TYPED COPY

Final Report of the Committee

Set up to determine

The reasons for the suspension of the manufacturing licenses of

CRI, Kasauli, PII, Conoor

And

BCGVL, Guindy

And to draw the road-map for the revival of the three Unis

September, 2010

Contents

S.No. Section Page No.1. Background 4 – 72. Deliberations of the Committee 7 – 103. Process Followed in Government in Suspending Licenses 10 – 144.1 Committee’s Observations on the Process Followed 14 – 154.2 154.3 164.4.1 Issues Relating to WHO 16 – 204.4.2 Span of Indian GMP Norms 20 – 254.4.3 Due Diligence in Examination of Issues 25 – 294.4.4 Purpose of Notifying GMP standards 29 – 314.4.5 Role of DGHS 32 – 334.4.6 National Health Security 34 – 354.4.7 Evaluation of Public Interest 35 – 375. Impact of Closure on the UIP 37 – 396. Revocation of Suspension 407. Upgradation of Public Sector Vaccine / Sera Units 41 – 428. Organizational Restructuring 42 – 439. National Vaccine Security Advisory Board 43 – 4410. Summary 44 – 53

Annexure Annexure A Summary of the points made by the Former Health Minister

before the Committee

54 - 55

Annexure B Note dt. 13.9.10 submitted to the Committee by Director

General, DGHS

56 - 57

Annexure C Chronological Account of Process of File No. X –

11026/1/2006-D

58 - 61

Annexure D Chronological Account of Process of File No. X –

11026/1/2006-D (pt. File)

62

Annexure E Chronological Account of Process of File No. M –

11035/3/06/EPI

63

Annexure F Note of Dissent by Vineet Chowdhury – Member Secretary –

Para 4.4.3.9

64

Annexure G Supply of Vaccines from Public and Private Sector

manufacturing Units in the Period 2004-05 to 2009-10

65-67

Annexure H Installed Capacity of Primary Vaccine Manufacturing Units in

Public and Private SectorsAnnexure I Universal Immunization Programme – Achievements for the

Period 2008-09Annexure J Universal Immunization Programme – Achievements for the

Period 2009 – 10

70

Annexure K Plan Allocation and expenditure in PII,Conoor & CRI,

Kasauli & BCGVL Guindy Between 1995 – 96 and 2009 – 10

71

Annexure L Additional points by Dr. VM Katoch (Member Committee) 72 – 73

Final Report of the Committee set up to determine the reasons for the suspension of the

manufacturing licenses of CRI, Kasauli, PII, Conoor and BCGVL, Guindy, and to draw the road-

map for the revival of the three Units.

I. Background

A Committee to enquire into the captioned issue was set up by an order of the Ministry of

Health and Family Welfare dated 25.9.09. The composition of the Committee was as

under:

i. Shri Javid Chowdhury, Former Secretary, Ministry of Health and Family

Welfare Chairman.

ii. Dr. VM Katoch, Secretary, Department of Health Research – Member

iii. Dr. RN Salhan, Former Additional DGHS – Member

iv. Mrs. Shakuntala D. Gamblin, Joint Secretary, Dept. of Health and Family

Welfare – Member Secretary.*

* Since transferred and replaced by Shri Vineet Chaudhury, Joint Secretary,

Dept. of Health and Family Welfare

The terms of Reference of the Committee were as under:

i) To review the reasons for suspension of the manufacturing licenses of the three

institutes, namely, Central Research Institute, Kasauli, Pasteur Institute of India,

Conoor, and BCG Vaccine Laborary, Guindy.. Chennai from the historical,

technological, administrative organizational and other perspectives:

ii) To review the road map for the revival of CRI, Kasauli, PII, Conoor and BCG,

Guindy to make them Good Manufacturing Practices (GMP) complaint.

At an early stage of its deliberations the Committee came to the conclusion that with the

abrupt closure of the public sector manufacturing units. Vaccine Security and

consequently Public Health Security of the country, had been dealt a severe blow. In view

of this, the Committee submitted an Interim Report on 5 th Feb. 2010, with certain

suggestions, which in its opinion required urgent action on the part of the government.

The Committee is very happy to note that the government accepted several of the

recommendations and effected the suggested changes through consequential orders.

The significant recommendations that have been adopted and implemented by

government include:

(i)

(ii) Revocation of the suspension of the manufacturing licenses of the three Units

i.e. restoration of these licenses in response to the appeals filed by the units

under Rule 85(3) of the D&C Rules:

(iii) Release of the finished products that were impounded consequent upon the

suspension of the licenses, for use under the UIP before their date of expiry.

(iv) Authorization of the management of the units to restart the renovation / up-

gradation of the existing production lines, and, the release of adequate funds to

keep these works moving smoothyly.

(v) Grant of formal approval to the units to initiate action to set up new production

lines at the existing sites.

The Interim Report of the Committee noted that it will require more time to study and

arrive at its conclusions on the full span of the terms of reference. Specifically, the

Committee in this Final Report will be looking at the term of reference relating to the

reasons for the suspension of the manufacturing licenses from the historical,

technological, administrative / organizational and other perspectives.

The Interim Report set out the background to the ‘Vaccine Availability’ scenario existing

in the country. This account, inter alia covered: (i) the use of primary and other vaccines

in the health sector; (ii) primary vaccine coverage under the UIP; (iii) the vaccine

manufacturing units in the country, in both public and private sectors; (iv) the installed

capacity for the different vaccines in the three manufacturing units under review of this

Committee; (v) the extant GMP standards for vaccines / sera under Schedule M of the

D&C Act; (vi) the authority of the Central / State Governments to carry out inspections

of licensed drugs and pharmaceuticals manufacturing units under Rule 85 of D&C Rules

for non-compliance with any of the rules or other legal provisions. The Committee does

not consider it necessary to repeat the details of the background information in this Final

Report. Interested readers may refer to paras 1.1 to 1.5 of the Interim Report.

The DCGI, through its authorized inspectors, from time to time, on a rotational basis,

inspects the manufacturing units. The inspection staff available to the DCGI for carrying

out this function is very limited (40 drug inspectors) and consequently the number of

units inspected annually are limited – between the year 2004-05 and 2008-09 the number

has ranged from 775 to 1163 annually. In the year in which the public sector unit licenses

were suspended (year 2007-08), the number of inspections was 889. The three public

sector units were inspected by the NRA in years 2001, 2004 & 2007. In the year 2001 &

2004 the inspection was carried out exclusively by Indian inspectors authorized by the

DCGI. In the year 2001, WHO had asked to be associated with the inspection, but

permission was explicitly denied by the Indian Government. The position then taken by

the Ministry of Health and Family Welfare was that in the course of the inspection, the

NRA is discharging a sovereign function in which an international agency cannot become

a partner. In year 2004 the WHO was not associated with the Inspection. In year 2007 the

WHO again asked to be associated and the Ministry agreed to the request with the

approval of HFM.

In the year 2007-08 a joint inspection of the three public sector units was carried out

under Rule 78(d) of the D&C Rules by Indian inspectors authorized by the DCGI, along

with WHO nominated inspectors on the dates given below:

Table I

Name of Manufacturing Unit Date of Inspection Central Research Institute, Kasauli 13th – 14th Aug., 2007Pasteur Institute of India, Conoor 9th – 10th Aug., 2007BCG Vaccine Lab. Guindy 11th – 12 Aug., 2007

The inspection reports pointed out several shortcomings in the infrastructure and

operational systems of the units. Based on the deficiencies listed in the inspection report,

under the powers invested under Rule 85(I) the DCGI and CLAA under its letter N.X

11026/21/2006 dated 14.12.07 (identical number for all three units), directed the

manufacturing units to show cause within 10 days from the receipt of the notice why the

license granted to them should not be suspended / cancelled.

Consequent to that, the three manufacturing units, on the dates listed below, replied to the

show cause notices on:

Table 2

Name of Manufacturing Unit Date of reply to show cause noticeCentral Research Institute, Kasauli 4th Jan., 2008Pasteur Institute of India, Conoor 4th Jan., 2008*BCG Vaccine Laboratory, Guindy 27th Dec., 2007

In general, the manufacturing units in their replies furnished information on those items

listed as deficiencies that had been rectified, as also the likely time-line for the ones

requiring rectification over a longer time span. On receipt of these replies, the DCGI

again directed the inspectors to undertake another inspection to verify the reported

compliance by the units. The inspectors carried out the second inspections on the dates

mentioned hereafter:

* It is clarified that there is no error in this date – the fact is that the unit was inspected for the

second time before the representation had been sent by the unit against the show-cause notice.

Table-3

Name of Manufacturing Unit Date of Second InspectionCentral Research Institute, Kasauli 7th – 8th Jan., 2008Pasteur Institute of India, Conoor 3rd Jan., 2008*BCG Vaccine Laboratory, Guindy 4th – 5th Jan, 2008

The Reports on the second inspection carried out of the units in early Jan., 2008

confirmed the rectification of some of the earlier listed deficiencies, while listing other

deficiencies that were still to be rectified. However, it needs to be pointed that though the

Reports of the two inspections carried out in Aug., 2007 and Jan., 2008 mentioned

deficiencies, no inspection report recommended the suspension / cancellation of the

licenses.

