No More Court Trials for Pharma Firms in Minor Drug Law Violations

New Delhi: Pharmaceutical companies may no longer be required to appear before courts for certain minor and technical violations under the Drugs and Cosmetics Act, 1940, as amended guidelines now allow such offenses to be settled through monetary penalties and self-corrective measures.

The move follows the notification of the Drugs and Cosmetics (Compounding of Offences) Rules, 2025, framed under the Jan Vishwas (Amendment of Provisions) Act, which seeks to promote ease of doing business by decriminalising minor offences across several central laws, including those governing drugs, cosmetics and medical devices.

Traditionally, non-compliance under the Drugs and Cosmetics Act could lead to criminal prosecution. However, recognising the need to address minor and technical contraventions without overburdening the judicial system, Section 32B was introduced in the Act to enable compounding of offences—a mechanism that allows violators to avoid prosecution by paying a prescribed monetary amount, subject to conditions and regulatory discretion.

The Central Drugs Standard Control Organisation (CDSCO), functioning under the Union Ministry of Health and Family Welfare, has issued a detailed guidance document explaining the scope, procedure and safeguards under the new compounding framework. The rules have been framed under Section 32B read with Section 33(2)(r) of the Drugs and Cosmetics Act and provide a formal legal pathway for compounding certain offences without resorting to court proceedings.

Under the new system, the focus shifts from punitive action to compliance-oriented regulation, encouraging regulated entities to take corrective steps while ensuring patient safety and regulatory accountability.

PROCEDURE FOR COMPOUNDING OF OFFENCES

• Whenever any application under Rule 4 of Drugs and Cosmetics (Compounding of Offences) Rules, 2025 in the prescribed form is received through physical mode along with an advance copy in email at raj.shree64@cghs.nic.in to the office of Compounding Authority, the e-file of the application is required to generate by the concerned department.
• The compounding authority shall call for a report from reporting authority, under whose jurisdiction offence has been committed with reference to the particular furnished in the application.
• The reporting authority within 05 days of receipt of application shall ask the report from the concerned zonal/sub-zonal/port office in whose jurisdiction the offence has been committed with reference to the particulars furnished in the compounding application.
• The concerned head of the zonal/sub-zonal/port office shall forward their report within 10 days of receipt of application with reference to the particulars furnished in the compounding application.
• The reporting authority shall forward his report to the compounding authority within one month of receipt of compounding application for the report or within such extended period as may be allowed by the compounding authority.
• The compounding authority after taking into the account the content of the application may, by order either allow the application indicating the compounding amount and grant him immunity from prosecution in terms of rule 6 of Drugs and Cosmetics (Compounding of Offences) Rules, 2025 or reject the compounding of offence application.
• The compounding authority shall afford the personal hearing before rejecting the compounding of offence application and the ground of rejection shall be mentioned in the order passed by the compounding authority.
• The every order passed by the compounding authority shall be communicated to the applicant.
• The applicant shall within the period of 30 days from the date of receipt of order of allowing the compounding of offence, pay the compounding amount as order to be paid by the compounding authority and shall furnish the proof of such payment to the compounding authority.
• The compounding amount once paid on the order of compounding authority shall not be refundable except in cases where court reject grant of immunity from prosecution grant by the compounding authority.
• The applicant cannot claim, as of right, that the offence to be compounding.
• The compounding authority may grant Immunity from prosecution with such conditions as deemed fit for the offence with respect to the case covered by the Compounding of offence under the Drugs and Cosmetics (Compounding of Offences) Rules, 2025. The immunity shall be grant if the compounding authority is satisfied that the applicant has cooperated in the proceeding and has made full and true disclosure of facts relating to the case.
• The Immunity from prosecution in certain cases shall stand withdrawn, if person fails to pay sum of specified order of Compounding passed by the compounding authority.
• The immunity granted to the applicant, may be withdrawn by the compounding authority, if satisfied that such applicant had, in the course of compounding proceedings, concealed any particulars, material or had given false evidence, and thereupon such person may be tried for the offence with respect to which immunity

To view the official guidelines, click the link below: