Licences for manufacturing drugs under 17 critical categories will be given only by the Centre and not by states, a new bill has proposed.
The bill also proposes to set up a Central Drugs Authority to act as an appellate body for central and state drug controllers.
The Drugs and Cosmetics Bill, 2013, a comprehensive legislation for the drugs and cosmetics sector, was cleared by the Union Cabinet on Thursday, sources said.
The Health Ministry proposes to introduce the bill in Parliament during the Monsoon session.
The proposed bill seeks to replace the Drugs and Cosmetics Act, 1940, which was amended in 2008, and will have a separate chapter on clinical trials and another on medical devices, which lays down specific penal provisions in case of any violation.
The purpose behind the bill is to bring a comprehensive legislation to cover various aspects of drugs and cosmetics, including regulation of clinical trials and medical equipment sector, Health Ministry officials said, adding that it aims to help strengthen the domestic drug manufacturing industry.
The new legislation proposes a separate set of rules for grant of compensation in case of death or injury during clinical trials and contains penal provisions, including fine or imprisonment, for violation of the law.
It also seeks to bring medical devices under the purview of the Act and proposes a separate set of rules for it, as such equipment was considered as 'drugs' under the existing act and had no provisions to regulate it.
Under the new bill, only the Central Drugs Standard Control Organisation will have powers to grant manufacturing licences to 17 critical categories of drugs that includes life-saving drugs, vaccines and DNA products which require specialised manufacturing.
Once the bill becomes a law, state drug controllers will not have powers to grant licences for drugs in these categories. Manufacturing licences for such drugs have been till now granted by state drug controllers after obtaining no-objection from the central drug controller.
This resulted in grant of manufacturing licences to drug makers by state drug controllers in the garb of 'new drugs' without even conducting clinical trials on Indian population to check the efficacy and safety of the drugs.
The Parliamentary Standing Committee on Health took serious objection to this violation of the law and sought remedial measures. The new bill includes major recommendations of the Parliamentary panel.
The proposed Central Drug Authority would judge the actions taken by the state and central controllers and would be a multi-member authority headed by the Health Secretary.
It would have secretaries of seven related ministries as members, besides nominees from states and experts in the field.
The CDA will have the power to review, suspend or cancel licences granted by the central and state drug licencing authorities.
The proposed bill comes in the wake of recent Supreme Court directions to regulate drugs licencing and that the Health Secretary should be responsible for all drug licencing.
The new bill also seeks to establish a Medical Devices Technical Advisory Board as such equipment will henceforth be regulated under the proposed law.
It also proposes to expand the Drugs Technical Advisory Board and creation of a new cadre of officers for regulation of medical devices on the lines of that for drugs and for defining 'adulterated cosmetics'.
The new bill does not contain amendments in respect of AYUSH (Ayurveda, Yoga and Naturopathy, Unani, Siddha and Homoeopathy systems) drugs.
The Department of AYUSH will bring a separate proposal for carrying out the provisions relating to AYUSH drugs from the Drugs and Cosmetics Act and enacting a separate law exclusively for regulating these drugs.