2. Deliberations of the Committee

2.1.1 The Committee held eight sittings on 25th Sept. & 15th Oct., 2009 and 5th Jan., 13th May,

16th June, 12th July, 11th Aug., 16th Sept. 2010 – when it has had intensive discussions. At

the meeting held on 15th Oct., 2009 the Committee had the opportunity to meet Dr.

Surinder Singh, DCGI with whom it discussed the various circumstances and the

documents relating to the issue. Incidentally, it may be mentioned that Dr. Surinder Singh

was not the DCGI at the time of the suspension of the licenses. The Committee as a part

of its deliberations, visited the three manufacturing units to review the circumstances in

which the licenses were suspended, and to assess the possibility and time-line for re-

starting the manufacture in the existing production line, while concurrently upgrading the

manufacturing standards to as rigorous a GMP standard as is possible. During the

meetings, the members asked the Ministry / DGHS / DCGI to provide copies of various

relevant documents. The files that have been furnished are: F.No. X-11026/1/2006 – D: F

No. X – 11-26/1/2006 – D [pt. File] and F. No. M – 11035/3/06/EPI. The DGHS &

DCGI have given in writing that they have no other papers / files on the issue under

review. The Committee’s visit to the manufacturing units was to review the situation at

the site and to discuss the possibilities for future action with the staff of the units (CRI.

Kasauli – 21 – 23, Nov 2009; PII. Conoor & BCGVL, Guindy – 19 – 22 Dec., 2009).

Various items of information were also obtained from the management regarding the

functioning of their units. The Committee submitted an Interim Report on 5 th Feb 2010

making certain recommendation that in its judgment required immediate attention of the

government.

2.1.2 The Committee would like to record that it had decided not to invite, on its own initiative,

any individual involved in the process of decision –making, in the course of its

proceedings. The Committee was of the view that its status was that of a fact-finding

Committee carrying out an administrative inquiry on the basis of the official records.

Inviting witnesses would greatly widen the inquiry, and it would not even be possible to

exactly determine who to invite and who not to, in the limited time available to it.

2.1.3 In the course of the proceedings the Committee had learnt through the Member-

Secretary, that the former HFM/ the former Secy. (HFW) and the DCGI wished to appear

before this Committee – the Member Secretary was in touch with these individuals and

carried messages back and forth. The Committee had an open mind on the request

conveyed by the HFM/Secy. (HFW)/DCGI. However, on reflection, it was realized that if

the Committee on its own invited witnesses, its proceedings would become of the nature

of a Commission of Inquiry. It was assessed that something like twenty five witnesses

from all over the country (all the officials of the Ministry/DGHS/DCGI: the past and

present Directors of the manufacturing units, the heads of the various inspection teams

that carried out inspections of the units from time to time; etc) would have to be called,

which would be impossible in the limited time available to the Committee. After serious

reflection the Committee came to the consensus conclusion that no purpose would be

served by calling witnesses for oral evidence. The fact-finding inquiry being conducted

by the Committee was on an issue that necessarily had to be conducted in the official

documents – the relevant facts are all a part of the official record: no particular value

would be added to the inquiry by calling witnesses. In the circumstances, the Committee

decided not to call any witnesses, but if any individual on his own initiative indicated an

interest in interacting with the Committee, such a request would be considered.

2.1.4 It may be mentioned here that the former – HFM expressed a desire to meet the members

of the Committee. In response to this, the Committee met the former – HFM on 13.5.10,

when he presented his perception of the process adopted by the Ministry in examining the

issues relating to the GMP standards of public sector vaccine manufacturing units. A

summary of the points made by the former HFM in course of the meeting is placed at

Annexure A. The significant points were: no pharmaceutical / vaccine unit that is non-

compliant with the GMP is functioning today – two thousand units were shut down in his

time for non-compliance – exception could not be made in the case of public sector units;

decision was not a sudden one – was discussed over a long period with the officials; our

public sector units are nowhere near the standard of modern units in Europe and USA;

deficiencies had been pointed out in a series of inspections – what action was taken to

rectify them; the integrated vaccine park proposed at Chengallapattu would enable the

production of new vaccines and vaccine – combos; under the law, DCGI can take a

decision independently. The perceptions presented by the Former-HFM have been taken

into account by the Committee in coming to its conclusions in this Final Report.

2.1.5 The former-Secy (HFW) and the DCGI were individually informed of the Committee’s

position on the issue of hearing of individuals. The former-Secretary asked for a copy of

the draft Final Report in order to know the issues on which he should respond. He was

informed that, since he was not being called by the Committee, no issues would be raised

by the Committee on which a response was sought. Since the individual wished to come

on his own initiative, it would be for him to choose the issues to be addressed. Also, since

the proceedings of the Committee were not in the public domain, it would not be possible

to supply him a copy of the draft Final Report; in fact even the Final Report would have

to be submitted directly to the Ministry only. At the end of exchange of some messages,

the former Secretary (HFW) indicated that he will not be seeking a hearing.

2.1.6 A procedure similar to the one adopted for the former Secretary (HFW) was adopted to

ascertain the intention of the DGHS. The DGHS indicated that, instead of asking for a

hearing, he would be giving a written note on the subject. The DGHS has submitted a

note-dated 13.9.10 along with several enclosures, setting out his perception on the

process adopted for coming to a conclusion on the issue of the closure of the units. A

copy of DGHS’ note is placed as Annexure B to this Final Report. The enclosures are the

very same documents that had been submitted by the Ministry/DGHS/DCGI to the

Committee, and form the basis of the analysis contained in this Report. The points raised

in DGHS’ note have also been kept in mind in the course of finalization of this Report.

2.1.7 The Summary of the Committee’s observations as to the status of the existing units is

given location-wise in paras 2.2, 2.3&2.4 of the Interim Report. The current status of the

manufacturing units was the basis of the recommendation in the Interim Report for

revoking the order suspending the manufacturing licenses of the units. This

recommendation has been accepted by the government and the suspension of the

manufacturing licenses has been revoked on 26-2010. In view of this, the Committee

does not consider it necessary to repeat the findings of the inspections of the units in this

Final Report. Those readers interested in the findings of the inspections may kindly refer

to the relevant sections of the interim Report.

2.3. The Committee was of the view that some of the recommendations given in the interim

reports were of far-reaching importance. Considering the gravity of those

recommendations, the analysis relating to them in the Interim Report was rigorous and

the reasoning was given in detail. In respect of those issues the matter has come to a

close. However, in order to make the Final Report an integrated and coherent whole, the

significant sections of the interim report have been reproduced in this Final Report. The

Committee could have refrained from this, and could have merely given a reference to

the text in the Interim Report, as has been done in the case of some of the less significant

aspects. However, the Committee felt that the broad expanse of the terms of reference

entrusted to it covered vital issues relating to public health security, and it would be

desirable that the gamut of these issues be presented as a integrated whole in the Final

Report.

3. Process followed in Government in suspending Licenses

The final decision to suspend the licenses of the three units was taken by the DCGI after

seeking the comments of the Ministry of Health & Family Welfare. The Ministry, in turn,

examined the issue over an extended period of eight months. The Committee has made

strenuous efforts to gain access to all the files on which these issues came to be

discussed. According to the information made available to the Committee, the issues

were discussed in the following three files:

i) File No. X – 11026/1/2006-D: Chronological statement of

events on the file placed at Annexure ‘C’

ii) File No. X – 11026/1/2006-D: Chronological statement of

events on the file placed at Annexure ‘D’

iii) of File No. M – 11035/3/06/EPI: Chronological statement of

events on the file placed at Annexure ‘E’

The Chronological Statement of Events on File No. X – 11026/1/2006-D, placed at

Annexure B, indicates that the examination of the relevant issues began as far back as

April, 2007 and terminated on 14.12.07, when a view was reached to issue show cause

notices to the units for suspension of their licenses. The first note floated on 5.4.07 inter

alia, covered the following points: (i) Raised the question whether WHO should be

permitted to join NRA’s inspection of the public sector units: (ii) pointed out that WHO

expects all public sector units to comply with its GMP standards, and also all other WHO

pre-qualification requirements; (iii) pointed out that if the NRA is de-recognized by

WHO, private sector vendors, who otherwise comply with GMP standards would become

ineligible for empanelment and India’s exports will suffer; (iv) that in year 2002 WHO

was not permitted by government to join the NRA inspection as that would tantamount to

WHO exercising regulatory control over the NRA; and (v) to meet WHO’s requirements,

government will have to shut-down public sector manufacturing facilities, impact on

availability of vaccine on public health programmes would have to be assessed.

DGHS, to whom the file was marked, made no substantive comment before passing it on

to the line-up in the Ministry.

