reporting
13.2 Global Alignment
Schedule Y is influenced by ICH guidelines and global ethical principles.
14. Schedule E(1) – ASU Medicines
Schedule E(1) lists toxic substances permitted in ASU medicines under controlled conditions.
14.1 Key Requirements
- Mandatory labeling warnings
- Qualified supervision
- Controlled usage levels
14.2 Practical Example
An Ayurvedic manufacturer failed to declare Schedule E(1) ingredients on label, resulting in product seizure.
15. Integration of USP & PDA Principles
Although USP and PDA are not Indian laws, regulators expect manufacturers supplying regulated markets to align with:
- USP quality system concepts
- PDA contamination control philosophy
- Risk-based GMP implementation
This is especially critical for exporters and WHO-GMP certified facilities.
16. Key Takeaways from PART-2
- Schedules define actual compliance obligations
- Schedule M is the backbone of GMP enforcement
- Schedule Q deviations are common inspection findings
- Biologicals and sterile products attract maximum scrutiny
- Global concepts (USP, PDA) increasingly influence Indian inspections
End of PART-2
17. Regulatory Inspections Under Drugs and Cosmetics Act
Regulatory inspections are the primary enforcement mechanism under the Drugs and Cosmetics Act, 1940. Inspectors are empowered under Section 22 to enter, inspect, search, seize, and investigate drug and cosmetic manufacturing and sale premises.
17.1 Powers of Drug Inspectors
- Inspect manufacturing, testing, storage, and sale premises
- Draw samples for testing
- Examine records and documents
- Seize stocks suspected to be non-compliant
- Launch prosecution with competent authority approval
17.2 Inspection Focus Areas
| Area | Inspection Expectation |
|---|---|
| GMP (Schedule M) | Facility, documentation, validation |
| Quality Control | Testing, OOS handling, data integrity |
| Licensing | Valid license for products and premises |
| Labeling | Compliance with labeling rules |
| Records | Schedule U documentation completeness |
17.3 Practical Inspection Example
During a routine inspection, inspectors identified that batch manufacturing records were filled retrospectively. This was treated as data integrity violation and resulted in suspension of manufacturing license.
18. Prohibited Acts Under the Act
Section 18 of the Drugs and Cosmetics Act lists acts that are strictly prohibited.
18.1 Key Prohibitions
- Manufacture or sale of substandard drugs
- Manufacture or sale of spurious drugs
- Manufacture without valid license
- Sale of drugs not of standard quality
- Misbranded cosmetics
18.2 Regulatory Interpretation
Courts have consistently held that ignorance of GMP or labeling rules is not a valid defense. The responsibility lies entirely with the license holder.
19. Penalties and Punishments
19.1 Classification of Offences
| Offence | Punishment |
|---|---|
| Spurious drugs | Imprisonment up to life + heavy fine |
| Adulterated drugs | Minimum 7 years imprisonment |
| Substandard drugs | Imprisonment + fine |
| Cosmetic violations | Imprisonment + fine |
19.2 Court Case Insight
Indian courts have ruled that quality failure alone is sufficient to attract criminal liability, even without proof of intent.
20. Recent Amendments and Regulatory Updates (2023–2025)
The Drugs and Cosmetics regulatory framework is continuously evolving to address modern challenges.
20.1 Key Recent Developments
- Strengthening of GMP requirements under revised Schedule M
- Risk-based inspections introduced by several state FDAs
- Digital submission of licensing and renewal applications
- Increased focus on data integrity and documentation
20.2 Industry Impact
Manufacturers are expected to adopt global best practices aligned with WHO, USP, and PDA guidance, especially for export-oriented facilities.
21. Cosmetics Rules, 2020 – Regulatory Transformation
The Cosmetics Rules, 2020 replaced older cosmetic provisions and introduced a modern, risk-based framework.
21.1 Key Features
- Online registration through CDSCO portal
- Ingredient safety and restrictions
- Mandatory labeling and safety data
- Inspection and recall mechanisms
21.2 Practical Example
A cosmetic importer failed to update ingredient safety data under Cosmetics Rules, 2020, resulting in product recall.
22. Role of USP, PDA and Global Guidance
While Indian law is primary, regulators increasingly expect alignment with global standards.
- USP principles for quality systems and testing
- PDA guidance on contamination control and data integrity
- WHO GMP for facility and process control
Export-oriented companies are routinely inspected against these expectations.
23. Practical Compliance Roadmap
23.1 For Manufacturers
- Maintain Schedule-wise compliance checklist
- Conduct internal audits quarterly
- Train staff on GMP and data integrity
- Keep validation and qualification current
23.2 For QA & Regulatory Teams
- Monitor regulatory updates
- Ensure documentation integrity
- Prepare inspection-ready systems
24. Frequently Asked Questions (FAQs)
Q1. Is Schedule M mandatory for all drug manufacturers?
Yes. Compliance with Schedule M is mandatory for all licensed pharmaceutical manufacturers.
Q2. Can USP standards be followed instead of IP?
USP may be followed only if IP monograph is not available.
Q3. What is the most common reason for license suspension?
Non-compliance with Schedule M and incomplete documentation.
Q4. Are Cosmetics Rules, 2020 applicable to small manufacturers?
Yes. All cosmetic manufacturers and importers must comply.
Q5. Are criminal penalties applicable without intent?
Yes. Quality failure itself can attract prosecution.
25. Final Conclusion
The Drugs and Cosmetics Act, along with its Rules and Schedules, is a public health protection law, not merely a licensing regulation. Compliance requires deep understanding, continuous vigilance, and alignment with evolving global standards.
Organizations that adopt a proactive, risk-based, and quality-driven approach consistently demonstrate regulatory confidence, inspection success, and long-term sustainability.
Related Topics
EU Annex 1 Expectations
Recent Regulatory Updates in Pharmaceutical Microbiology
Schedule M
💬 About the Author
Siva Sankar is a Pharmaceutical Microbiology Consultant and Auditor with extensive experience in sterility testing, validation, and GMP compliance. He provides consultancy, training, and documentation services for pharmaceutical microbiology and cleanroom practices.
📧 Contact: siva17092@gmail.com
Mobile: 09505626106
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