# UNION OF INDIA & ANR. ETC v. BGP PRODUCTS OPERATIONS GMBH AND HAGENE IMMERMATT WEG. & ANR. ETC

- **Citation:** [2019] 11 S.C.R. 170
- **Court:** Supreme Court of India
- **Decided:** 2019-08-22
- **Case number:** Civil Appeal Nos.6588-6591 of 2019
- **Bench:** Abhay Manohar Sapre, Indu Malhotra
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/union-of-india-anr-etc-v-bgp-products-operations-gmbh-and-hagene-immermatt-weg-33033
- **Pages:** 37

## Headnote

Drugs and Cosmetics Act, 1940: s.26-A - Notification dated
27.04.2018 issued under s.26A of the Act by the Ministry of Health
and Family Welfare - Validity of Notification challenged in these
appeals - Impugned Notification restricts the manufacture of
Oxytocin formulations for domestic use, only by public sector
undertakings or companies, to the complete exclusion of the private
sector companies while the manufacture of the drug for export
purposes is kept open to both public and private sector companies
- Held: These appeals raise serious issues having far reaching
implications - The substantial questions of law which arose for
consideration are: Whether a drug included in the National List of
Essential Medicines published under Schedule 1 of the Drugs (Prices
Control) Order, 2013 notified under s.3 of the Essential Commodities
Act, 1955 would be subject to the provisions of s.26A of the Act;
Whether the impugned notification has resulted in creating a
monopoly in favour of public sector companies, to the complete
exclusion of private sector companies, and if so, whether it would
be protected by Art.19(6)(ii) r/w Art.14 of the Constitution; Whether
the classification made by the impugned notification between licensed
public sector and private sector companies, in the manufacture of
the drug Oxytocin for domestic use, would achieve the object and
purpose of preventing the unregulated and illegal use of the drug -
Whether it would be in public interest to restrict the manufacture of
a life-saving drug for domestic use, to a single public sector
undertaking, to the complete exclusion of the private sector
companies, particularly in view of the high maternal mortality rates
in the country; Whether there was relevant and objective material
before the Central Government to form the basis of satisfaction to
 [2019] 11 S.C.R. 1
170
 [2019] 11 S.C.R. 170
A
B
C
D
E
F
G
H
171
exercise the power to prohibit the manufacture of the drug by the
private sector companies for domestic use, under s.26-A of the Act;
Whether the object of curbing the clandestine manufacture and
unregulated use of the drug Oxytocin, which is covered by s.18 of
the Act, can be achieved by taking recourse to s.26-A by imposing
a ban on the manufacture of licensed drugs by private sector
companies; Whether the exercise of power by the Central
Government under s.26-A of the Act is legislative or executive in
nature - Matter is referred to a larger Bench to consider these
questions of law.
Drugs and Cosmetics Act, 1940: s.26-A - Power of Central
Government under - Notification dated 27.04.2018 issued under
s.26-A by the Ministry of Health and Family Welfare - Legality of
Notification - Held: There is no decision so far on issue as to whether
the nature of powers exercised by the Central Government under
s.26-A of the Act is legislative or executive - If the exercise of power
under s.26-A is held as being legislative in nature, the parameters
to examine the legality of the impugned notification would be
different whereas if it is held to be executive in nature, the parameters
would be somewhat different than the former one - The decision
either way on any of these questions will have its far reaching effect
on the rights and health of public at large and especially on the
rights and health of the teenage girls, pregnant females and milching
animals - In effect, it will not be a judgment inter party but it will be
in rem laying down the law on the questions - Public Health
Administration. (Abhay Manohar Sapre, J.)
Referring the matter to larger Bench, the Court
HELD:
Per INDU MALHOTRA, J.
1. The present group of appeals raise serious issues having
far reaching implications. The twin issues which arise for
consideration are on the one hand, the unregulated and
clandestine manufacture of the drug Oxytocin, which is reportedly
misused in milch animals; and on the other hand, the continued
supply of an essential life-saving drug, which is used as the first
line drug f

## Text

_Characters 0–39,921 of 74,198. This is a partial read: ask again with offset=39921 for what follows._

A
B
C
D
E
F
G
H
170
SUPREME COURT REPORTS
[2019] 11 S.C.R.
UNION OF INDIA & ANR. ETC.
v.
BGP PRODUCTS OPERATIONS GMBH AND HAGENE
IMMERMATT WEG. & ANR. ETC.
(Civil Appeal Nos.6588-6591 of 2019)
AUGUST 22, 2019
[ABHAY MANOHAR SAPRE AND
INDU MALHOTRA, JJ.]