Secy, (HFW)* took a meeting on 3.5.07 where a tentative decision was taken to allow

WHO to join the NRA inspection. Consequent to that DCGI through his note dated

3.5.07 submitted the proposal for allowing WHO to join the NRA inspection for approval

of HFM. The Committee notes that the DCGI’s proposal did not give any reasoning for

departing from the earlier decision taken by government in year 2002 to not permit

WHO to join the NRA inspection. Also, DCGI’s note dated 3.5.07 did not raise the other

issues highlighted in his earlier note dated 5.4.07. HFM’s final order dated 10.5.07,

permitting WHO to join the NRA inspection was limited to that point only.

It appears from the subsequent record that Secy. (HFW) took a meeting on 11.9.07 to

discuss the connected issues. The Minutes of the meeting listed the following decisions:

(i) Public Sector units should wind-down operations by stopping procurement of raw

materials and production; (ii) the units urgently prepare a plan for setting up new

manufacturing facilities and (iii) efforts be made by the UIP Div. to build up buffer

stocks to meet possible shortages.

DCGI’s note also recorded the following decisions taken at a subsequent meeting chaired

HFM (i) Ministry should take up with WHO Hqs the need for a longer period for up-

gradation of the manufacturing facilities; a team of senior officers be sent to Geneva for

holding discussions with WHO officials; (ii) immediate steps to be taken to improve the

manufacturing facilities by renovation/setting up new facilities to comply with the

deficiencies pointed out by WHO; and (iii) the plan to set up an integrated Vaccine Park

at Chengallapattu be immediately drawn up.

This note of the DCGI was seen by DGHS on 25.10.07 no substantive comments were

offered by DGHS – the file was marked to the administrative division (JS [DP]) in the

Ministry.

From the administrative division, on 31.10.07 JS (DP) put up a note suggesting that

WHO be approached for grant of more time for the public sector units to rectify the

observed deficiencies in the GMP standards of the unit. The note also suggested that the

units be asked to expedite their action plans. In other words, JS (DP)’s note supported the

earlier note of DCGI.

At this stage, the action seems to have been shifted to F. No. X – 11026/1/2006 – D – (pt.

File) the chronological statement of events of which is given in Annexure D. It appears

that since no orders had been received on the main file, DCGI sent a fresh note dated

27.11.07 giving the background of the build up of the issues that now required urgent

attention.

* Whenever the expression HFM or Secy. (HFW) or DCGI is used in this report it means

the then HFM, the then Secy. (HFW) and the then – DCGI.

This note of the DCGI was see by DGHS on 25.10.07; no substantive comments were

offered by DGHS – the file was marked to the administrative division (JS [DP]) in the

Ministry.

The note of DCGI dated 27.11.07 mentions an earlier note put up on 20.10.07 giving the

principal findings of the draft / final report of the joint NRA-WHO inspection of the

manufacturing units. It appears from contextual references that some of the earlier notes

mentioned by DCGI are not available now. Every effort has been made to obtain

whatever is available in the Ministry/DGHS/DCGI offices. The Report of the Committee

is necessarily based on the documents made available by the Ministry/DGHS/DCGI. It

appears to the Committee that this confusion in the records is the result of chaotic

secretariat practices, there is no reason to believe that any relevant papers/files have been

intentionally withheld from the Committee. It is clear that the style of secretariat

functioning in the Ministry/DGHS/DCGI offices at that point of time was unsystematic.

The only explanation for the confusion in the notes is that several notes were floated from

the DCGIs office from time to time with the same file number, without mentioning that

these were part files. At some subsequent date these were merged together without

ensuring continuity of proceedings. As a result, there are anomalies in the sequence of

recorded proceedings as is evident from Annexure C.

DCGI’s note of 27.11.07 also contained a draft interim reply proposed to be sent to the

WHO, indicating that many of the deficiencies noted in their report had been rectified

and stating that the reply on the action proposed for the public sector manufacturing units

would follow. There is nothing on record to show that any letter was issued.

In Annexure C there is a mention of notes submitted on 3.12.07 and 6.12.07 reminding

the senior officers that an earlier file that had been submitted for orders, has not been

returned; and that a reply has to be sent to WHO before 5.12.07. The chronological list of

events in Annexure D shows that on 28.11.07, AS (DG) inquired about the plan of action

of the units for rectifying the short-comings and suggested that a letter be sent to DG,

WHO explaining the government’s point of view. In response to this, JS (BKP) put up a

note on 1.12.07 spelling the highlights of WHO’s inspection report and mentioning the

meeting taken by HFM on 11.9.07. He also asked for directions for adoption of one of the

two opinions (i) negotiate with WHO for more time for compliance (ii) move towards

gradual shut down of the units and make alternative arrangements for the UIP.

In response to this, As (DG) in turn, in his note dated 1.12.07 suggested the following

line of action : (i) that the units move towards gradual shut down; (ii) the Ministry move

towards setting up a new integrated vaccine unit; (iii) the Ministry take up the issue with

the DG, WHO during his ensuing visiting to Delhi.

Secy. (HFW) supported the proposed action of AS (DG) while at the same time making

some observations on the need to alter the organizational structure of the existing units.

Further on in this file on 13.12.07 the HFM recorded that he had discussed the matter

with Secy (HFW) and directed action be taken in terms of the discussion. From the

context of note, and the content of subsequent notes, it is beyond doubt that the HFM

approved the proposed line of action.

From Annexure C it appears that a meeting was taken by HFM on 13.12.07 to take a final

view on the question of issue of show-cause notices to the units for suspension of their

licenses. DCGI recorded a note on 14.12.07 listing the following views reached in the

abovementioned meeting taken by HFM (i) recommending the issue of show cause

notices to the units for suspension of the licenses for non-compliance with GMP

standards (ii) asking the units to draw up a time frame for rectification of the deficiencies

pointed in the WHO inspection (iii) making a presentation to the expert body of WHO

regarding India’s response to WHO’s report. This note was seen and signed by the Secy.

(HFW) on 14.12.07. Consequent to the view conveyed by the Ministry, DCGI issued

show case notices of No. X – 11026/1/2026 – D dated 14.12.07 for suspension of the

licenses till such time as the deficiencies were rectified.

As mentioned in para 1.8 the DCGI directed that inspections be carried out of the

rectifications mentioned in the representations of the manufacturing units. The Reports on

the second inspection of the units in early Jan 2008 confirmed the rectification of some of

the earlier listed deficiencies, while listing other that were still to be rectified. However, it

needs to be pointed out that, though the Reports of the two inspections carried out in Aug

2007 and Jan 2008 mentioned deficiencies, no inspection report recommended the

suspension / cancellation of the licenses. Subsequent to the receipt of the representations,

the DCGI suspended the licenses of the units under his order No. X-11206/1/2006-D

dated 15.1.08 for violations of the following two provisions:

(i) the untis were not maintaining adequate standard of premises, plant and staff as

required under Rule 78(a)(I) of the D&C Rules.

(ii) the GMP standards for manufacture of drugs as set out in Part I and Part I A

Schedule M of the D&C are not being followed as required under Rule 78(p).

When reviewing the recent history of the three public sector vaccine manufacturing units

one aspect kept that these units have received an exceptional degree of attention from the

regulatory authorities. Over the years, the units have been inspected by the state and

central drug control authorities time and again (BCG, Guindy (5/2001 to 2/2008) – 10

inspections: PII Conoor (10/99 to 3/2008) – 9 inspections and CRI. Kasauli (9/2002 to

1/2008) – 5 inspections). The NRA has itself inspected the units in 2001, 2004 and 2007.

While diligence in the regulatory duties is something which should be commended, it

must not take the shape where it is perceived that these units are particularly targeted.

There are over 10,000 drugs and vaccine/sera units in the country, out of which all at but

350 are in the small scale sector. DCGI has 40 drug inspectors under him who carry out

statutory inspections on his behalf. The number of inspections carried out by the central

drug inspectors in different years is as under:

Inspections carried out by Central Drug Inspectors

Year Number of Inspections2004-05 11632005-06 8472006-07 7752007-08 8892008-09 764

Under the law, the DCGI (CLAA) has jurisdiction over all drugs and pharmaceutical

manufacturing units in the country, including those categories for which the registration

powers are with the state governments. However, the DCGI has informed the Committee

that the central inspectors are carrying out inspections of only certain categories of items

– vaccines & sera. Large volume parenterals, notified medical devices, blood banks and

units applying for certificate of pharmaceutical products under WHO GMP Certification

Scheme. The Committee is surprised to note the role allotted to itself by the DCGI.

Though it has a supervisory responsibility over the entire range of drug manufacturing

units, it has withdrawn itself from the inspection of the drug units, except on request.

Considering that it has jurisdiction over 10,000 manufacturing units, the above table

reveals that a paltry number of manufacturing units were inspected. Given that in year

2007-08, the year in which the licenses of the public vaccine units were suspended, the

central inspectors only carried out 889 inspections, it is remarkable that the regulatory

authority found it possible to spare so much attention for the three public sector vaccine

manufacturing units.

