Case Note & Summary
The case involves a challenge to a notification issued by the Ministry of Health and Family Welfare under Section 26A of the Drugs and Cosmetics Act, 1940, which restricted the manufacture of Oxytocin formulations for domestic use to public sector undertakings only, excluding private sector companies. Oxytocin is an essential drug used for inducing labour and preventing postpartum haemorrhage, listed in the WHO Model List of Essential Medicines and the National List of Essential Medicines. The notification was based on concerns about rampant misuse of Oxytocin in milch animals to artificially extract milk, which had been discussed in various meetings of the Drugs Technical Advisory Board (DTAB) and Drugs Consultative Committee (DCC) since 1997. Despite earlier recommendations for increased surveillance and regulation, the government issued the impugned notification in 2018. Private sector manufacturers challenged the notification before the Delhi High Court, which quashed it on grounds of arbitrariness and lack of proportionality. The Union of India appealed to the Supreme Court. The Supreme Court upheld the High Court's decision, holding that the measure was disproportionate to the objective of curbing misuse, as less restrictive alternatives like enhanced surveillance and regulation were available. The court emphasized that Oxytocin is an essential medicine and its availability should not be jeopardized by excluding private sector manufacturers. The appeal was dismissed, and the notification was quashed.
Headnote
A) Constitutional Law - Judicial Review of Executive Action - Arbitrariness and Proportionality - Section 26A, Drugs and Cosmetics Act, 1940 - The court examined whether the impugned notification restricting manufacture of Oxytocin to public sector was arbitrary and disproportionate to the stated objective of curbing misuse. Held that the measure was not proportionate as it completely excluded private sector without adequate justification and less restrictive alternatives were available (Paras 1-6). B) Drugs and Cosmetics Act - Section 26A - Power to Prohibit Manufacture etc. of Drugs in Public Interest - The court considered the scope of Section 26A and held that the power must be exercised reasonably and not in a manner that causes undue hardship or eliminates competition without necessity. The notification was quashed as it failed to balance public health needs and economic interests (Paras 1-6). C) Public Health - Essential Medicines - Oxytocin - National List of Essential Medicines - The court noted that Oxytocin is an essential medicine listed in NLEM and WHO Model List, and its availability must be ensured. The restriction to public sector alone could jeopardize supply and was not justified by evidence of misuse (Paras 6-6.13).
Issue of Consideration
Whether the Notification dated 27.04.2018 issued under Section 26A of the Drugs and Cosmetics Act, 1940 restricting manufacture of Oxytocin formulations for domestic use to public sector undertakings only is valid.
Final Decision
The Supreme Court dismissed the appeals and upheld the Delhi High Court judgment quashing the notification dated 27.04.2018.
Law Points
- Section 26A of Drugs and Cosmetics Act
- 1940
- Essential Medicines
- National List of Essential Medicines
- Misuse of Oxytocin
- Public Interest
- Arbitrariness
- Proportionality
