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Besides making efforts for promoting the pharmaceutical industry in India with the help of the PLI Scheme the Government is inducing the controversial rule of holding marketers responsible for the quality of products along with manufacturers of products. A specific agreement for marketing format is to be done before manufacturing any pharma product.
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Agreement For Marketing Format
According to the Ministry of Health and Family Welfare of the Central Government by The Gazette Notification bearing no. GSR No. 101 (E) dated 11-02-2021 issued under the Drug and Cosmetics Act Rules, 1945 & the Drugs and Cosmetics Act, 1940 amended and inserted certain new Rules for “AGREEMENT FOR MARKETING” with effect from 01st March 2021.
There are some insertions of new rules in the 84C, 84D, and 84E, and 96 with new clause(s).
According to rule 84 D “ Agreement for marketing.- No marketer shall adopt any drug manufactured by another manufacturer for marketing of such drug by labeling or affixing his name on the label of the drug with a view for its sale and distribution without an agreement as referred to in clause (ea) of rule 2.”
Now the third-party manufacturing of pharmaceutical products is not allowed without the furnishing of an “Agreement for marketing format”.
According to rule 84 E, every marketer is responsible for the quality of the product along with the manufacturer. The marketer will be liable to regulatory compliance to submit the documents demanded by the drug authorities at the time of any sample failure or sample lifting.
The manner of the rule is- “84E. Responsibility of the marketer of the drugs.- Any marketer who sells or distributes any drug shall be responsible for the quality of that drug as well as other regulatory compliances along with the manufacturer under these rules.”
There is a new clause is inserted in the said rule 96 where already xii sub-clause(s) exist, now after sub-clause(xii) new sub-clause (xiii) is inserted that is defined as-
“(xiii) The name of the marketer of the drug and its address, in case the drug is marketed by a marketer:
Provided that if the drug is contained in an ampoule or a similar small container, it shall be enough if only the name of the marketer is shown.”.
Agreement for Marketing Format for Pharma Manufacturing
AGREEMENT FOR MARKETING
This Agreement (“AGREEMENT FOR MARKETING”) is made on the ________ Day of March 2021 and will be effective from 1st March 2021.
In between
[XYZ PHARMACEUTICALS], (hereinafter referred to as “Marketed By”) which expression shall unless repugnant to the context or meaning thereof be deemed to mean and include its successors, permitted assigns, marketed by divisions, subsidiaries, godowns and associate firms.
AND
[M/s ABC PHARMA,] a COMPANY having its business place at [COMPLETE ADDRESS OF MFG] (hereinafter referred to as “Manufacturer” which expression shall unless repugnant to the context or meaning thereof be deemed to mean and include its successors, permitted assigns.)
Now This Indenture Witnesseth as follows: –
1. The Ministry of Health and Family Welfare of the Central Government by The Gazette Notification bearing no. GSR No. 101 (E) dated 11-02-2021 issued under the Drug and Cosmetics Act Rules, 1945 & the Drugs and Cosmetics Act, 1940 amended and inserted certain new Rules for “AGREEMENT FOR MARKETING format” with effect from 01st March 2021. Hence this agreement.
2. The name of the manufacturer with the complete address and manufacturing drug license details will appear on all the goods supplied by the manufacturer.
3. The name of the marketer as “Marketed By” with a complete address will appear on all the goods supplied by the manufacturer. The “Marketed By” has to maintain such address as mentioned on the products and ensure that any communication addressed to such place as mentioned on the product is duly received and should not be refused &/or undelivered for any reason. In case of refusal / non-delivery of any communication, the address on which the invoice is raised by the manufacturer to such “Marketed By” will be treated as the address of the “Marketed By” for all purposes.
4 The “Marketed By” shall be solely responsible in respect to the Trade Marks/brand name (s) (TM Registered, Unregistered brand name, company name, and logo) / pack design/artwork/color pattern and promotional materials adopted by the “Marketed By” on “the goods” and will be the property of “Marketed By” only, if any of the brand name/pack design/artwork/color pattern of the goods clash with any other company “[MANUFACTURE’S NAME]..” will discontinue the manufacturing of the disputed product & only “Marketed By” shall be responsible for any violation of the guidelines of Drug Act / Trade Mark Act 1999 & Design Act / Copy Right Act.