4. Committee’s Observations on the Process Followed

4.1. As has been mentioned in passing in an earlier part of the Report, the process followed in

the Ministry in the course of decision-making on this issue, can only be called

unsystematic. In a public administration system, the fundamental principles of good

governance require that the record keeping of the decision-making process be clear. Only

then is transparency ensured in the process of governance, and only then is minimal

accountability achieved, as is required in governance.From the discussion of the process

adopted in this matter as analysed in the previous section of the Report, minimum

standards in this regard have not been maintained in the Ministry. If that had been

ensured, a plain reading of the file would have enabled one to understand the reasoning,

and ascertain the responsibility for the decision taken. The Committee observes that in

the matter under review here, it became necessary for it to carry out a mini-archival

research in order to determine even the sequence of events, not to talk of the rationale or

analysis of the issue involved. In this backdrop, the Committee is constrained to observe

that the Ministry of Health and Family Welfare had not maintained minimal secretariat

standards in the process of decision-making on the issue under review.

4.2. The relevant points that need to be analyzed before taking a decision on the closure of the

units, have not been explicitly stated anywhere in the Ministry’s notes. Looking at the

issues ab initio, the Committee is of the considered view that the following aspects

should have been considered in the course of taking a decision in the matter.

(i) Issues Relating to WHO

What is WHO’s role vis-à-vis that of the NRA in the matter of regulation of the

GMP standards for drugs and pharmaceutical units? Does WHO have a

supervisory jurisdiction over the Indian NRA to derecognize the NRA? Has the

WHO spelt out its position explicitly at any stage in regard to the GMP

compliance of Indian manufacturing units? Whey did the Ministry not take up

the issue with the DG, WHO, even though at several points in the notes, this line

of action was suggested?

(ii) Scope of Indian GMP Norms

Are Indian vaccine/sera manufacturing units required to conform to Schedule M

of the D&C Rules, or to the GMP norms of WHO? Does Schedule M of the

D&C Rules mandatorily require that the vaccine units ensure that the production

is strictly in uniflo and with a logical sequence of operations?

(iii) Exercise of Due Diligence by the Officials dealing with the Issue

Whether the dealing officials attempt to examine the various relevant aspects to

enable them to arrive at a decision in public interest? Whether the final decision

was on the basis of a reasoned analysis?

(iv) Purpose of notifying GMP standards

What is the fundamental purpose of statutorily notifying GMP standards for

drugs and vaccine/sera? Does a more stringent GMP standard necessarily ensure

a better product quality for the user? Has the Indian user of vaccines under the

UIP suffered in any way, whether in the long term or short term, by using

vaccines produced in public sector units that conformed to Indian GMP

standards rather than WHO GMP standards?

(v) Role of DGHS has the technical wing of the Ministry of Health and Family

Welfare the Directorate General of Health Services – adequately discharged its

role in advising the Ministry on this sensitive public health issue? Did the

Ministry involve the DGHS adequately?

(vi) National Health Security: Impact of the sudden closure of the units on the

Health Security of the country.

(vii) Evaluation of Public Interest: Was a comparison of the pros and cons of the

issue from the viewpoint of broad public interest carried out with due diligence?

4.3. A scrutiny of the records of the Ministry reveals that there was no systematic

identification of the issues and subsequent logical analysis of each of these aspects. Much

of the discussion on the files is extremely confused. There is some passing mention of

certain aspects, but these relate to the consequences if WHO de-recognizes the NRA.

Repeatedly, emphasis has been focused on the line that, if the NRA is derecognized, the

private manufacturers will be treated as ineligible for WHO pre-qualification as vendors.

The risk or damage to public interest resulting from closure of the public sector units has

never been considered; though, on a few occasions mention has been made that steps will

have to be taken to secure alternate sources of supplies for vaccines. In sum, it is the view

of the Committee that the Ministry (including the DGHS and the DCGI) did not carry out

a appropriately structured analysis of the sensitive issue under review. The discharge of

the responsibility of due diligence by the Ministry required that the various facets of the

issue be discussed in a simple structured manner so that the pros and cons were

transparent. The Committee is of the considered view that had this been done, the

Ministry would not have come to a decision to close the units in an abrupt manner.

4.4. The Committee will now record its perceptions, ad seriatim, on the various facts of the

issue of closure that have been listed in para 4.2 above.

4.4.1 Issues Relating to WHO

4.4.1.1 WHO is a highly regarded international organization in the Global Health Sector, India’s

association with it goes back to the time of independence. In the early years after our

independence, India was critically short of both financial resources and technical

expertise in the health sector. In those day, WHO’s assistance – both financial and

technical – went a long way in meeting the minimal requirement of health services in the

country. Over the years, both the financial resources available to the national health

sector and the local skilled human resources, have grown manifold. Though it is clear that

we are still a resource-deficit, developing country, the domestic resources are much more

now than what WHO can possibly provide by way of assistance. WHO has over the years

been hard-pressed for budgetary resources. Most of its budget is used for paying its

technical man-power. The annual allocation for the various field programmes funded by

WHO in India, would only be of the order of about Rs. 50 crores. As against this the

central government budget is itself of the order of Rs. 25,000 crores, while the state

budgets aggregate about Rs. 60,000 crores a year. Looking to these numbers, it is clear

that WHO’s contribution to service delivery in the health sector of India is miniscule.

However, there is still much that India can gain through an active association with the

initiatives undertaken by WHO. WHO is very influential in crafting the major policy

trends in the global health sector. Indeed, it is one of the few international organizations

that are not totally dominated by the developed countries of the first world. In the recent

past, WHO played a significant role in the Doha round of the IPR negotiations conducted

under the auspices of WTO. All of us in the developing world owe it a debt of gratitude

for influencing the trend of those negotiations, so as to provide comfort-space to

struggling countries to gain relief from some of the rigid IPR provisions, in the

eventuality of a national health emergency. All in all, it is the view of the Committee that

if it is very much in the interest of India to maintain a close working relationship with the

WHO to strengthen the voice of the developing countries in the global health sector. The

particular areas where the influence of this international organization could be of use to a

country like India are: setting normative commercial terms for pharma research:

prioritization of pharma research in neglected tropical diseases, sponsoring of pharma

research in the public domain to avoid patent restrictions advice in adoption of best

practices in health service delivery in different settings; etc. Given this backdrop, the

Committee is well aware of the valuable services provided by WHO, and has kept this in

mind while discussing in the next para the appropriate bi-lateral relationship between the

national government and the international agency.

4.4.1.2 As has been mentioned in the previous paragraph, the advice/information offered by

WHO-about improvement in product standards and technical processes, advancement in

treatment regimens and new diagnostics – is of immense value. However, in order to

maintain a harmonious working relationship, it is important to accurately demarcate the

boundary between the reach of WHO’s advocacy and the irreducible extent of exercise of

sovereign authority by the Indian government. It is known that the WHO has been

offering technical advice to the Ministry of Health and Family Welfare on GMP related

issues. However, no matter how useful WHO’s advice may be, the NRA’s sovereign

function under statute, of inspecting the manufacturing standards of drugs and

pharmaceutical units, cannot be discharged in partnership with international organization.

Under the D&C Act and Rules, the DCGI is the apex point of the Indian regulatory

system. This was the position taken by the government in year 2002 when it denied WHO

the permission to conduct inspections jointly with the NRA. The Committee recognizes

that it is within the competence of the Ministry to review a policy decision at a

subsequent point of time. Changing circumstances and national and international

developments, may necessitate that in the country’s interest. But the Committee is of the

view that any change in position of the government on a sensitive matter should be

agreed out in the notes in any analytical manner. It is seen that the decision taken by

HFM on 10.5.07, to permit WHO inspectors to be associated with the NRA inspection, is

on an opaque note stating that Secy. (HFW) has opined that we should not object to the

participation of WHO representatives in the NRA inspection. The note does mention that

in the past the Ministry has not agreed to this request from WHO. However, there is just

no analytical discussion as to why we should reverse the earlier position of the

government. This being a sensitive issue, the reasoning for the decision should have been

recorded explicitly. Once WHO came to be associated with the NRA inspection, their

view on the GMP standards became the dominant one. In this background, the committee

is of the view that the decision to permit WHO to join the NRA inspection was not taken

with the necessary degree of application of mind and accountability.

4.4.1.3 The Committee is aware that the WHO renders certain consultancy services by way of

procurement of drugs and pharmaceuticals for use in international programmes funded by

other multilateral agencies (UNICEF, WB, UNHCR). In the discharge of this function,

WHO can prescribe any norm considered appropriate in its judgment for pre-qualification

of vendors for supply of drugs and pharmaceuticals for the international programmes, so

long as its norms are not arbitrary. The functioning of the NRA has no nexus with any

inspection WHO may carry out on behalf of the international drugs/vaccine purchasers.

