Drugs and Cosmetics Compounding Rules 2025

May 1, 2025

On 24 April 2025, the Ministry of Health and Family Welfare introduced the Drugs and Cosmetics (Compounding of Offences) Rules, 2025. This initiative aims to streamline the resolution of minor offences under the Drugs and Cosmetics Act 1940. The rules allow offenders to settle cases through fines, bypassing lengthy prosecution processes. They came into effect on 25 April 2025.

Compounding Framework

The new rules are designed to facilitate the settlement of minor offences related to the manufacturing, import, sale, and distribution of drugs. They apply to pharmaceutical companies and individuals involved in these activities. The framework encourages compliance and reduces the burden on the judicial system.

Appointment of Compounding Authorities

The Central Government will appoint a compounding authority at a senior level. This authority must hold a position not lower than that of a Licensing Authority. Similarly, State Governments will designate officers below the rank of Licensing Authority to serve in this capacity.

Application Process for Compounding

Applicants can submit their requests for compounding either before or after prosecution begins. The application must include essential details such as the applicant’s identity, product information, and specifics of the offence. This streamlined process allows for a quicker resolution.

Procedure Following Application Submission

Upon receiving an application, the compounding authority can request a report from a reporting authority. This report must be provided within one month. The authority may grant immunity from prosecution if the application is approved. The applicant must pay the specified compounding amount within 30 days to secure this immunity.

Conditions for Granting Immunity

Immunity from prosecution is not automatic. The compounding authority retains discretion over whether to grant it. If the applicant fails to pay the compounding amount or provides false information, immunity may be revoked. This ensures accountability among applicants.

Impact on Pharmaceutical Sector

The introduction of these rules is for the pharmaceutical industry, projected to reach $100 billion by 2025. By decriminalising minor offences, the rules aim to promote ease of doing business while ensuring that quality and safety remain paramount.

Alignment with Jan Vishwas Act 2023

These compounding rules align with the Jan Vishwas Act 2023, which reclassifies certain fines as penalties, thus reducing the need for legal proceedings. The Act aims to decriminalise various offences to encourage a more business-friendly environment.

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