Drugs and Cosmetics Act, 1940: s.26-A - Notification dated
27.04.2018 issued under s.26A of the Act by the Ministry of Health
and Family Welfare - Validity of Notification challenged in these
appeals - Impugned Notification restricts the manufacture of
Oxytocin formulations for domestic use, only by public sector
undertakings or companies, to the complete exclusion of the private
sector companies while the manufacture of the drug for export
purposes is kept open to both public and private sector companies
- Held: These appeals raise serious issues having far reaching
implications - The substantial questions of law which arose for
consideration are: Whether a drug included in the National List of
Essential Medicines published under Schedule 1 of the Drugs (Prices
Control) Order, 2013 notified under s.3 of the Essential Commodities
Act, 1955 would be subject to the provisions of s.26A of the Act;
Whether the impugned notification has resulted in creating a
monopoly in favour of public sector companies, to the complete
exclusion of private sector companies, and if so, whether it would
be protected by Art.19(6)(ii) r/w Art.14 of the Constitution; Whether
the classification made by the impugned notification between licensed
public sector and private sector companies, in the manufacture of
the drug Oxytocin for domestic use, would achieve the object and
purpose of preventing the unregulated and illegal use of the drug -
Whether it would be in public interest to restrict the manufacture of
a life-saving drug for domestic use, to a single public sector
undertaking, to the complete exclusion of the private sector
companies, particularly in view of the high maternal mortality rates
in the country; Whether there was relevant and objective material
before the Central Government to form the basis of satisfaction to
 [2019] 11 S.C.R. 1
170
 [2019] 11 S.C.R. 170
A
B
C
D
E
F
G
H
171
exercise the power to prohibit the manufacture of the drug by the
private sector companies for domestic use, under s.26-A of the Act;
Whether the object of curbing the clandestine manufacture and
unregulated use of the drug Oxytocin, which is covered by s.18 of
the Act, can be achieved by taking recourse to s.26-A by imposing
a ban on the manufacture of licensed drugs by private sector
companies; Whether the exercise of power by the Central
Government under s.26-A of the Act is legislative or executive in
nature - Matter is referred to a larger Bench to consider these
questions of law.
Drugs and Cosmetics Act, 1940: s.26-A - Power of Central
Government under - Notification dated 27.04.2018 issued under
s.26-A by the Ministry of Health and Family Welfare - Legality of
Notification - Held: There is no decision so far on issue as to whether
the nature of powers exercised by the Central Government under
s.26-A of the Act is legislative or executive - If the exercise of power
under s.26-A is held as being legislative in nature, the parameters
to examine the legality of the impugned notification would be
different whereas if it is held to be executive in nature, the parameters
would be somewhat different than the former one - The decision
either way on any of these questions will have its far reaching effect
on the rights and health of public at large and especially on the
rights and health of the teenage girls, pregnant females and milching
animals - In effect, it will not be a judgment inter party but it will be
in rem laying down the law on the questions - Public Health
Administration. (Abhay Manohar Sapre, J.)
Referring the matter to larger Bench, the Court
HELD:
Per INDU MALHOTRA, J.
1. The present group of appeals raise serious issues having
far reaching implications. The twin issues which arise for
consideration are on the one hand, the unregulated and
clandestine manufacture of the drug Oxytocin, which is reportedly
misused in milch animals; and on the other hand, the continued
supply of an essential life-saving drug, which is used as the first
line drug for prevention and treatment of post-partum
haemorrhage at the time of childbirth. The following substantial
UNION OF INDIA v. BGP PRODUCTS OPERATIONS GMBH AND HAGENE
IMMERMATT WEG.
A
B
C
D
E
F
G
H
172
SUPREME COURT REPORTS
[2019] 11 S.C.R.
questions of law arose for consideration: Whether a drug
included in the National List of Essential Medicines published
under Schedule 1 of the Drugs (Prices Control) Order, 2013
notified under Section 3 of the Essential Commodities Act, 1955
would be subject to the provisions of Section 26A of the Drugs
and Cosmetics Act, 1940? Whether the impugned notification
has resulted in creating a monopoly in favour of public sector
companies, to the complete exclusion of private sector
companies, and if so, whether it would be protected by Article
19(6)(ii) read with Article 14 of the Constitution? Whether the
classification made by the impugned notification between licensed
public sector and private sector companies, in the manufacture
of the drug Oxytocin for domestic use, would achieve the object
and purpose of preventing the unregulated and illegal use of the
drug? Whether it would be in public interest to restrict the
manufacture of a life-saving drug for domestic use, to a single
public sector undertaking, to the complete exclusion of the private
sector companies, particularly in view of the high maternal
mortality rates in the country? Whether there was relevant and
objective material before the Central Government to form the
basis of satisfaction to exercise the power to prohibit the
manufacture of the drug by the private sector companies for
domestic use, under Section 26A of the Drugs and Cosmetics
Act, 1940? Whether the object of curbing the clandestine
manufacture and unregulated use of the drug Oxytocin, which is
covered by Section 18 of the Drugs and Cosmetics Act, 1940,
can be achieved by taking recourse to Section 26A by imposing a
ban on the manufacture of licensed drugs by private sector
companies? Whether the exercise of power by the Central
Government under Section 26A of the Drugs and Cosmetics Act,
1940 is legislative or executive in nature? This is a fit case to
refer the matter to a larger Bench of three Judges to consider
these questions of law. [Paras 12, 13] [204-B-H; 205-A-C]
Narang Medical Store v. Union of India [W.P.(C) No.
7135/2014] ; Akadasi Pradhan v. State of Orissa AIR
1963 SC 1047 : [1963] Supp (2) SCR 691 ; State of
T.N. v. P. Krishnamurthy (2006) 4 SCC 517 : [2006] 3
SCR 396 ; UOI v. Cynamide India Pvt. Ltd. 1987 (2)
SCC 720 : [1987] 2 SCR 841 ; E Merck (India) Limited
A
B
C
D
E
F
G
H
173
v. UOI 2001 (90) DLT 16 ; Macleods Pharmaceuticals
Limited v. UOI 2012 SCC Online Mad 1735 ; Drug
Controller General of India v. West Bengal Small Scale
Manufacturers AIR 2000 Cal 133 ;
Uni-San
Pharmaceuticals Ltd.& Anr. v. UOI AIR 2002 Ker 72 :
(2001) 1 KLJ 822 ; Union of India v. Pfizer Ltd.(2018)
2 SCC 39 : [2017] 12 SCR 179 ; Khoday Distilleries
Ltd. v. State of Karnataka (1996) 10 SCC 304 : [1995]
6 Suppl. SCR 759 ; Shimnit Utsch India (P) Ltd. v.
West Bengal Transport Infrastructure Development Ltd.