Independent inspection of the quality of manufacturing facilities is a common feature in

international trade a large number of countries proposing to import drugs and vaccines

from India routinely conduct independent inspection of the facilities of the vendors.

DCGI has also informed the Committee that WHO is periodically and independently

inspecting the private units in the country that are on WHO’s pre-qualified list of

vendors. However, the assertion which seems to have been made by WHO – that if WHO

was not permitted to inspect public sector manufacturing units (even if these had no

intention of applying for WHO’s pre-qualified vendor’s list), this would result in the de-

recognition of the Indian NRA, and would consequently render the private vaccine units

ineligible for listing on WHO’s pre-qualified vendor list – seems to be an arbitrary

conclusion. On the basis of what has been mentioned earlier, it is apparent to the

Committee that WHO does not exercise any supervisory authority over the Indian NRA.

Hence the question of de-recognition of the Indian NRA cannot arise. WHO would

naturally be entitled to make an independent assessment of the level of cGMP

compliance of those manufacturing units that apply for pre-qualified vendor listing with

WHO. Needless to say, the NRA in India can take a differing view on the status of

compliance for the very same units for its own purposes. However, it is the considered

view of the Committee that the eligibility of individual applicants should in no

circumstances be contingent upon whether public sector manufacturing units have been

inspected by WHO, or whether these public sector manufacturing units in the assessment

of WHO, meet its cGMP standards. Treating the eligibility of individual applicants as

contingent upon public sector units meeting eligibility standards, would clearly be

arbitrary.

Incidentally, it may be motioned that, after the view expressed in the above paragraph

had been incorporated in the interim Report, the issue of de-recognition of the NRA by

WHO seems to have been dropped and the Indian suppliers of vaccines to international

agencies have suffered no disadvantage.

4.4.1.4 The Committee is of the view that there is considerable confusion in the dialogue

between the Ministry of Health and Family Welfare and the WHO on the issue relating to

the GMP standards required to be achieved by public sector vaccine units. The WHO has

to bring out is position explicitly in writing at any time. The only mention of their

position is in passing notes of different Indian officials. These notes mention that WHO

has been insisting that, if India does not permit the inspection of public sector

manufacturing units, WHO will de-recognize the Indian NRA. Also, that if the Indian

NRA is de-recognized, no unit, including private units that otherwise are compliant with

the WHO GMP norms, will be eligible for listing as WHO’s pre-qualified vendors. The

only communication on record on this subject is a letter dated 17.5.06 addressed to the

HFM from the Additional Director General, WHO. This letter does not state that WHO

will de-recognize the Indian NRA if it is not allowed to inspect the public sector

manufacturing units, or if in their assessment the public sector manufacturing units are

seen to be non-compliant with WHO GMP norms. Clearly, the context of this letter only

relates to the requirements of eligibility for pre-qualified listing as vendors for purchase

relating to international programmes. The letter, however, does assert the view of WHO,

that India has followed dual GMP standards for vaccines with comparatively weak

enforcement of GMP for public sector units. By way of a caution, the letter does say that

there may be a major negative impact should the NRA assessment fail to meet the critical

indicators required for the WHO pre-qualification scheme. The Committee is of the view

that as a matter of administrative practice, in the normal course, the Ministry should have

obtained the position of WHO on this sensitive issue in explicit terms in writing. It is

considered to be imprudent for the Ministry to arrive at a decision on this important issue

merely on the basis of impressions and conjecture of some officials in the Indian

administration.

4.4.1.5 The Committee observes that in several notes on file, officials have suggested that the

issues be taken up at the level of DG, WHO so that the position of the Indian government

can be effectively put across. The specific suggestions for taking up the issue with DG,

WHO were made in the following listed notes; (i) JS (DP)’s note dated 31.10.07 in

Annexure C; (ii) AS (DG)’s note dated 28.11.07 in Annexure E; (iii) JS (BKP)’s note

dated 1.12.07 in Annexure D; (iv) AS (DG)’s note dated 1.12.07 in Annexure D. and (v)

HFM’s meeting on 13.12.07 recorded in DCGI’s note dated 14.12.07 in Annexure C.

While no one disagreed with this line of action, the suggestion was never perused. This

Committee had also recommended in its Interim Report that the Ministry may consider

taking up the issue with the DG, WHO, as the differences appeared to be on account of a

misunderstanding between the Ministry of Health and Family Welfare and the WHO.

While four of the Committee’s recommendations made in the Interim Report have been

accepted by the government and implemented, this particular recommendation does not

seem to have caught the attention of the Ministry. Even at the cost of repetition, the

Committee would again suggest that the Ministry may consider entering into a candid

dialogue with the DG of WHO so that the country’s position is clearly understood by the

WHO, and no unnecessary misunderstanding persists between the two.

4.4.1.6 For the reasons given in the earlier paragraphs, the so called de-recognition of the Indian

NRA by WHO, should not affect the eligibility of private manufacturers who otherwise

meet the norms for enlistment on WHO’s pre-qualified list of vendors. The Committee is

of the considered view that any decision by the WHO to de-recognize the Indian NRA,

for reasons that have been discussed, would be an extraordinary action on the part of the

organization. Such a move on the part of WHO would have far reaching implications on

the integrity of statutory institutions in sovereign nations. The Committee feels that any

move to consider private vaccine manufacturers (who are otherwise complaint with

WHO GMP norms) as ineligible because the WHO finds certain public sector units non-

compliant, would be illogical, arbitrary and discriminatory, as this has no nexus with the

objective of purchasing high quality drugs/vaccines produced under the best possible

GMP standards.

4.4.1.7 Despite having arrived at the above position on the question of de-recognition, the

Committee considers it necessary to address the worst-case scenario, one in which, at

some distant date, when even those Indian manufacturers that are compliant with WHO-

level GMP norms, are not included in the pre-qualified list of vendors. India has been a

growing exporter of drugs/vaccines under internationally funded relief programmes.

Exports of drugs and vaccines from the country under such programmes are of a value of

about Rs. 500 crores annually i.e. US$ 0.1 billion. Even if we hypothetically assume that

these exports run the risk of being discontinued, the impact will be nominal, as the value

of these exports is miniscule compared to the aggregate national export earnings of about

US 180 billion annually. In the perception of the Committee, the export earnings

foregone, if such an eventuality arises, would be insignificant compared to the gain

through enhanced vaccine security for the country over the long run.

4.4.2. Span of Indian GMP Norms

4.4.2.1 The Indian GMP norms of drugs and pharmaceutical are notified under the D&C Act and

D&C Rules. Over the last decade or so, WHO has been advising and encouraging

countries to align their GMP standards with their model GMP norms. After detailed

consideration over several years, on 11.12.01, the new GMP standards for vaccines / sera

was notified for India through an entirely new Schedule ‘M’ under the D&C Rules,

which were substantially congruent with WHO’s recommended norms. The new

standards came into force with immediate effect for new units; however, the notification

provided for a grace period for the existing units to upgrade their facilities and eventually

came to effect from 1.7.05.

4.4.2.2 The extant national GMP standards for drug /vaccine manufacture are largely identical to

the cGMP standards recommended by the WHO. The standards, inter alia, applicable to

vaccine/sera manufacturing units are set out in Part I and Part 1 A of Schedule M of the

D&C Rules. A perusal of this Schedule Reveals that it covers a vast array of

specifications that collectively impact on the quality of the manufacturing process. By

their number, nature and span of application, all these standards cannot be met to the

fullest extent by every manufacturing facility. Many of the standards are spelt out in

descriptive language, and an assessment of compliance would depend on the subjective

perspective of the individual making the evaluation. Also, legal compliance does not

require that each of the norms be individually met to the fullest extent, but rather than, the

overall compliance of the various norms should be adequate. A shortcoming in some of

the non essential / minor areas – need for re-configuration of production line; need for

smooth surfaces and dust-free junctions, corners and door-frames; defects in the animal

house; need for amendment of SOPs and new documentation; calibration of equipment –

does not automatically call for the suspension / cancellation of the license. To legally

carry out operations in India, the drugs and pharmaceutical units are required to

substantially comply with the standards set out under Schedule M of the D&C Rules,

subject to the monitoring /assessment of the NRA/DCGI.

4.4.2.3 To appreciate the approach required to be adopted in the enforcement of the GMP

standards given in Schedule M, it would be necessary to review, in brief, the historical

backdrop in which the drug industry has operated in the country. As a developing

country, India can be considered reasonably strong in the drugs and vaccine/sera sectors.

In the sub sector of generic drugs, we have a global reputation for production of high

quality and inexpensive generics. The vaccine / sera manufacturing facilities heirlooms

that have come our way. Two of our public sector vaccine manufacturing units are over a

century old, while the third one is over sixty years old. All three units have, what can be

called, an unmatched corpus of experience in the area of manufacture of vaccine/sera.

