Checking the pulse – Recent legal developments in the Indian healthcare and pharma sector

In recent months, India’s healthcare, pharmaceutical, and medical devices sectors have witnessed continued regulatory and policy developments aimed at strengthening patient safety, enhancing regulatory oversight, and promoting greater efficiency across the healthcare ecosystem.

Key developments include measures to strengthen the regulatory framework governing pharmaceutical products, clarifications on the regulatory pathway for new drugs undergoing global clinical trials and expanded licensing requirements for the manufacture of drugs for testing and analysis. Policymakers have also proposed reforms relating to pharmaceutical patent examination, prescription medicine surveillance, and the affordability and accessibility of Ayush treatments. The medical devices sector has also seen regulatory developments on the concerning sterilisation, testing requirements, clinical investigation exemptions and quality management systems.

Judicial developments have further clarified the scope of regulatory and procedural compliance under healthcare and pharmaceutical laws, including the requirements of natural justice in regulatory enforcement proceedings, the jurisdiction of drug regulatory authorities, statutory timelines for drug testing, and the basis for imposing individual liability in drug-related prosecutions.

In this edition of ‘Checking the Pulse’, we examine key policy, regulatory, and judicial developments in India’s healthcare, pharmaceutical, and medical devices sectors from August 2026 to September 2026.

1. MoHFW extends form 29 requirements to additional drug manufacturing licences

On August 6, 2026, Ministry of Health and Family Welfare (“MoHFW”) notified the Drugs (Twelfth Amendment) Rules, 2026 (“Twelfth Amendment”), amending the Drugs Rules, 1945 (“Drugs Rules”). The Twelfth Amendment amends rule 89 of the Drugs Rules, which prescribes the requirements for the manufacture of drugs solely for the purposes of examination, testing or analysis. [1]

Under rule 89 of the Drugs Rules, a license under Form 29 is required for the manufacture of a drug specifically for examination, testing or analysis, rather than for commercial sale or distribution. Previously, rule 89 of the Drugs Rules referred to licenses issued in Forms 25 and 28, which are the licences prescribed for the manufacture of drugs for sale or distribution. The Twelfth Amendment expands this reference to expressly include Forms 25A, 25F, 28A, 28B, 28D, 28DA, 28E and 28F. These forms relate to various categories of drug manufacturing licenses, including those applicable to specialized medicines, vaccines, biological products and blood-related products.

The Twelfth Amendment therefore broadens and clarifies the categories of manufacturing licences to which the Form 29 requirement applies when drugs are manufactured for examination, testing or analysis. Manufacturers undertaking such activities for products covered by the newly specified forms will accordingly need to consider the Form 29 licensing requirement under the amended rule 89 of the Drugs Rules.

2. Central drugs standard control organisation clarifies regulatory pathway for new drugs undergoing phase III global clinical trials

On August 10, 2026, the Central Drugs Standard Control Organization (“CDSCO”) issued a clarification regarding the regulatory process for applications seeking permission to import and market new drugs that have not yet been approved in any country, but are undergoing or have completed phase III global clinical trials (“GCTs”) involving Indian participants (“GCT Notification”). [2]  Phase III clinical trials are large-scale studies conducted to evaluate the safety and efficacy of a new drug in a larger patient population and are generally undertaken before a drug is made available for wider use.

Under the New Drugs and Clinical Trials Rules, 2019 (“NDCT Rules”), separate regulatory pathways apply to investigational new drugs and to drugs that have already received approval in other jurisdictions. However, the regulatory route for drugs that remain unapproved globally despite the conduct or ongoing conduct of phase III GCTs involving Indian participants was not expressly clarified. 

The GCT Notification addresses this gap. CDSCO has clarified that  applications relating to such drugs will require a detailed evaluation of clinical and non-clinical data in accordance with the NDCT Rules and will be examined by the Investigational New Drug Division of CDSCO. 

The clarification provides greater certainty regarding the applicable regulatory pathway for products that are still under global development and have not yet obtained approval in any jurisdiction. It also enables sponsors and applicants to identify the appropriate division and review process for seeking marketing approval in India.

1. Parliamentary panel suggests steps to make Ayush treatments more affordable 

On August 7, 2026, the department-related Parliamentary Standing Committee on Health and Family Welfare (“Committee”) presented its 176^th report on ‘Affordability and Accessibility of Healthcare Facilities in Public and Private Sector’ (“Report”). [3]  The Report sets out several recommendations aimed at improving the affordability and accessibility of ayurveda, yoga and naturopathy, unani, siddha and homoeopathy treatments (“Ayush”).

The Committee recommended that the Ministry of Ayush (“MoA”) should mandate pharmacoeconomic studies for widely prescribed Ayush formulations. These studies evaluate the cost of a treatment against the health benefits it delivers, thereby helping assess its cost-effectiveness.