& Ors. (2010) 6 SCC 303 : [2010] 6 SCR 1110 ;
Directorate of Film Festivals v. Gaurav Ashwin Jain &
Ors. (2007) 4 SCC 737 : [2007] 5 SCR 7 ; Academy of
Nutrition Improvement v. Union of India (2011) 8 SCC
274 : [2011] 8 SCR 680 ; Vincent Panikurlangara v.
Union of India (1987) 2 SCC 165 : [1987] 2 SCR 468
; Systopic Laboratories v. Dr. Prem Gupta (1994) Suppl.
1 SCC 160 : [1993] 2 Suppl. SCR 385 ; Akadasi
Pradhan v. State of Orissa [1963] Supp 2 SCR 691 :
AIR 1963 SC 1047 Khoday Distilleries Ltd. v. State of
Karnataka (1995) 1 SCC 574 : [1994] 4 Suppl. SCR
477 ; Daruka & Co v. Union of India & Ors. (1973) 2
SCC 617 : [1974] 1 SCR 570 ; Indian Drugs &
Pharmaceuticals Ltd. v. Punjab Drugs Manufacturers
Assn. (1999) 6 SCC 247 ; Municipal Committee,
Amritsar v. State of Punjab (1966) 1 SCC 475 : [1969]
3 SCR 447 ; Court On Its Own Motion v. State of
Himachal Pradesh CWPIL No. 16 of 2014 Rai Sahab
Ram Jawaya Kapur & Ors. v. State of Punjab [1955] 2
SCR 225 - referred to.
Per ABHAY MANOHAR SAPRE, J. (Concurring)
1. Having regard to the nature of controversy and the
myriad issues, which arose in these appeals, they have far reaching
consequences on the rights of the citizens qua State and, in
particular, the abstract legal issues such as what is the nature of
powers exercised by the Central Government under Section 26A of the Drugs and Cosmetics Act, whether it is legislative or
executive, because there is no decision of this Court so far on
UNION OF INDIA v. BGP PRODUCTS OPERATIONS GMBH AND HAGENE
IMMERMATT WEG.
A
B
C
D
E
F
G
H
174
SUPREME COURT REPORTS
[2019] 11 S.C.R.
this issue. Secondly, what are the essential ingredients for
invoking the powers under Section 26-A of the Drugs and
Cosmetics Act in relation to any Drug and whether such power is
in conflict with the exercise of powers conferred under the
Essential Commodities Act. Thirdly, whether issuance of
impugned notification has resulted in creating monopoly (whether
partial or full) in favour of the State and, if so, whether it has
satisfied the rigor of Article 14 read with Article 19(6)(ii) of the
Constitution of India. Lastly, depending upon the answer to the
nature of exercise of powers under Section 26-A of the Drugs
and Cosmetics Act, whether material relied on by the Central
Government can be held as sufficient to sustain the impugned
action. [Paras 3-6] [205-F-H; 206-A-B]
Union of India vs Pfizer Ltd.(2018) 2 SCC 39 : [2017]
12 SCR 179 - relied on
2. If the exercise of power under Section 26-A of the Drugs
and Cosmetics Act is held as being legislative in nature, the
parameters to examine the legality of the impugned notification
would be different whereas if it is held to be executive in nature,
the parameters to examine the legality of impugned notification
would be somewhat different than the former one. The decision
either way on any of these questions will have its far reaching
effect on the rights and health of public at large and especially on
the rights and health of the teenage girls, pregnant females and
milching animals. It will also decide the scope of the powers of
the Central Government under Section 26-A of the Drugs and
Cosmetics Act qua the rights of the persons, who are engaged in
business of manufacture and sale of Drugs specified under the
Drugs and Cosmetics Act read with Essential Commodities Act.
In effect, it will not be a judgment inter party but it will be in rem
laying down the law on the questions. [Paras 7-9] [206-C-E]
Case Law Reference
Per Indu Malhotra, J.
[1963] Supp (2) SCR 691
referred to
Para 10.2
[2006] 3 SCR 396
referred to
Para 10.2
A
B
C
D
E
F
G
H
175
[1987] 2 SCR 841
referred to
Para 10.2
2001 (90) DLT 16
referred to
Para 10.2
AIR 2000 Cal 133
referred to
Para 10.2
AIR 2002 Ker 72
referred to
Para 10.2
[2017] 12 SCR 179
referred to
Para 10.3
[1995] 6 Suppl. SCR 759
referred to
Para 10.3
[2010] 6 SCR 1110
referred to
Para 10.3
[2007] 5 SCR 7
referred to
Para 10.3
[2011] 8 SCR 680
referred to
Para 10.3
[1987] 2 SCR 468
referred to
Para 10.3
[1993] 2 Suppl. SCR 385
referred to
Para 10.3
[1963] Supp 2 SCR 691
referred to
Para 10.7
[1994] 4 Suppl. SCR 477
referred to
Para 10.7
[1974] 1 SCR 570
referred to
Para 10.7
(1999) 6 SCC 247
referred to
Para 10.7
[1969] 3 SCR 447
referred to
Para 10.7
 [1955] 2 SCR 225
referred to
Para 11.10
Per Abhay Manohar Sapre, J.