Here it may be mentioned that manufacture of vaccine/sera is not only an application of

technology/science, but it is also a quasi-art. The technical manpower in these units over

time has acquired, what can be called, a unique experience in this line of activity. The

private sector manufacturers of vaccines/sera in the country are relatively recent entrants

and the experience they draw upon is largely through the technical staff of public sector

units who are either retirees, or have been poached from public sector units. The vaccine /

sera supplied by the public sector manufacturers rigorously meet product standards

notified under the D&C Act and Rules – these units have had an unblemished production

record.

4.4.2.4 The key provision under Schedule M setting out the GMP standards in the production

area is: ‘The production area shall be designed to allow the production preferably in uni-

flow and with logical sequence of operations. ‘This is an over arching provision that sets

the backdrop for the other more specific norms. The language of this provision puts it

beyond doubt that production in uni-flow and with logical sequence of operations’ is a

desirable goal, but not a rigid mandatory requirement.

4.4.2.5 The notification of the rigorous GMP standards does not imply that all manufacturing

facilities that do not meet the standards to the fullest extent would in one stroke have to

be shut down. However, throughout the process of consideration of the issue on the

records of the Ministry, and the Inspection Reports, the underlying assumption has been

that the attainment of ‘uni-flo- of the operations in an irreducible, mandatory requirement

of the GMP standards. This approach is misconceived. These GMP standards are the

ultimate standards towards which we aspire, and these would have to be achieved through

progressive stages. It is not the intention of the law-makers to abruptly enforce these

standards on all manufacturing units with immediate effect, regardless of other

circumstances. It needs to be recognized the sudden-death approach to the

implementation of the GMP standards (which may be newly notified and subjectively

assessed) would serve no public purpose, it would only bring about a crisis, as the

operations of a larger portion of the domestic drug sector would come to a halt. About

95% of the domestic drug production units are in the small-scale sector. It would take a

decade or more for the units in this sector to become GMP-compliant to the fullest extent.

Through a package of progressive incentives and administrative hand-holding, these drug

units would have to be induced to improve manufacturing conditions. Looking to the

magnitude of the task involved, it would be a considerable time before the manufacturing

conditions in drug units would be anywhere close to the notified GMP standards as

interpreted to the ultimate extent. The Regulatory Authority, in exercising its judgment in

allowing units with various levels of compliance to GMP standards, subject to a minimal

level of compliance, should take a variety of factors into account. These factors would

include: the present manufacturing conditions, a realistic time-line for upgradation of

manufacturing conditions; harm to public interest resulting from a sudden drop in drug /

vaccine / sera availability; capacity of the manufacturing units to rigorously maintain

statutory product standards with their current manufacturing practices; irreducible needs

of national health security, etc.

4.4.2.6 At this stage the Committee would like to react to the issue raised in the letter dated

17.5.06 addressed to the HFM by the Additional Director General of WHO. This letter,

inter alia, makes the assertion that India is adopting dual vaccine standards in the matter

of vaccine supply with inferior quality products from the public sector units being used

under the UIP. The Committee has examined this issue very carefully and has come to

the conclusion that this perception is misconceived as it is not based on any acceptable

evidence. Different manufacturing units may have varying standards of GMP within a

range and yet all may meet the minimum compliance level of Schedule M acceptable to

the NRA. Vaccine/Sera manufactured in Indian public sector units are compliant with the

Indian GMP standard, and are also compliant with the notified product standard. Former

HFM, when he met the Committee on 13.5.10, also made a point in passing that supply of

vaccines from public sector units under UIP, would imply the use of inferior vaccines.

For the reasons spelt out in this para, in view of the Committee, such an apprehension is

unfounded.

4.4.2.7 A perusal of the three files relating to the issue of suspension of the licenses of the public

sector manufacturing units reveals that the examination has been carried out under an

impression that WHO exercises some type of supervisory jurisdiction over the Indian

NRA. Consequently, the entire examination process has borne the burden of the belief

that the conclusions of the inspection have to be agreed joint conclusions of WHO and

the NRA. As has been shown in the previous section of the report, the WHO inspection,

whenever it is carried out, would be only for the purpose of listing manufacturing units as

pre-qualified vendors, and the independent inspection of the NRA, under the authority of

the D&C Rules, would be to determine compliance with Indian GMP standards.

4.4.2.8 In the three files where the issue of suspension of the license was considered, great

emphasis has been given to the fact that the arrangement of the production line does not

conform to the principle of ‘uniflo’ and with logical sequence of operations… The

impression given on file is that non-compliance with complete ‘uniflo’ would constitute a

fatal deficiency in the observance of GMP standards in the production unit. To arrive at a

finding on the reasonableness of the above issue, the Committee considers it necessary to

discuss in some detail the significant provisions of Schedule M that are applicable to

vaccine/sera manufacturing units in the country.

4.4.2.9 The GMP standards are laid out in an elaborate document, a part of which is descriptive

in nature. The key overarching provision of Schedule M is: The production area shall be

designed to allow the production preferably in uniflo and with logical sequence of

operations.’ The manufacturing standards in the drugs and pharmaceutical industries of

the country are far-removed from the best in the world. However, the Committee must

quickly qualify this by saying that, this is not to imply that they are an unacceptable

standard that place at risk the health of the citizenry. The optimal flow of operations can

be ensured by strict application of appropriate SOPs without any major redesign of the

lay-out of the production line / buildings. It is the view of the Committee that, broadly

speaking, they maintained the minimum required technical standard, and in tandem with

rigorous enforcement of product quality standards, they have been able to provide quality

preventive / curative care to the citizenry.

4.4.2.10 The Committee visited the three manufacturing units before the finalization of the Interim

Report. The status of the manufacturing facilities at each of the three locations at the time

of the Committee’s visit has been given in paras 2.2, 2.3 &2.4 of the Interim Report. A

summary of the overview of the status of the three units is recapitulated hereafter. It is

noted that several inspection reports have been submitted pursuant to various inspections.

Many of the observations overlap. The last detailed inspection report was submitted in

early January 2008, after the receipt of the reply from the units to the show cause notice,

and immediately prior to the suspension of the manufacturing licenses. These are perhaps

the most detailed reports pointing out the deficiencies. The deficiencies listed in these

reports of January 2008, will be used as the reference list for the discussion in this

section. Out of the total of 140 deficiencies mentioned in the reports, some 71

observations are of a minor nature, not significantly affecting the manufacturing

standards. Some 69 others require significant improvement / upgradation – walls not

having a smooth surface, junctions, corners, window/door frames not being smooth and

dust free, animal house requiring minor improvement, SOPs requiring revision, need for

introduction of new documentation, need for calibration of different equipment,

separation of different work areas, etc. About 60% of this second category of work had

already been completed at the time of the site visit. It was the assessment of the

Committee that the remaining work in this category could comfortably be completed

within three months. On the basis of the observations during its site visit, the Committee

was of the view that many of the deficiencies pointed out are minor in nature, and even

the key requirement – ‘production in uni-flow and logical sequence of operations’ – is

substantially achieved in the existing production lines.

4.4.2.11 At this stage, the Committee would like to set out its understating of the key phrase of the

GMP, which constitutes the overarching objective, to design the work area ‘to allow the

production preferably in uni-flo and with logical sequence of operations.’ In the view of

the Committee, the key word in the provision is ‘preferably’. Quite obviously this word

was used to imply that the principle of logical sequence of operations would be enforced

to the extent it is possible to optimize the working, in the circumstances in which the

manufacturing units operate. It would be inherent in the situation that the rigour of the

application of the GMP standards would be greater for new units than for existing units.

The rate of progressive tightening of the compliance to the GMP norms would be judged

by the NRA in the totality of the circumstances. The facilities existing at the time of

suspension of operations were designed in an age when the idea encapsulated in the

phrase quoted at the start of the paragraph, was non-existent. However, the given

space/plot constraints at the three locations. It was noted by the Committee that much has

been achieved by way of rationalization of the flow of men and material in the

manufacturing process. In fact, in all the units, within each section of the manufacturing

process (receipt of raw material and glassware from outside suppliers, sterilization of the

items; culturing of bacteria, preparation of media; filling of vials; capping and labeling of

vials, packaging of the product) the layout and the manufacturing sequence has been

optimized. It can safely be claimed that within each section of the manufacturing line,

production ‘in uni-flo and with logical sequence of operations’ has been achieved.

Efficient flow of operations can be ensured by strictly following the SOPs, without major

changes in the building design. However, this had not been possible across all the

interfaces of the different sections in the sequence of production. The connect between

different sections of the production process in some instances is established through the

use of aseptic pass-boxes. To achieve the ultimate optimization through the entire process

line, a new production line will have to be established by incorporating the essential

technical features in the original design. It is learnt that the Ministry has approved the

schemes for establishment of new manufacturing lines. Taking into account the

reasonable estimates of time for administrative processing of the scheme and construction

of the new facilities, the Committee felt that a total implementation period of three years

would be required.