The Committee also recommended that the MoA expedite the finalization and implementation of revised guidelines for insurance coverage of Ayush treatments. Additionally, it recommended the introduction of uniform and standardized reference rates (“Benchmark Rates”) for recognized Ayush therapies, which insurers could use when assessing and settling claims. According to the Committee, the use of Benchmark Rates could help reduce out-of-pocket payments by patients and promote greater consistency in the settlement of insurance claims.

These recommendations are aimed at addressing both the direct cost of Ayush treatments and the availability of insurance coverage for such treatments, with a view to improving their overall accessibility to patients.

2. Controller general of patents, designs and trade marks releases draft pharma patent examination guidelines 2026

On September 4, 2026, the Office of the Controller General of Patents, Designs and Trade Marks (“CGPDTM”) released the Draft Guidelines for Examination of Patent Applications in the Field of Pharmaceuticals, 2026 (“Draft Guidelines”). [4]

The Draft Guidelines supplement the existing 2014 guidelines and provides further guidance for examining patent applications relating to pharmaceutical products. It covers issues such as novelty, inventive step, product-by-process claims, Markush claims and section 3(d) of the Patents Act, 1970. In this regard, a Markush claim is a patent claim that covers a group or range of related chemical compounds by describing their common chemical structure or characteristics, rather than listing every individual compound separately. 

Further, the Draft Guidelines also provide a structured approach to assess novelty, which provides seven steps for patent examiners to determine whether an invention is genuinely new (“Seven Stambha Approach”). The Seven Stambha Approach involves: (a) understanding the scope of the claims and identifying what is being claimed; (b) identifying the relevant prior art or earlier disclosures; (c) determining whether the claimed invention was expressly or implicitly disclosed in the prior art; (d) comparing the claimed invention with the relevant prior disclosure; (e) identifying the differences, if any, between the prior disclosure and the claimed invention; (f) assessing whether the claimed invention is anticipated by the prior disclosure; and (g) recording the reasons and arriving at a conclusion on whether the claimed invention is novel.

3. MoHFW proposes CCTV surveillance at premises supplying prescription medicines

On September 8, 2026, the MoHFW issued a draft notification proposing amendments to the Drugs Rules to mandate closed-circuit television (“CCTV”) surveillance at licensed premises where drugs are supplied on the prescription of a registered medical practitioner, other than by way of wholesale dealing. [5]  To give effect to this requirement, the draft proposes to introduce rule 65(2A) in the Drugs Rules, under which such CCTV systems would be required to be installed and maintained in a manner that enables the supply of prescription medicines at the premises to be verified. The recordings would also be required to be retained for a minimum period of 3 (three) months.

The proposal follows the Drugs Consultative Committee’s (“DCC”) recommendation in March 2026 to make CCTV surveillance at medical stores mandatory. The recommendation arose in the context of concerns regarding unauthorized access, misuse and diversion of prescription medicines, particularly among children and adolescents. The DCC had considered the ‘National Commission for Protection of Child Rights’ Joint Action Plan’ on prevention of drug and substance abuse among children, which identified the need for stronger monitoring of the sale of medicines that may be misused.

1. MoHFW notifies new rules simplifying sterilisation and testing requirements for medical devices 

On August 14, 2026, MoHFW notified the Medical Devices (Second Amendment) Rules, 2026, (“Second Amendment”) which amend the Medical Devices Rules, 2017 (“MD Rules”) [6] . The Second Amendment introduces new requirements for outsourced sterilisation of medical devices and prescribes fees for certain tests and evaluations. 

One of the key amendments relates to outsourced sterilisation, under which a manufacturer may engage another licenced facility to sterilise a medical device and render it free from harmful microorganisms prior to use. Under the amended rule 44 of the MD Rules, where sterilisation is carried out by another licenced facility, the licence number of the sterilisation facility must be specified on the device label. This requirement will come into effect 6 (six) months from the date of the notification, providing manufacturers with a transition period to update their labels and packaging accordingly.

2. European Union countries included in medical device regulatory exemptions 

On August 14, 2026, the MoHFW notified the Medical Devices (Third Amendment) Rules, 2026 (“Third Amendment”), [7]  amending the MD Rules. The Third Amendment, among other things, expands the countries covered under certain regulatory exemptions for medical devices and introduces clarifications relating to quality management systems (“QMS”).

The Third Amendment also amends rule 63 of the MD Rules, which governs the permission to import or manufacture medical devices that do not have a predicate device. Under the fourth proviso to rule 63(1) of the MD Rules, submission of clinical investigation results is not required in certain cases. This exemption applies where the investigational medical device has been approved by the regulatory authorities of the United Kingdom, United States, Australia, Canada or Japan and has been marketed in the relevant country for at least 2 (two) years, subject to the  prescribed conditions. [CI1] The Third Amendment extends this exemption to European Union (“EU”) countries, thereby allowing eligible medical devices approved by the relevant EU regulatory authorities to avail of the same waiver from submission of clinical investigation results, subject to satisfaction of the prescribed conditions.

