New Delhi, January 19, 2017: On 24 November 2016, the Food Safety and Standards Authority of India (“FSSAI”) issued a direction regarding operationalisation of the Food Safety and Standards (Food or Health Supplements, Nutraceuticals, Foods for Special Dietary Uses, Foods for Special Medical purpose, Functional Foods, and Novel Food) Regulations, 2016 (“2016 Regulations”) pending gazette notification. The 2016 Regulations shall be effective from 1 January 2018.
It is to be seen whether the 2016 Regulations would bring clarity on the regulatory framework of nutraceuticals and health supplements, i.e., whether these are to be regulated as a ‘drug’ under the Drugs and Cosmetics Act, 1940 (“DCA”) or ‘food’ under the Food Safety and Standards Act, 2006 (“FSSA”) (erstwhile Prevention of Food Adulteration Act, 1954).
Background
Until now, the market players have taken a mixed approach of positioning their multi-vitamin products – while some have taken a conservative approach and have obtained a registration under the DCA, many manufactures have preferred to position their products as health supplements and nutraceuticals under the FSSA to avoid the onerous regime under the DCA.
The genesis of this overlap is the lack of established standards to differentiate the products as ‘drugs’ and ‘food’. “Drugs” as defined under the DCA includes any substance for mitigation or prevention of any disease or disorder in human beings. While the FSSA recognises nutraceuticals and health supplements as ‘food’, the definition of “food” under the DCA includes any substance other than a drug. Therefore, there is an apparent regulatory overlap of FSSA and DCA since multi vitamin composition of certain products are, in fact, used for both,prevention of diseases as well as providing health benefits.
This issue was even recognised by the National Pharmaceutical Pricing Authority (“NPPA”). Reportedly in 2011, NPPA has issued notices to various manufacturers of multi-vitamin products who positioned their products as food to avoid violation of fixing price above the price ceiling. During this period, a press release was also issued requesting the Ministry of Health and Family Welfare to advise the concerned authorities against issuing licenses to manufacturers trying to circumvent the norms relating to drugs pending notification of the FSSA.
Measures taken to fill-in regulatory gaps
In view of these regulatory gaps, the FSSAI attempted to bring in measures to tighten the regulatory regime concerning foods. In May 2013, it issued an advisory on product approval which required food business operators to obtain approval if there was any change of ingredients in the products. However, this advisory has been struck down by the Supreme Court in its Vital Nutraceuticals ruling on technical grounds.
Subsequently, the FSSAI issued draft guidelines and after considering the public comments, the FSSAI has now issued the 2016 Regulations. These Regulations have set out detailed guidelines on product composition, marketing, packaging and labelling for multiple categories of products.
In the meantime, in July 2011, the division bench of the Patna High Court in the Ranbaxy Laboratories case directed the Drugs Technical Advisory Board (“DTAB”)to analyse if certain products such as Revital should be classified as ‘food’ or ‘drug’. After analysis, in September 2015, the DTAB recommendations for classification of food were published for public comments in September 2015. It was stated that for products to qualify as food, (i) the vitamins and minerals should be below the range specified in Schedule V of the Drugs and Cosmetics Rules, 1945; (ii) ingredients must not exceed recommended daily allowance levels; and (iii) they must not claim treatment, prevention or mitigation of any disease/ disorder. On the basis of these criteria, DTAB recommended that Revital, Ferradol, A to Z among others, should be classified as drugs. These recommendations are yet to be made effective.
Need for further regulatory action
The 2016 Regulations is indeed a welcome step from the perspective of consumer health and safety of consumers and patients. Although no price ceiling has been imposed on the health supplement and nutraceutical manufacturers, they are required to comply with detailed requirements on packaging, labelling and product composition.
Having said that, the 2016 Regulations have not addressed the core issue from the perspective of the food business operators. The regulations do not provide for any bright line test for differentiating ‘food’ from ‘drugs’. In fact, product classification appears to be even more challenging – while on the one hand the 2016 Regulations allow for health claims for ‘disease reduction risk’, they also state that claims for preventing any disease should not be made. The food business operators would have to rely on the judgment of FSSAI for distinguishing claims of ‘disease reduction risk’ from claims of ‘prevention of disease’.
The upcoming 12 months would be significant for the food business operators as they may have to change the way they conduct their business and would have to plan and implement strategies for complying with the requirements of the 2016 Regulations. It is imperative that a robust mechanism is also developed at the earliest by which one can easily differentiate between ‘drug’ and ‘food’ to avoid being on the wrong side of the regulatory regime.
Authors
Bhavik Narsana (Partner) is a part of the Lifesciences and Healthcare team and specialises in corporate M&A and PE work and Pranay Bagdi (Senior Associate) specialises in corporate M&A and PE work at Khaitan & Co. The content of this document do not necessarily reflect the views/position of Khaitan & Co but remain solely those of the authors. For any further queries or follow up please contact Khaitan & Co at legalalerts@khaitanco.com
Corporate Comm India(CCI Newswire)