4.4.2.12 The manufacturing units at CRI, Kasauli and BCGVL, Guindy had considerably

quantities of finished products with them from the time of the closure. The Committee in

its Interim Report recommended that these should not be wasted and should be used to

bridge the supply gap at least in year 2010-11. In this backdrop, the Committee

recommended that the manufacturing units be advised that, after confirming the quality

of the products, these products be supplied under the UIP before their expiry dates. This

recommendation has been accepted and implemented by the government.

4.4.3. Due Diligence in Examination of Issues

4.4.3.1 A fundamental principle of Governance is that in the process of decision-making, the

examination of the relevant issues be carried out with due diligence, with due regard to

accountability and the need for safe-guarding public interest. Annexure C, D & E chart

out the route taken in the processing of the issue on the relevant files. The Committee

observes that not even one official has identified the different aspect of the issue and

analyzed it in any systematic manner. In fairness, it must be recorded that in his first note

dated 5.4.07. DCGI did, in a passing manner; spell out the likely impact of closure of the

public sector units on availability of vaccines for the UIP. However, this cannot be

treated as an adequate analysis of the various relevant aspects of the files the suggestions

were side-tracked and lost amongst other views. The overall impression that the

Committee gets is that the process of examination of the issue had spun out of control,

and no one at the senior administrative level made any attempt to bring it back on track.

The flawed decision was the result of multiple human errors. The constructive

responsibility for this would rest on the apex functionaries of the political and

bureaucratic executive i.e. HFM and Secy. (HFW).

4.4.3.2 Early during the process of examination of the issue, at the meeting taken by Secy.

(HFW) on 1.9.07, he had suggested that the units be advised to wind-down operations.

HFM, in a subsequent meeting had taken a milder view and instead suggested that the

units be asked to rectify the deficiencies pointed out and also that WHO Hqs be

approached for more time to carry out the upgradation. However, the Ministry’s final

views on the question of issue of a show cause notice dated 14.12.07 to the units was

approved by HFM. From this recapitulation of the process, it will be seen that the crunch-

decision taken by the DCGI, was accepted at the highest levels in both the political and

bureaucratic executive line-up of the Ministry. Responsibility for the flawed advice given

to the DCGI would substantially rest at those two levels – HFM and Secy (HFW).

4.4.3.3 From a study of the files it is seen that the representation made by the manufacturing

units against the notice of suspension / cancellation of the licenses and the reports of the

second round of inspection carried out under the orders of the DCGI, were never

examined on DCGI’s file: also at this stage, no reference was to the Ministry. The

Committee only finds a short note dated 16.1.08 (Annexure C), stating that the DCGI had

suspended the licenses on 15.1.08. This note was seen by DGHS (17.1.08) and Secy.

(HFW) (26.1.08).

4.4.3.4 The Committee is surprised to note the procedure adopted by the DCGI after the receipt

of the representations in response to the show cause notices. The action of the DCGI in

ordering the suspension of the licenses without even going through a ritual of considering

the representation, and the subsequent inspection report, is plainly illegal. Since the

DCGI was exercising quasi-judicial powers, an analysis of the representations and the

reasons for arriving at a decision, needed to be recorded as speaking orders. Since the

particular DCGI who was involved in the administrative process then, is no more with us

in the world, the Committee finds it appropriate to refrain from more critical comments

on this matter.

Before passing on to another section, the Committee would like to clarify one other

aspect. Despite the fact that the DCGI independently took the final decision to suspend

the licenses, without any consultation with the Ministry, there is ample collateral

evidence that the Ministry, including the apex levels of the political and bureaucratic

executives, were fully in the loop. In this background, the only conclusion we can arrive

at is that the Ministry was associated with the final decision for the closure of the units.

4.4.3.5 At this stage of the Final Report, the Committee would like to record the general

impression it has gained after studying the Ministry’s records relating to the

administrative processing of the issue. It is observed that the officials involved in the

process showed a marked reluctance to come to grips with the problem being examined.

The files floated around in a directionless manner. Most notes were perfunctory and

repetitive. The various elements constituting the issue have not been identified and there

is little rigorous analysis of the issues. A strong impression is gained that everyone was

handling the files with kid gloves. It would not be an exaggeration to say that the process

adopted in the Ministry – for evaluation of the issue relating to the closure of the units –

was virtually on auto-pilot. Quite apparently, the issue involved was a critical one and its

examination should have been carried out in all its multiple aspects. If, for any reasons,

the junior officers felt diffident, it fell upon the apex level officials of the political and

bureaucratic executive, to discharge this leadership role. There was nothing worn with

the ‘system’ in the Ministry / DGHS / DCGI, it was only that the ‘system was not

operated responsibly’ With disappointment, the Committee is constrained to note that at

no level was the duty – of ensuring a rigorous and objective analysis – discharged with

the necessary diligence. In fact, evidence on record indicates that, in the midst of the

administrative process, the decision was being treated as pre-judged.

4.4.3.6 The Former HFM in his meeting with the Committee on 13.5.10 made the point that the

consideration of this important issue was carried out for long, much of which went

unrecorded in the files. He implied that the question of adequacy of scrutiny in the

Ministry should not be based only on the recorded notes. The principle of accountability

on public administration requires that the process be fully recorded in the official

documents. It is not possible to entertain post-factor claims on the basis of unrecorded

discussions. Former HFM also contended that the Indian public sector units were in no

way comparable to the modern units Europe and USA. While this is true, as discussed in

another part of the report, this in no way contradicts a conclusion that the public sector

units broadly conform to the Indian GMP standards. In defending the closure of the

manufacturing units, the HFM had mentioned that during his period a large number of

units had been closed down in the country for non-compliance with the GMP standards.

For verifying this, the DCGI’s office was asked to provide information on the number of

units whose license was suspended / cancelled in the last five years for non-compliance

with the GMP standards. Despite several reminders, and despite the caution that failure to

furnish the information would only be construed as deliberate to avoid embarrassing

facts, these figures have not been furnished to the Committee. The general impression of

the knowledgeable officials in the Ministry is that this number would be very small, if not

nil. Thus, the former HFM’s impression about large-scale cancellation of licenses during

his period in office is mistaken. The Former HFM also has no comments as to why

WHOs views on the GMP standards should be binding in the Indian NRA. In totality,

during his meeting with the Committee, the former HFM did not mention a single point

of significance that could have improved the Ministry’s case in defending the handling of

this issue.

4.4.3.7 The note submitted by the DGHS does not raise any significant point. It generally says

that all matters were processed in DGHS/DCGI with all diligence and responsibility. The

only eye-catching opinion mentioned is that some issues listed in the note were purely

policy issues and DGHS had nothing to do with them. It comes as a surprise to us to hear

that the Director General does not consider it to be his role to advice the Ministry in

policy formulation. If this is really true, DGHS would be left with practically no

responsibility – it is well known that DGHS does not itself execute any field programme,

or deliver any health services. Policy issues in the Ministry of Health have a predominant

technical aspect, and one would expect it to be the principal responsibility of the DGHS

to provide the Ministry the requisite technical inputs. In fact, in the view of the

Committee, the issues being considered relating to implementation of GMP standards

were ones where the DGHS’ inputs would have been decisive in arriving at a policy

view-point. Without exaggeration, it can be said that the examination policy issue became

a mess, principally because there were no technical inputs to guide the analysis. In this

back-drop, the Committee is of the view that it would not be correct for the Director

General to assert that DGHS has no role in policy formulation.

The disagreement elements that should have been examined in the consideration of the

issue, have been discussed in para 4.2 of this Final Report. A perusal of the subsequent

paras would indicate that no rational analysis of these issues would lead one to the

conclusion that the vaccine units needed to be closed in public interest.

4.4.3.8 The Committee notes that another important point mentioned in DCGI’s note dated

16.1.08 relates to a meeting held on 17-18th Dec, 2007 between Secy. (HFW) and the

DCGI on the side of the Ministry and Additional Director General and his team from the

side of WHO. [In the Interim Report, the Ministry’s representatives had inadvertently

been mentioned as Secy. (HFW) and DGHS. DCGI has recorded that in this meeting

relating to the GMP standards of public sector units, the Ministry had agreed to suspend /

cancel the licenses of the public sector units by 15.1.08. Strangely, this note is nearly a

month after the event and also after the licenses had been suspended. There are no

minutes of that meeting on record to ascertain the circumstances in which that assurance

was given; it appears that no minutes were prepared and issued. This note of DCGI

records a startling development. There is nothing on record to show that the issue had

earlier been discussed at any level in the Ministry. Also, there is nothing to show that the

issue had earlier was given with the approval of HFM, or even that HFM came to know

of it post-facto. It may be mentioned that DGGI’s note dated 16.1.08 was not marked up

to HFM by Secy. (HFW).

