With the government losing a substantial amount of revenues due to several loopholes in the provisions laid down under Rule 69A of the Drugs and Cosmetics Act regarding grant of Loan Licenses, the union health ministry has decided to review the entire gamut of issues related to the contractual manufacturing.

The ministry has constituted a sub-committee in this regard with Dr V G Somani, Deputy Drugs Controller, CDSCO, as convener to examine the issue of contractual manufacturing in the country. State drugs controllers of Odisha, Uttar Pradesh and Maharashtra are the other members of the committee which has been asked to give recommendations for changes, if any, under the Drugs and Cosmetics Rules, 1945 within three months time.

The issue had its echo in the Drugs Consultative Committee (DCC) meeting that was held recently. Members felt that the present practice is not only leading to loss of revenue to the government but also permit a manufacturer to manufacture different brands of the same product.

Citing instances of loss of revenue to the government, members felt that if a brand name owner intends to manufacture the product on contractual basis with a valid licensee, the licensee has to deposit an additional fee of Rs.300 only to the concerned licensing authority to get the approval in the body of the respective licenses (Form -25 & 28). If the applicant applies for a loan licence for that product as a loan licensee with the licensed manufacturer, whose manufacturing facilities to be availed by him, he has to deposit a license fees of Rs.7500 for each license. So, the government loses Rs.7200 per licence.

Likewise, if a licensed manufacturer has been permitted to manufacturer any FDC drug by paying fees of Rs.50,000 then any person can approach him on contractual basis to manufacture the said FDC drug with different brand name by paying fees of Rs.300 only as additional item in the existing license, resulting in a huge loss of revenue to the government.

The DCC members also explained that allowing on contractual manufacturing of FDC (New Drug) one manufacturer is manufacturing an FDC with different brand name on contractual basis for more than one firm. By doing so, the same FDC is available in the market with different brand name with different MRP having same manufacturing licence number, having one manufacturing address.

As the ministry felt that there is a need for an in-depth examination of the issue, it constituted a sub-committee to go into the entire gamut of issues related to the contractual manufacturing in the country.