5. Any Drug/FDC recall (If banned), Expiry of any Drug, and its disposal under Pollution norms is an Exclusive Responsibility of “Marketed By” only. The Manufacturer will not be responsible for expired goods and their disposal under any circumstances.
6. Since Drug Price Control Order is in force, any claim arising due to the Drug Price Equalization account the same shall be payable by “Marketed By” only.
7. Manufacturer shall supply Drug Products to “Marketed By” as per mutually decided terms against the Confirmed Purchase Order of the “Marketed By”. Quality of molecules will be the responsibility of the Manufacturer but to maintain storage conditions as per the Label Claim as endorsed on supplied products till the shelf-life as endorsed on such Drugs including any deterioration due to chipping/crushing/transit damage and from excessive heat/moisture/seepage/leakage conditions is the sole responsibility of the “Marketed By”. The manufacturer will not be held responsible for any deterioration due to chipping/crushing/transit damage and from excessive heat/moisture/seepage/leakage conditions under any circumstances.
8. The Drugs and Magic Remedies (Objectionable Advertisements) Act, 1954 Provisions that advertising any Product/Brand in Indian Market will be exclusively the responsibility of the “Marketed By”.
9. “Marketed By” will be liable to bear the cost of packing material, one-time development cost, and inventory and during switching off products and required to settle and pay such cost to “[MANUFACTURER’S NAME]. as per mutually agreed terms.
10. This Agreement is valid for a period of 3 years. Thereafter this agreement stands renewed for a further period of 3 years. However, this agreement can be terminated by either party by giving a notice of a minimum of 90 days during the existence of this agreement.
11. In case of any dispute between parties, the competent court will be at [DISTRICT COURT OF MANUFACTURER’S AREA] with the exclusion of any other court in India.
IN WITNESS WHEREOF both the parties have put their respective signatures or Authorized Signatory through a resolution to this agreement on this day in the presence of witnesses.
“Marketed By” “Manufactured by”
Address Address
Authorized Signatory Authorized Signatory
In the presence of two witnesses,
1. __________________________ 1. __________________________
2. __________________________ 2. __________________________
FREQUENTLY ASKED QUESTIONS
Q- What is the date effective of the Agreement for marketing?
ANS-The agreement for marketing format will be effective from 1st March 2021 for all manufacturing and Marketers in India.
Q-Does the Marketer is responsible for the quality of products after 1st March 2021?
ANS-Yes, As per new amendments in Rule 84 E of the drugs and Cosmetic Act 1945 now marketers will be
responsible for the quality of products as- the “Responsibility of marketer of the drugs.- Any marketer who sells or distributes any drug shall be responsible for the quality of that drug as well as other regulatory compliances along with the manufacturer under these rules.”
Q-How will a marketer be responsible for the quality of products in Pharma?
ANS-The marketer can be held responsible for the quality of products in such conditions including any deterioration due to chipping/crushing / transit damage and from excessive heat/moisture/seepage / leakage conditions is the sole responsibility of the “Marketed By”. There will need a proper proof that the product converted into sub-standard drugs due to the mishandling of “marketed by” rather than manufacturers.
Q-Who will be responsible for the DPCO claims?
ANS-If the higher MRP is inserted on the request of the “Marketed by” then the Marketer will be responsible according to the new “Agreement for Marketing” but the manufacturer can not be ruled out from the legal action by NPPA. The Agreement for Marketing is a mutual agreement between Manufacturer and Marketer, there is not any meant to relieve from the Laws of NPPA.
Q-Does advertisement of Pharmaceutical products violate the law?
ANS- According to The Drugs and Magic Remedies (Objectionable Advertisements) Act, 1954 Provisions if advertise any Product/Brand in the Indian Market that will be against the Rule of Drugs and Cosmetic Act, any prescription medicines can not be advertised for self-medication.
Q-What should be the stamp paper value for the Agreement for Marketing?
ANS-The Agreement for Marketing format should be furnished on a minimum Rs.100 Stamp paper.
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References:
- THE GAZETTE OF INDIA: EXTRAORDINARY, G.S.R. 101 (E), 11th February 2020
- Central Drugs Standard Control Organization/ACTS AND RULES