1 week ago
Draft Drugs Bill Expands Compounding Route, Retains Tougher Punishments
A proposed new law would change how some drug-company mistakes are handled.
For certain less serious rule violations, companies could pay money instead of going through a criminal trial.
The proposed system could cover some problems with drug quality, clinical trials and medical devices.
It would not apply to the most dangerous cases.
Drugs that could cause death or serious injury would still bring very severe punishments.
Experts say the change could make companies less afraid of ordinary compliance mistakes.
Another expert says officials should follow clear rules so penalties are applied consistently.
The Bill is still only a draft and must be introduced in Parliament before it can proceed.
The draft Drugs, Medical Devices and Cosmetics Bill, 2026, would allow six offence categories to be compounded.
Eligible companies could resolve certain offences by paying a prescribed amount instead of facing prolonged criminal proceedings.
The proposed route covers specified quality, clinical-trial and medical-device violations, but excludes the most serious offences.
Adulterated or spurious drugs likely to cause death or grievous hurt could attract at least 10 years’ imprisonment.
The Bill would replace the Drugs and Cosmetics Act, 1940, but has not yet been introduced in Parliament.
- Who
- Drug and medical-device companies, authorised officers, courts, regulators and clinical-trial participants are affected.
- What
- The draft Bill would expand the ability to compound six categories of offences while retaining criminal penalties for serious violations.
- Where
- The proposed proceedings would involve authorised officers and, where necessary, designated courts of session.
- When
- The proposal appears in the 2026 draft Bill; it has not yet been introduced in Parliament.
- Why
- The stated aim is to reduce prolonged criminal proceedings for specified regulatory lapses while preserving strict punishment for serious public-health violations.
Supporters of expanded compounding
Caution over enforcement discretion
Reducing criminal proceedings
Supporters of expanded compounding
Supporters say compounding would reduce fear among companies and senior management over routine compliance failures, potentially encouraging investment.
Caution over enforcement discretion
Critics or cautious observers may be concerned that resolving offences through payment could weaken accountability, although the articles do not attribute that specific criticism to a named source.
Official discretion and consistency
Supporters of expanded compounding
The proposed system is described as a practical, balanced distinction between serious public-health violations and regulatory non-compliance.
Caution over enforcement discretion
Pranay Chitale said discretion for officers should be accompanied by regulations governing penalties to ensure uniform execution.
Treatment of serious offences
Supporters of expanded compounding
The Bill preserves a compounding route for specified lower-level violations while directing the harshest sanctions toward dangerous adulterated or spurious drugs.
Caution over enforcement discretion
Serious offences involving products likely to cause death or grievous hurt would remain subject to stringent criminal punishment, including possible life imprisonment.
Key facts
- Proposed legislation
- Drugs, Medical Devices and Cosmetics Bill, 2026
- Legislation it would replace
- Drugs and Cosmetics Act, 1940
- Compounding coverage
- Six specified categories of offences
- Payment ceiling
- The prescribed amount cannot exceed the maximum fine for the offence
- Most severe punishment
- At least 10 years’ imprisonment, potentially life imprisonment, plus a fine of at least Rs 10 lakh or three times the confiscated drugs’ value, whichever is higher
- Serious-case courts
- Central or state governments could designate courts of session as special courts in consultation with the concerned High Court
- Current status
- The draft has not yet been introduced in Parliament
Quotes
Pranay Chitale
Partner at Chamber One
“The Bill envisages a well-balanced compounding regime by distinguishing between serious public-health violations and regulatory non-compliance. In implementing a well balanced compounding mechanism, there is some discretion given to the relevant officers. I believe this should be accompanied by regulations governing the penalties to ensure there’s uniformity in execution.”
financialexpress.com
“The most common response to regulatory lapses under the existing law has been criminal prosecution against senior management, which has created a sense of fear in the industry. The proposed law seeks to remove that fear and give entrepreneurs and senior management greater confidence to enter the sector.”
financialexpress.com
Sources
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