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Oxytocin Ban: Case to have far-reaching effects on Public Health Rights, SC refers matter to larger Bench

Oxytocin Ban: Case to have far-reaching effects on Public Health Rights, SC refers matter to larger Bench

Meera Emmanuel

Can private companies produce the Oxytocin drug for domestic use in India?

On Thursday, a Division Bench of the Supreme Court held that the question raises serious issues having far-reaching implications and referred it to a three-judge Bench. The order passed by a Bench of Justices AM Sapre and Indu Malhotra states,

“… this is a fit case to refer the matter to a larger Bench of three Judges to consider the aforesaid questions of law, and authoritatively pronounce upon the same.”

The order was passed in an appeal preferred by the Union Government challenging the Delhi High Court’s 2018 judgment quashing a notification dated April 27, 2018 that had barred private companies from manufacturing oxytocin for domestic use.

Factual Background

Oxytocin, which is naturally produced by females, is administered artificially to induce labour pain, control bleeding after childbirth, or help new mothers lactate. One of the prominent misuses of Oxytocin is in the dairy sector to enhance lactation of livestock

The Central government had, through a notification dated April 27, 2018, prohibited the sale, distribution, manufacture and import of Oxytocin by private companies with effect from September 1, 2018. The said notification had vested in State-run Karnataka Antibiotics and Pharmaceuticals Ltd. (KAPL) the monopoly to manufacture and sell the same.

However, in December 2018, the Delhi High Court had quashed the April 27 notification as arbitrary and unreasonable. Inter alia, the High Court had found that there was insufficient data to conclude that the existing availability or manner of distribution of Oxytocin posed a risk to human life or animals, which is one of the pre­-conditions for the exercise of power under Section 26A of the Drugs and Cosmetics Act under which the notification was issued.

The Bench had further held that the Central Government did not adequately weigh the danger to the lives of the users of Oxytocin i.e pregnant women and young mothers. Further, it did not consider the deleterious effect to the public generally and women particularly, following the restriction on oxytocin manufacture to a single public sector enterprise, namely KAPL. The High Court had also pointed out that KAPL had no prior experience in manufacturing the drug.

In this backdrop, it had ruled against the Central Government, opining that restricting Oxytocin manufacture could entail drastic public health implications. Moreover, it was also held that there is no provision which authorized the Central Government to create a State monopoly in favour of one licensee (in this case, KAPL).

In the appeal filed against this judgment, arguments were made on behalf of the Central Government (appellant) by Solicitor General Tushar Mehta, assisted by Additional Solicitor General Vikramjeet Banerjee.

On the respondent side, Senior Advocates Kapil Sibal, Colin Gonsalves and Ganesh appeared on behalf of various private pharmaceutical companies. Senior Advocate Meenakshi Arora appeared for the Federation of Obstetric and Gynaecological Societies of India while Advocate Jayant Mehta appeared on behalf of the Indian Medical Association

Questions referred to Larger Bench

The lead opinion authored by Justice Indu Malhotra states,

The twin issues which arise for consideration are on the one hand, the unregulated and clandestine manufacture of the drug Oxytocin, which is reportedly misused in milch animals; and on the other hand, the continued supply of an essential life­saving drug, which is used as the first line drug for prevention and treatment of post­partum haemorrhage at the time of childbirth.”

In particular, Justice Malhotra framed the following questions for consideration by the three-judge Bench:

  1. Whether a drug included in the National List of Essential Medicines published under Schedule 1 of the Drugs (Prices Control) Order, 2013 notified under Section 3 of the Essential Commodities Act, 1955 would be subject to the provisions of Section 26A of the Drugs and Cosmetics Act, 1940?
  2. Whether the impugned notification has resulted in creating a monopoly in favour of public sector companies, to the complete exclusion of private sector companies, and if so, whether it would be protected by Article 19(6)(ii) read with Article 14 of the Constitution?
  3. Whether the classification made by the impugned notification between licensed public sector and private sector companies, in the manufacture of the drug Oxytocin for domestic use, would achieve the object and purpose of preventing the unregulated and illegal use of the drug? 
  4. Whether it would be in public interest to restrict the manufacture of a life­-saving drug for domestic use, to a single public sector undertaking, to the complete exclusion of the private sector companies, particularly in view of the high maternal mortality rates in the country? 
  5. Whether there was relevant and objective material before the Central Government to form the basis of satisfaction to exercise the power to prohibit the manufacture of the drug by the private sector companies for domestic use, under Section 26A of the Drugs and Cosmetics Act, 1940? 
  6. Whether the object of curbing the clandestine manufacture and unregulated use of the drug Oxytocin, which is covered by Section 18 of the Drugs and Cosmetics Act, 1940, can be achieved by taking recourse to Section 26A by imposing a ban on the manufacture of licensed drugs by private sector companies?
  7. Whether the exercise of power by the Central Government under Section 26A of the Drugs and Cosmetics Act, 1940 is legislative or executive in nature? 

While concurring Justice Malhotra, Justice AM Sapre highlights that the following broad questions emerge for consideration by the larger Bench, i.e.

  • Abstract legal issues such as what is the nature of powers exercised by the Central Government under Section 26­A of the Drugs and Cosmetics Act, whether it is legislative or executive, as there is no decision of this Court so far on this issue.
  • What are the essential ingredients for invoking the powers under Section 26­A of the Drugs and Cosmetics Act in relation to any Drug and whether such power is in conflict with the exercise of powers conferred under the Essential Commodities Act.
  • Whether issuance of the impugned notification has resulted in creating monopoly (whether partial or full) in favour of the State and, if so, whether it has satisfied the rigor of Article 14 read with Article 19 (6)(ii) of the Constitution of India.
  • Whether material relied on by the Central Government can be held as sufficient to sustain the impugned action.

Justice Sapre went on to note that the decision on these questions would have far-reaching effects as far as public health rights are concerned. Further, he noted that it would also decide the scope of the powers of the Central Government under Section 26­A of the Drugs and Cosmetics Act qua the rights of the persons, who are engaged in the business of manufacture and sale of drugs. He goes on to add,

In effect, in my opinion, it will not be a judgment inter party but it will be in rem laying down the law on the questions.”

The matter has been directed to be placed before the Chief Justice so that it may be taken up by a three-judge Bench of the Court.

[Read Order]