[2017] 12 SCR 179
relied on
Para 3
CIVIL APPELLATE JURISDICTION : Civil Appeal Nos. 65886591 OF 2019.
From the Judgment and Order dated 14.12.2018 of the High
Court of Delhi at New Delhi in W.P. (C) No. 6084 of 2018 connected
with W.P.(C) Nos. 8555, 8666 and 9601 of 2018
Tushar Mehta, SG, Vikramjit Banerjee, ASG, Kapil Sibal, S. Ganesh,
Colin Gonsalves, Ms. Meenakshi Arora, Sr. Advs., Kanu Agrawal,
Ms.Seema Bengani, Rishi Sharma, Ms. Swati Ghildiyal, B. K. Satija,
Anas Zaidi, Rishi Kant Singh, Ayush Anand, G. S. Makker, Ms. Gayatri
Roy, Ms. Soumili Das, Amit Panigrahi, Raghav Tankha, Pratyush Pandey,
Ms. Anushka Sachdev, Anuj Bhandari, Phiroze Palkhivala, Ravikesh K.
UNION OF INDIA v. BGP PRODUCTS OPERATIONS GMBH AND HAGENE
IMMERMATT WEG.
A
B
C
D
E
F
G
H
176
SUPREME COURT REPORTS
[2019] 11 S.C.R.
Sinha, Abhijat P. Medh, Shashi Kant, Ms.Tanya Agarwal, Satya Mitra,
Amit Karkhanis, Kapil Joshi, Ms. Manju Sharma, Jetley, M/s KNC, Ashish
Prasad, Ms. Mukta Dutta, Akshay Nagarajan, Rohan Roy, Mahfooz A
Nazki, Rajesh R., M. P. Devanath, Abhishek Agarwal, Advs., for the
appearing parties.
The Judgments of the Court were delivered by
INDU MALHOTRA, J.
Leave granted.
1. The issue which arises for consideration in the present appeals
is the validity of the Notification dated 27.04.2018 issued under Section
26A of the Drugs and Cosmetics Act, 1940 (hereinafter referred to as
the "Act") by the Ministry of Health and Family Welfare.
The impugned notification restricts the manufacture of Oxytocin
formulations for domestic use, only by public sector undertakings or
companies, to the complete exclusion of the private sector companies.
However, the manufacture of the drug for export purposes is open to
both public and private sector companies.
It was notified that the notification would come into force on
01.07.18.
By a subsequent notification dated 29.06.2018, the date was
extended to 01.09.18.
2. Till the issuance of the impugned notification, Oxytocin was
being manufactured by private sector companies to meet the entire need
in the country.
After the issuance of the impugned notification, Karnataka
Antibiotics & Pharmaceuticals Ltd. ("KAPL"), a public sector company
has commenced the manufacture of Oxytocin in May 2018.
3. The Active Pharmaceutical Ingredient ("API") or the bulk drug
is manufactured in India only by one private sector company in India,
viz. Hemmo Pharmaceuticals Pvt Ltd. ("Hemmo Pharma").
4. The impugned Notification dated 27.04.2018 was challenged in
a group of Writ Petitions by various private sector companies who are
inter alia manufacturing the drug Oxytocin in W.P.(C) No. 6084/2018,
A
B
C
D
E
F
G
H
177
W.P.(C) No. 8555/2018, W.P.(C) No. 8666/2018 and W.P.(C) No. 9601/
2018 before the Delhi High Court on various grounds. The Delhi High
Court granted stay of the operation of the impugned notification vide
Interim Order dated 31.08.2018. The order of stay was extended by
subsequent Orders, which remained in force till 15.12.2018. The Delhi
High Court vide a detailed Judgment and Order dated 14.12.2018 has
quashed the impugned notification. As a consequence, the impugned
notification did not come into force at all.
5. The Appellant-Union of India has filed the present Special Leave
Petitions before this Court, to challenge the judgment passed by the
Delhi High Court.
6. The subject matter of the present appeals is the drug Oxytocin,
which is notified as an essential drug by the World Health Organization
(WHO) Model List of Essential Medicines since 2002. The concept of
"Essential Medicines" was first introduced by the WHO in 1977, and
has now been adopted by many countries, NGOs and international nonprofit supply agencies. Oxytocin continues to be notified in the 21st edition
of the WHO Model List of Essential Medicines published in 2019. It is
listed under the head "Medicines For Reproductive Health And Perinatal
Care" and the recommended form of dosage is "Injection: 10 IU in 1mL".
6.1.
Oxytocin is an essential life-saving drug, which is included
in the National List of Essential Medicines, 2011 ("NLEM").
It continues to be listed at S.No. 26.1.5 in the latest
notification published in 2015. The NLEM is published under
the 1st Schedule to the Drugs (Prices) Control Order, 2013
("DPCO") under Section 3 of the Essential Commodities
Act, 1955 ("EC Act").
The NLEM specifies the recommended dosage and
strength of Oxytocin injection as 5IU per 1 ml and 10IU
per 1 ml. Oxytocin injection in the form of "5 IU per ml in
1ml ampoule pack" is included in the "Essential Drug List
for the year 2016-2018" at Serial No. 228 published by the
National Health Mission, Department of Health and Family
Welfare, Government of Himachal Pradesh.
UNION OF INDIA v. BGP PRODUCTS OPERATIONS GMBH AND HAGENE
IMMERMATT WEG. [INDU MALHOTRA, J.]
