Supreme Court upholds Himachal HC ruling on drug regulator powers, impacting CDSCO enforcement

New Delhi: The Supreme Court dismissed the Union government's challenge to a Himachal Pradesh High Court judgment that held that an inspector of the national drug regulator did not have the jurisdiction to independently inspect, collect samples and launch prosecution against a pharma firm under Chapter IV of the Drugs and Cosmetics Act.

The high court held that state authorities, not the central regulator, hold powers under Chapter IV that deals with the manufacture, sale and distribution of drugs in their jurisdiction.

Also Read: Centre proposes easier norms for faster drug rollout


The Supreme Court, in its order Tuesday, said it found "no sufficient" ground to interfere with the May 7 high court order. It condoned a delay in filing the special leave petition, but dismissed the Centre's plea. "The significance of the case lies in the high court's finding on the division of powers between the Centre and states in drug regulation," said a person familiar with the legal matter.

Under the Drugs and Cosmetics Act, the central regulator has responsibilities in areas including the regulation of imports and specified categories and activities such as new drugs, clinical trials, vaccines, sera and large volume parenterals, he said. States have a role in regulating the manufacture, sale and distribution of drugs within their jurisdictions.

Also Read: US names India, China, Pakistan among drug transit, illicit drug-producing nations for FY27

The high court held that a drugs inspector of the Central Drugs Standard Control Organisation (CDSCO) could not independently exercise enforcement powers under Chapter IV of the Drugs and Cosmetics Act since state authorities have those powers.

"The issue is significant because the CDSCO has in recent years increasingly undertaken inspections and enforcement-related activities involving drug manufacturers," said Sanjay Kumarr Jain, an advocate for Salus Pharmaceuticals that challenged the CDSCO action. "The high court ruling could therefore put the statutory basis of such central enforcement action under closer judicial scrutiny." The dispute arose after a CDSCO inspector collected drug samples manufactured by Salus at a hospital in Jalandhar Cantt.