Drugs and Cosmetics Compounding Rules, 2025

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Dated: 05.06.2025

Drugs and Cosmetics Compounding Rules, 2025

The Ministry of Health and Family Welfare, Government of India, has formally notified the Drugs and Cosmetics (Compounding of Offences) Rules, 2025 via G.S.R. 259(E) dated 24th April 2025. These long-awaited rules provide a clear legal framework for compounding of offences under the Drugs and Cosmetics Act, 1940, marking a shift toward rationalizing prosecutions and enabling regulatory compliance with lesser penal impact for eligible entities.

Background and Purpose

Parameter	Details
Notification Number	G.S.R. 259(E)
Issued By	Ministry of Health and Family Welfare
Date of Gazette Notification	24th April 2025
Legal Basis	Section 33(2)(r) read with Section 32B of the Drugs and Cosmetics Act, 1940
Earlier Draft Rule	G.S.R. 374(E) dated 10th July 2024

The final rules have been issued after public consultation and analysis of stakeholder suggestions received during the 45-day notice period following the July 2024 draft notification.

Key Highlights of the Rules

Section	Details
Title	Drugs and Cosmetics (Compounding of Offences) Rules, 2025
Applicability	Companies or persons engaged in manufacturing, import, sale, or distribution of drugs/cosmetics
Authority Involved	Compounding Authority (appointed by Centre or State), Reporting Authority
Immunity Grant	Possible upon full cooperation, disclosure, and payment of compounding fee
Right to Compounding	Not automatic – discretion lies with Compounding Authority
Withdrawal of Immunity	If conditions are breached or misrepresentation occurs

Compounding Procedure

Application Filing
- Made in the prescribed format either before or after initiation of prosecution.
- Includes factual details, licenses, test reports, product details, and relevant legal breaches.
Inquiry and Reporting
- Compounding authority seeks a report from the relevant licensing/reporting authority.
Decision Making
- Based on the report and records, the authority may either approve the compounding or reject it (after hearing the applicant).
Payment and Immunity
- Upon acceptance, the applicant must pay the compounding fee within 30 days.
- Immunity from prosecution is granted upon compliance.

Conditions for Withdrawal of Immunity

Trigger	Outcome
Failure to pay compounding amount	Immunity stands withdrawn
Violation of terms and false records	Immunity can be revoked and prosecution reinstated

Official Form – What Applicants Must Submit

Product name and composition
Manufacturer/importer/marketer details
License and registration information
Sample collection/test report dates
Offence details and charge sheet, if any
Declaration and verification by the applicant

Legal and Industry Implications

Introduces regulatory clarity for offences under the Drugs and Cosmetics regime.
Encourages voluntary compliance by allowing offences to be settled outside court with due process.
Reduces litigation burden on drug control authorities and the judiciary.
Acts as a model for similar reforms across allied regulatory frameworks like Medical Devices and Cosmetics.

Conclusion

The Drugs and Cosmetics (Compounding of Offences) Rules, 2025 herald a forward-looking regulatory step balancing compliance enforcement with judicial economy. Businesses in the pharmaceutical and healthcare ecosystem must update their legal protocols to leverage the benefits and ensure proper representation before the Compounding Authority.

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Source: MoHFW

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