A
B
C
D
E
F
G
H
178
SUPREME COURT REPORTS
[2019] 11 S.C.R.
6.2.
The objective of the National List of Essential Medicines
(NLEM) is that the drugs included in it are adequate to
meet the contemporary health needs of the general
population of the country.1 It is one of the key instruments
in balanced healthcare delivery system of a country. The
first NLEM was prepared and released in 1996. This list
was subsequently revised in 2003, 2011 and 2015.
NLEM contains those essential medicines "that satisfy
the primary health needs of the country's population."
NLEM medicines are required to be made available at all
times in adequate quantities in the appropriate dosage forms
to serve the larger public interest. The primary purpose of
the NLEM is to promote rational use of medicines
considering three important aspects i.e cost, safety and
efficacy. The list is considered to include the most costeffective medicines for a particular indication.
The criteria for the inclusion of a medicine in the NLEM
inter alia includes that the medicine should be approved/
licensed in India; the medicine should have proven efficacy
and safety profile based on valid scientific evidence; the
medicine should be cost effective etc.2
The NLEM is prepared by an Expert Core Committee
constituted by the Director General of Health Services
(DGHS) out of the World Health Organization (WHO)
Model List of Essential Medicines, Essential Drugs Lists
of various States, and medicines used in various National
Health Programmes and Emergency Care Drugs.3
1 Press Release on "Essential Drugs" dated 15.03.2013 by the Press Information Bureau,
Government of India, Ministry of Health and Family Welfare.
2 Executive Summary, Report of the Core Committee for Revision of the National List
of Essential Medicines published in 2015.
3 Paragraph 3.1(ii) of the National Pharmaceuticals Pricing Policy, 2012 (NPPP-2012)
dated 07.12.12 published by the Ministry of Chemicals and Fertilizers, Government of
India
A
B
C
D
E
F
G
H
179
6.3.
Oxytocin is recommended as the first line drug for prevention
and treatment of post-partum haemorrhage (excess bleeding
immediately after child-birth).4 Oxytocin is the drug of
choice used for pregnant women to induce or augment labour
at the time of delivery, to control post-partum bleeding and
uterine hypo-tonicity and is placed under Schedule H1 of
the said Act.5 Oxytocin is also included in the Indian
Pharmacopoeia published in 2010, 2014, and 2018.
6.4.
The misuse of Oxytocin has been the subject matter of
discussion because of rampant misuse of the drug on milch
animals. The issue was under deliberation by the Drugs
Technical Advisory Board ("DTAB") and the Drugs
Consultative Committee ("DCC"), which are statutory
bodies constituted under the said Act.
The DTAB is a statutory body established under Section
5 of the said Act. The DTAB consists of technical experts
to advise the Central Government and State Governments
on technical issues arising under the said Act.
The DCC has been constituted under Section 7 of the
said Act, which consists of representatives of the Central
Government, and one representative of each of the State
Governments to advise the Central and State Governments,
and the DTAB, on any matter relating to secure uniformity
in the administration of the Act.
6.5.
The deliberations on the issue of rampant misuse of the
drug commenced from 1997 onwards.
It is necessary to advert to the deliberations of the
meetings of these statutory bodies to understand the
background in which the impugned notification was passed.
6.6.
The misuse of Oxytocin came up for discussion first in the
31st meeting of the DCC held on 21.08.1997 and 22.08.1997.
4 World Health Organisation Recommendations For The Prevention And Treatment Of
Postpartum Haemorrhage, 2012
5 Fifty-Ninth Report Of Parliamentary Standing Committee On Health And Family
Welfare On The Functioning Of Central Drugs Standard Control Organization
UNION OF INDIA v. BGP PRODUCTS OPERATIONS GMBH AND HAGENE
IMMERMATT WEG. [INDU MALHOTRA, J.]
A
B
C
D
E
F
G
H
180
SUPREME COURT REPORTS
[2019] 11 S.C.R.
The DCC noted that it had received several complaints
on the misuse/abuse of Oxytocin in veterinary practice.
Oxytocin injections were being misused to artificially extract
milk from cows and buffaloes. The members of the
Committee were requested to collect more information on
the issue.
6.7.
At the 48th meeting of the DTAB held on 08.07.1999, the
DTAB discussed the misuse of Oxytocin in milch animals
and the deleterious effects due to consumption of such milk
on consumers. The DTAB considered the suggestion of
imposing a general ban on the manufacture of Oxytocin.
However, 11 members opined that as the drug is "essential"
in the medical field, and is included in the "Essential Drug
list", the same could not be prohibited.
The Joint Secretary, Ministry of Food Processing, an
invitee to the meeting mooted a suggestion that "perhaps
restricting the manufacture of Oxytocin to PSUs, and
thereafter keeping a track on its distribution" may be
considered.
The representative of the Department of Consumer
Affairs agreed that the whole issue of use and misuse of
Oxytocin injection requires an in-depth examination and
suggested that a detailed paper be prepared based on the
outcome of such study.
6.8.
At the 36st meeting of the DCC held on 23.07.05 and
24.07.05, the DCC advised not to ban Oxytocin injection
since it formed a part of the NLEM. The DCC noted that
the sale of Oxytocin had been regulated by amending the
package size of Oxytocin to "single blister packs", as against
the earlier prescribed larger packaging of 50-100 ampoules.
6.9.