The Third Amendment also introduces QMS requirements in the context of the functions of government medical device testing laboratories under rule 19H and rule 19J of the MD Rules. QMS refers to the system of processes, procedures and controls adopted by a manufacturer to ensure that medical devices consistently meet applicable quality and safety requirements. The Third Amendment clarifies that, while carrying out their functions, such laboratories are required to take into account both the applicable standards and the relevant QMS requirements. 

1. Bombay High Court sets aside FDA licence cancellation for procedural default and violation of natural justice

On August 29, 2026, the Bombay High Court, in a petition filed by Cipla Pharma & Life Sciences Limited (“Cipla”) against the Maharashtra Food and Drug Administration (“FDA”), criticised the FDA for acting in an unreasonable manner when it cancelled the drug sale licence of Cipla’s carrying and forwarding facility in Pune, with effect from August 27, 2026. [8] 

The action followed an inspection of the facility, during which the FDA alleged irregularities relating to the packaging, storage and recall of certain tablets. The inspection reportedly identified promotional wording on the packaging of a Schedule H drug, as well as discrepancies between the stock records and the physical stock maintained at the facility. Based on these observations, the FDA proceeded to cancel Cipla’s drug sale licence with effect from August 27, 2026.

Cipla submitted that, by an email dated August 26, 2026, the FDA had called upon it to appear for a hearing on the same day, which was a public holiday in Maharashtra. Cipla therefore sought an adjournment on the ground that it was unable to arrange for a representative to appear. The FDA nevertheless proceeded to pass the cancellation order on the same day. While the FDA contended that the applicable law did not confer a statutory right of hearing on Cipla, the Bombay High Court found that the manner in which the cancellation proceedings had been conducted was inconsistent with the principles of natural justice, particularly the requirement to provide a meaningful opportunity to respond before taking adverse action. 

Following the observations of the Bombay High Court, the FDA told the bench it would withdraw the cancellation order forthwith and issue a fresh show-cause notice, after which a reasoned order would be passed. The ruling provides Cipla interim relief but does not determine the merits of the alleged irregularities. The FDA retains the authority to reconsider the alleged irregularities and decide afresh once the company has had an effective opportunity to respond. For licence holders and regulators alike, the case is a reminder that even where a statute is silent on a hearing, a licence cannot be cancelled without a fair opportunity to be heard. Notices should allow a realistic time and date for response, and a reasoned order should follow.

2. Supreme Court upholds Himachal Pradesh High Court Ruling on drug regulation 

On September 15, 2026, the Supreme Court of India dismissed the Union Government’s special leave petition against the Himachal Pradesh High Court’s (“HP High Court”) judgement in M/s Salus Pharmaceuticals & Ors. v. Union of India, thereby upholding the HP High Court’s findings. [9]  The HP High Court’s judgement is significant for pharmaceutical manufacturers as it emphasises the importance of jurisdictional and procedural compliance in proceedings arising from not of standard quality (“NSQ”) findings under the Drugs and Cosmetics Act, 1940 (“Drugs Act”).

The HP High Court held that in relation to offences concerning the manufacture, sale and distribution of drugs under Chapter IV of the Drugs Act, the relevant executive powers primarily vest with the State Licensing Authorities, and that a CDSCO Drug Inspector cannot exercise such powers unless specifically authorised under the applicable statutory framework. 

The HP High Court further held that a prosecution or approval by the Drugs Controller General of India cannot, by itself, cure a fundamental lack of statutory authority. The HP High Court also emphasised the mandatory nature of the 60 (sixty) day timeline under rule 45 of the Drugs Rules for government analysts to complete testing and issue their reports. Unexplained delay in testing or communicating an adverse report may prejudice the manufacturer’s statutory right under section 25 of the Drugs Act to challenge the report through re-testing and, where such right is effectively lost, may affect the sustainability of the prosecution.

The judgement also addressed the vicarious liability of directors, partners and other individuals in drug-related prosecutions. Relying on section 34 of the Drugs Act, the Court observed that merely naming an individual as a director or partner is insufficient; the complaint must contain specific allegations demonstrating that the individual was in charge of and responsible for the conduct of the company’s or firm’s business at the relevant time. Accordingly, where qualified technical personnel are specifically identified in the manufacturing licence, the prosecution must still establish the individual involvement or responsibility of other persons sought to be prosecuted. The judgement therefore underscores that, upon receipt of an NSQ notice or show-cause notice, manufacturers should assess not only the substantive quality allegation but also the authority of the inspecting officer, compliance with statutory timelines, preservation of re-testing rights and the basis for imposing individual liability.