At the 40th Meeting of the DCC held on 29.06.2009, it was
observed that the misuse of Oxytocin injection had been
reported in many parts of the country, and a strong vigilance
was required to stop the clandestine manufacture of the
drug. The DCC observed that the drug has a definite place
in medical treatment, and is used by gynaecologists
universally. The DCC urged the members/representatives
A
B
C
D
E
F
G
H
181
of each State to ensure that the clandestine manufacture
of the drug under their jurisdiction is curbed through
extensive surveys and raids.
6.10. At the 43rd meeting of the DCC held on 14.11.2011, the
DCC observed that there was an increasing misuse of the
drug by dairy owners, because of the clandestine supply of
the drug through illegal channels, and recommended that
its misuse can only be curbed through increased
surveillance.
6.11. At the 44th meeting held on 20.07.2012, the DCC noted the
importance of continuous surveillance to stop the misuse of
the Oxytocin. After deliberations, it was agreed that diversion
of the bulk drug to illegal channels could be curtailed to a
large extent, if it was ensured that the bulk drug is sold to
licensed manufacturers only.
6.12. On 12.11.2013, the DCC convened its 46th meeting, wherein
the misuse of oxytocin injections to milch animals came up
for further discussion.
After deliberations, the DCC recommended that the
manufacture and sale of Oxytocin injections should be
banned for veterinary use under Section 26A of the Act
coupled with the condition that the manufacturers of the
bulk drug Oxytocin should supply the Active Pharmaceutical
Ingredient ("API") only to licensed manufacturers of
Oxytocin formulations for human use.
6.13. At the 65th meeting of the DTAB held on 25.11.2013, the
misuse of Oxytocin by dairy owners to extract milk from
milch animals and its harmful effects on animals and human
consumption was deliberated upon. While acknowledging
that Oxytocin had proven medical use for inducing labour,
and to control post-partum bleeding and uterine hypotonicity,
the DTAB recognized the abundant availability and use of
the drug in a clandestine manner, which was a matter of
great concern for public health. In spite of the action taken
by the authorities to place the drug under Schedule H of
the Drugs & Cosmetics Rules, 1945, which requires the
drug to be dispensed only on the prescription of a Registered
UNION OF INDIA v. BGP PRODUCTS OPERATIONS GMBH AND HAGENE
IMMERMATT WEG. [INDU MALHOTRA, J.]
A
B
C
D
E
F
G
H
182
SUPREME COURT REPORTS
[2019] 11 S.C.R.
Medical Practitioner, the manufacture and sale of the drug
in a clandestine manner in large quantities, and its misuse
by the farmers or dairy owners was rampant.
The opinion of the Department of Animal Husbandry,
Dairying and Fisheries, Ministry of Agriculture, was sought
with respect to the proposal for banning Oxytocin for Animal
use. It was opined that ban on the production and use of
Oxytocin for veterinary purposes, was not recommended,
since the drug has therapeutic application in case of expulsion
of foetus, and retention of placenta even in animals.
After deliberations, the DTAB noted that since the drug
has a definite use for therapeutic purposes, it need not be
prohibited. It was, however, opined that the manufacturer
of the bulk drug should supply the API only to licensed
manufacturers of the drug and veterinary hospitals. It was
further recommended that the State Drugs Controllers be
asked to curb the misuse of the drug through increased
surveillance and raids conducted on the possible hideouts
of clandestine manufacture and sale of the drug, and take
strict action against the offenders.
6.14. Pursuant to the recommendations made by the DTAB in
the 65th meeting, the Ministry of Health and Family Welfare
issued a Notification G.S.R 29(E) dated 17.01.2014
restricting the manufacture and sale of Oxytocin as under:
"Whereas the Central Government is satisfied that
the drug Oxytocin has a definite therapeutic use in
certain medical conditions;
And whereas the Central Government is satisfied that
it is necessary and expedient to regulate and restrict
the manufacture, sale and distribution of the said drug
in the country to prevent its misuse in public interest.
Now, therefore, in exercise of the powers conferred
by Section 26A of the Drugs and Cosmetics Act, 1940
(23 of 1940), the Central Government hereby directs
that the drug oxytocin shall be manufactured for sale
or for distribution or sold in the manner specified
A
B
C
D
E
F
G
H
183
below, in addition to the provisions contained in the
said Act and Rules made thereunder, namely: -
1. The manufacturers of bulk oxytocin drug shall
supply the active pharmaceutical drug only to the
manufacturers licensed under the Drugs and
Cosmetics Rules, 1945 for manufacture of
formulations of the said drug.
2. The formulations meant for veterinary use shall
be sold to the veterinary hospitals only."
(emphasis supplied)
6.15. The validity of the aforesaid Notification dated 17.01.2014
was challenged before the Punjab & Haryana High Court
in Narang Medical Store v. Union of India [W.P.(C) No.
7135/2014], inter alia on the ground that it was not in
consonance with the provisions of Section 26A of the Act.
The High Court vide judgment and order dated 28.01.2016,
upheld the validity of the Notification, to avoid the misuse
of the bulk drug or Active Pharmaceutical Ingredient used
in Oxytocin injections.
6.16. At the 67th meeting of the DTAB held on 01.04.14, the
DTAB once again recognized that the drug Oxytocin has a
definite role in the medical field for both humans and animals,
and as such the legitimate manufacture and sale of the drugs
cannot be stopped by banning the drug. Even if the domestic
manufacturers are prohibited from manufacturing the drug,
the bulk drug is liable to be smuggled from the neighbouring
countries for illegal use. Misuse can only be contained by
enhanced surveillance by the regulatory authorities, followed
by strict action against the violators.
After deliberations, the DTAB recommended that at
the time of sale of oxytocin by retail chemists, the name
and address of the purchaser, the name of the patient, and
the quantity supplied shall be recorded. Such records shall
be maintained for three years, and shall be kept open for
inspection. This would help in not only maintaining the
legitimate supply of the drug, but also to curb misuse of the
drug through the legitimate sale channels.
UNION OF INDIA v. BGP PRODUCTS OPERATIONS GMBH AND HAGENE
IMMERMATT WEG. [INDU MALHOTRA, J.]
A
B
C
D
E
F
G
H
184
SUPREME COURT REPORTS
[2019] 11 S.C.R.
6.17. The recommendations of DTAB came to be given statutory
effect by an amendment to Rule 65 of the Drugs and
Cosmetics Rules,1945 vide Notification dated 30th August
2013 published by the Ministry of Health and Family
Welfare.
6.18. On 05.11.2014, a meeting was convened by the Minister
for Women and Child Development Ministry (MWCD),
which was attended by Secretaries from various other
Ministries. In this meeting, a suggestion was mooted that
on account of the rampant misuse of Oxytocin, which led
to cows and animals contracting diseases, and the illegal
use for increasing milk production, could be effectively
controlled if a "Government of India owned company
may be allowed for production of this drug in the
country and the private companies may be prohibited
for the same."
6.19. At the 69th DTAB meeting held on 22.04.15, the DTAB
reiterated its earlier recommendation that Oxytocin "need
not be prohibited as it has definite use for therapeutic
purposes. Shri A. K. Tiwari of IVRI stated that the drug
oxytocin is an essential drug in the veterinary practice.
He added that the Department of animal husbandry had
also earlier given his opinion that the ban on production
and use of oxytocin for veterinary used is not
recommended." The DTAB observed that the misuse of
the drug can be controlled by stricter control over the
manufacture and sale of the drug, especially through
clandestine channels. The DTAB noted that "Constant
surveillance by the State Drug Regulatory Authorities
and other regulatory authorities can only curb the
misuse of the drug."
6.20. In its 70th meeting dated 18.08.15, the DTAB was informed
that dairy owners were getting the drug manufactured at
dubious premises from unscrupulous suppliers. The DTAB
noted that the raw material or the bulk drug was being
clandestinely smuggled into the country from the border
States, which was then being crudely manufactured
clandestinely and sold to dairy owners at a very cheap rate.
A
B
C
D
E
F
G
H
185
The DTAB reiterated its recommendation that "the drug
legitimately manufactured is required for medical
purposes and as such cannot be prohibited. The misuse
of the drug in a crude form, can only be curbed through
constant surveillance by the Regulatory Authorities."
6.21. On 16.10.2015, the DCC in its 49th Meeting discussed the
rampant misuse of Oxytocin through clandestine channels.
It was inter alia recommended that officials from the State
Drug Regulatory Authority must conduct periodic raids with
the assistance of the Police at suspected outlets; and that
the manufacture and sale of oxytocin formulations by the
licenced manufacturers in the State, should be monitored
regularly.
6.22. On 12.02.2018, the DTAB in its 78th meeting considered
the proposal to restrict the supply of Oxytocin formulations
for human use only to registered hospitals and clinics in
public and private sector to prevent misuse of the drug.
The members deliberated upon the matter and "agreed on
a draft notification for regulating, restricting the
Oxytocin formulations for human use to be supplied
only to registered hospitals and clinics in public and
private sector."
The DTAB accepted in principle the proposal to amend
Rule 96 of the Drugs and Cosmetics Rules, 1945 to ensure
that bar-coding system is adopted for the manufacture and
sale of Oxytocin formulations so as to ensure track and
traceability of the product, to avoid its misuse.
The DTAB had further agreed to prohibit the import
of Oxytocin formulations under Section 10A of the said Act
for human as well as animal use.
6.23. On 09.04.2018, the DCC at the 53rd meeting was informed
about the recommendations of the 78th DTAB meeting held
on 12.02.2018 to address the misuse of Oxytocin. The DCC,
in principle, agreed with the recommendations of the DTAB.
6.24. On 18.04.2018, The Ministry of Health and Family Welfare,
issued a Notification, containing "Draft Rules" viz. the
"Drugs and Cosmetics (Amendment) Rules, 2018, on which
UNION OF INDIA v. BGP PRODUCTS OPERATIONS GMBH AND HAGENE
IMMERMATT WEG. [INDU MALHOTRA, J.]
A
B
C
D
E
F
G
H
186
SUPREME COURT REPORTS
[2019] 11 S.C.R.
objections and suggestions were invited to within 45 days.
The Draft Rules proposed to amend Rule 96 of the Drugs
and Cosmetics Rules, 1945 to ensure that a 3-tier bar-coding
system is adopted by licensed manufacturers of Oxytocin
formulations to facilitate and trace their products.
The relevant extracts of Rule 1 and 2 are extracted
hereinbelow for ready reference:
DRAFT RULES
"1. (1) These rules may be called the Drugs and
Cosmetics ( Amendment) Rules, 2018.
(2) These rules shall come into effect after one
hundred eighty days of the publication of the final
rules in the Gazette of India. 2. In the Drugs and
Cosmetics Rules, 1945, in rule 96, in sub-rule (1),
after clause (xii) the following clause shall be
inserted, namely:-
"(xiii) (A) The manufacturers of drug formulations
of oxytocin shall print the details specified below to
facilitate tracking and tracing of their products,
namely:-
a. at primary level packaging of two dimensional
barcode encoding unique and universal global
product identification code in the 14 digits Global
Trade Item Number format along with batch number,
expiry date and a unique serial number of the primary
pack;
b. at secondary level packaging of one or two
dimensional barcode encoding unique and universal
global product identification code in the 14 digits
Global Trade Item Number format along with batch
number, expiry date and a unique serial number of
the secondary pack;
c. at tertiary level packaging of one dimensional
barcode encoding unique and universal global
product identification code in the 14 digits Global
Trade Item Number format along with batch number,
A
B
C
D
E
F
G
H
187
expiry date and a unique serial number of the Tertiary
pack.
(B) The manufacturer of drug formulation shall
maintain the data in the parent - child relationship
for all three level of packaging and their movement
in its supply chain.
(C) The data referred to in sub-rule (2) shall be
uploaded on the central portal of the Central
Government by the manufacturer or its designated
agency before release of the drugs for sale or
distribution. (D) The responsibility of the correctness,
completeness and ensuring timely upload of data on
the Central portal shall be that of the manufacturer."
The Central Government did not proceed with these Draft
Rules, since the Impugned Notification came to be passed
on 27.04.2018. As a consequence, the Draft Rules lapsed.
6.25. On 24.04.18, the Ministry of Health and Family Welfare in
exercise of its powers under Section 10A of the Act issued
a Notification completely prohibiting the import of 'Oxytocin
and its formulation in any name or manner' into India.
6.26. On 27.04.18, the Ministry of Health and Family Welfare in
exercise of its powers under Section 26A of the Act issued
the Impugned Notification, which superseded the
Notification dated 17.01.2014, and directed that the drug
Oxytocin shall be manufactured only by public sector
undertakings or companies for domestic use. However, the
manufacture of Oxytocin formulations for export purposes
shall be open to both public and private sector companies.
The impugned Notification date 27.04.2018 is extracted
herein below for ready reference:
"G.S.R. 411(E).-Whereas the Hon'ble High Court
of Himachal Pradesh, Shimla, has, in its judgment
dated 15.3.2016 in CWPIL No. 16 of 2014 titled
'Court on its own motion' versus State of Himachal
Pradesh and others, observed that there is large scale
clandestine manufacture and sale of the drug
UNION OF INDIA v. BGP PRODUCTS OPERATIONS GMBH AND HAGENE
IMMERMATT WEG. [INDU MALHOTRA, J.]
A
B
C
D
E
F
G
H
188
SUPREME COURT REPORTS
[2019] 11 S.C.R.
Oxytocin leading to its grave misuse, which is harmful
to animals and humans;
And whereas, the said Hon'ble High Court also
observed that the feasibility of restricting the
manufacture of Oxytocin only in public sector
companies and also restricting and limiting the
manufacture of Oxytocin by companies to whom
licenses have already been granted should be
considered;
And whereas, the Drugs Technical Advisory Board
constituted under section 5 of the Drugs and
Cosmetics Act, 1940 (23 of 1940) considered the said
issue in its meeting held on the 12th February 2018
and recommended that Oxytocin formulations for
human use be regulated and restricted to be supplied
only to registered hospitals and clinics in public and
private sector to prevent misuse of the said drug;
And whereas, the Central Government, on the basis
of the recommendations of the said Board and after
examination of the matter, is satisfied that unregulated
and illegal use of the drug Oxytocin is likely to involve
risk to human beings or animals and that in the public
interest it is necessary and expedient to regulate and
restrict the manufacture, sale and distribution of the
drug Oxytocin in the country to prevent its misuse by
unauthorised persons or otherwise;
Now, therefore, in exercise of the powers conferred
by section 26A of the said Act, and in supersession
of the notification number G.S.R. 29(E) dated 17th
January, 2014, the Central Government hereby directs
that the drug Oxytocin shall be manufactured for sale
or for distribution or sold in the manner specified
below, namely:-
(i) The manufacture of Oxytocin formulations for
domestic use shall be by public sector undertakings
or companies only and the label of the product shall
bear barcodes.
A
B
C
D
E
F
G
H
189
(ii) The manufacture of Oxytocin formulations for
export purposes shall be open to both public and
private sector companies and the packs of such
manufacture for exports shall bear barcodes.
(iii) The manufacturers of active pharmaceutical
ingredient of Oxytocin shall supply the active
pharmaceutical ingredient only to the public sector
manufacturers licensed under the Drugs and
Cosmetics Rules, 1945 for manufacture of
formulations of the said drug for domestic use.
(iv) The manufacturers of active pharmaceutical
ingredient of Oxytocin shall supply the said active
pharmaceutical ingredient to the manufacturers in
public and private sector licensed under the Drugs
and Cosmetics Rules, 1945 for manufacture of
formulations of the said drug for export purpose.
(v) The Oxytocin formulations manufactured by the
public sector companies or undertakings licensed
under the Drugs and Cosmetics Rules, 1945 for
domestic use shall supply the formulations meant for
human and veterinary use only,-
(a) to the registered hospitals and clinics in public
and private sector directly; or (b) to the Pradhan
Mantri Bhartiya Janaushadhi Pariyojana (PMBJP)
and Affordable Medicines and Reliable Implants for
Treatment (AMRIT) outlets or any other Government
entity which may be specified by the Central
Government for this purpose in the country which
shall further supply the drug to the registered
hospitals and clinics in public and private sector.
(vi) The Oxytocin in any form or name shall not be
allowed to be sold through retail Chemist."
(emphasis supplied)
6.27.