4.4.3.9 The record does not explain under what circumstances and with whose authority, this

assurance was given. The show cause notice for suspension / cancellation of the license

was issued on 14.12.07. It seems that almost immediately after that Secy. (HFW) went to

Geneva, where he attended the meeting on 17-18th Dec 2007. Looking to these facts,

there is no gain saying that, even before the notice period was over and without taking the

unit’s representation into account, the assurance gave an unmistakable indication that the

outcome was pre-decided. A pre-judged outcome vitiates a quasi – judicial proceeding ab

initio. Noting the tenor of the notes, the route the files had taken and the issues which

were pointedly ignored, the Committee cannot avoid the perception that the conclusion

was pre-decided. The Committee considers it a matter of great regret that in examining

such a sensitive issues of public health security, the Ministry pre-judged the issue. In

view of this finding, regardless of all other considerations, DCGI’s order of suspension

dated 15.1.08 would have to be treated as null and void. Responsibility for the unilateral

assurance assuring closure of the units before 15.1.08, would rest on the apex functionary

of the bureaucratic executive i.e. Secy. (HFW)

4.4.3.10 Under the Rule 85(I) of the D&C Rules, the powers for suspension / cancellation of

licenses lie with the DCGI. The DCGI has the authority to exercise these powers

independently. However, there is no bar in law to the DCGI seeking advice / guidance

from anyone, including the Ministry of Health and Family Welfare. The issue regarding

the closure of the public sector vaccine units being such a sensitive one, it is not

surprising that the DCGI chose to seek the guidance of the Ministry of Health and Family

Welfare. Needless to say under the law the DCGI was in no way bound to accept the

advice of the Ministry. In the final sense, it was the DCGI who took the call on the issue

of the closure of the units. This issue has been raised in a separate note recorded by the

Member Secretary attached to the Interim Report. In this separate note, the Member

Secretary of the Committee has expressed the view that the DCGI is not required to

exercise his statutory powers for suspension / cancellation of licenses under instructions

of the Ministry. The Member Secretary had, therefore expressed the view that it would be

inappropriate to expect the Ministry of Health and Family Welfare to overtly interfere in

DCGI’s statutory powers. Thereby, the Member Secretary implied that the officials of the

Ministry of Health and Family Welfare cannot be said to be associated and would not be

responsible for the decisions taken by the DCGI. The other three Members of the

Committee consider it necessary to give their comments in this Final Report on the view

expressed by the Member Secretary.

4.4.3.11 It is the view of the other three Members of the Committee that, as mentioned earlier, it is

open to the DCGI to seek advice from anyone, including the Ministry before taking an

independent statutory decision. On receiving such a request, it was for the Ministry to

agree to give advice, or to instruct the DCGI to exercise his powers on his own. It is quite

clear from the record that the Ministry chose to evaluate the issue and finally offer its

observations to the DCGI. In fact, the Ministry processed this issue on its files from early

April 2007 to mid December 2007, a period of over eight months. In the background of

this history, and particularly after the decision of closure has generated considerable

public controversy, it would not be open to the Ministry officials to say that they are not

required to take a decision under the law and therefore they should not be held

responsible for the observations they offered to the DCGI. In the perception of the other

three Members of this Committee this would not be a bona fide position to take. In fact,

in our discussions in the Ministry, no official has taken such a position. In this backdrop,

the other three Members of the Committee would beg to disagree with the observations

made by the Member Secretary in his separate note attached to the Interim Report.

4.4.4. Purpose of Notifying GMP Standards

4.4.4.1 Any drug or vaccine/sera ultimately has to be judged by the product quality. All the

rigorous monitoring of GMP standards is to eventually secure product quality. The Indian

product standards are of a rigorous level, largely congruent with those recommended by

WHO. The products from the public sector vaccine / sera manufacturing units have not

come to adverse notice on ground of sub-standard quality. This record itself shows that,

despite not maintaining manufacturing standards that meet the ultimate level of

compliance of the GMP standards, the thoroughness of its procedures have ensured the

highest product quality.

4.4.4.2 The purpose of notifying GMP standards is to reduce, to an infinitesimal level,

the risk of any contamination / infection at any stage of the manufacturing process. It needs

to be recognized that conceptually, the risk of product quality failure can never be reduced

to zero; it can only be minimized to a low level. With the manufacturing processes in use in

the public sector units, and with diligence and thoroughness, they have ensured that the

product quality fully meets the notified standard. As has been mentioned in an earlier part

of the Report, the public sector units have already made considerable improvements/ are in

the process of making improvements in the manufacturing arrangements in order to rectify

the deficiencies that have been highlighted by the inspectors in their reports. To reach an

even higher level of sophistication in the standard of the manufacturing process, a new

production line will have to be established at each location, incorporating in the basic

design the fullest GMP requirements. However, till the new facilities are commissioned,

there does not seem to be any reason to discontinue producing the vaccines / sera in the

facilities available in their existing production line, which in some cases have been

significantly upgraded, and in others, are undergoing upgradation. While operating the

existing production line, the management will have to ensure that their product conforms to

the product standards prescribed in the D&C Rules in every respect. The Committee is of

the considered view that at the time of issue of the suspension orders, the public sector units

were substantially complying with the letter and substance of the GMP standards set under

Schedule M of the D&C Rules. The contrary assessment in the course of the inspections in

the latter half of 2007 was largely on account of a mis-interpretation of the statutory

requirements of the GMP standards, as discussed in an earlier section of the Report. In the

period after the closure, many of the deficiencies listed in the inspection reports have been

rectified, and action is underway to rectify the remaining deficiencies. Therefore, on

restarting after upgradation, the compliance level of the units would be superior to that

existing prior to closure.

4.4.4.3 With reference to the above paragraph, the Member Secretary of the Committee, at

the stage of finalization of this Final Report, has brought to our notice a Note of the

Standing Finance Committee circulated by the Ministry of Health and Family Welfare in

July, 1999 relating to the expenditure sanction for certain works of upgradation proposed in

the manufacturing facilities of CRI, Kasuali. The Member Secretary has pointed out that the

said Note admits that the manufacturing conditions in that unit are not cGMP compliant and

that the upgradation is required to make the unit compliant with Schedule ‘M’ under the

D&C Rules. From this, the Member – Secretary has drawn the conclusion that it cannot be

said as has been stated in the previous para, that at the time of suspension of the licenses of

the unit in January 2008, the unit was substantially in compliance with the extant GMP

standards. The substance of his point is placed in Annexure F to this Final Report as a Note

of Dissent. As suggested in that note, the Committee once again asked DGHS/DCGI to re-

check and forward any other files relating to the issue under examination that had escaped

their notice earlier on. No other documents have been located and forwarded by the

DGHS/DCGI. The other Members of the Committee have studied the available documents

and the surrounding circumstances referred to by the Member-Secretary, in great detail. The

observations of the other Members of the Committee are as under:-

(i) GMP norms were first introduced under the D&C Rules in 1988 and have been

changed from time to time. The GMP norms in force in December, 2007 when the

licenses of the manufacturing units was suspended, were first made effective from

1.7.05. The GMP norms in force when the SFC Note was circulated in July, 1999

were clearly not the norms under which the licenses of the manufacturing units were

suspended in January, 2008. Thus the statement in the SFC Note relates to another

norm at another time, and would have no bearing, legal or otherwise, on the status of

GMP compliance of the unit in January 2008.

(ii) Quite apart from the issue as to which norm was in operation when the SFC Note

was circulated, a long span of over eight years separated the circulation of the SFC

Note and the suspension of the license of the unit. Any regulatory action under the

D&C Act or Rules has to be based on proximate events. The observations on the

manufacturing conditions in year 1999 would have no rational nexus with the

manufacturing condition in early 2008. In the subsequent para 7 of this Report some

details have been given of the steps taken over the years to upgrade the quality of the

facilities in the manufacturing units. Annexure K to this Report sets out the annual

plan allocation over the last fifteen years for CRI, Kasauli. It will be observed there

from that between 1999-2000 (when the SFC Note was circulated) and 2007-08

(when the manufacturing license was suspended), the Plan Expenditure incurred at

CRI, Kasauli for various upgradation works was of the order of Rs. 43 crores. Given

these facts, it is clear that the condition of the manufacturing facility in year 2007-08

would be vastly different from that in year 1999-2000.

For the reasons given above, it is considered view of the other three members of the

Committee that a remark in a document of year 1999 – that CRI, Kasauli is not GMP

compliant – would have no logical bearing on the GMP status of the unit in the year

2007-08.

4.4.4.4 The impression given in some of the documents of WHO officials and also in the

media, is that, by not meeting WHO GMP standards, the users of these drugs / sera under

the UIP are being delivered sub-standard medical services. Such a perception is

misconceived. All the sera/vaccines produced in the country are produced from units

meeting Indian GMP standards. Also, all the products being introduced in the domestic

market are conforming to the notified Indian product standards, which in most cases are

congruent to the WHO recommended product standards. Conceptually, GMP standards can

be of an ever-increasing sophistication. The GMP standards maintained by some European

manufacturers are even superior to the WHO GMP standards. This in no way implies that

products from a unit complying with WHO recommended standards is inferior to that from

European from manufacturing units maintaining even more sophisticated standards.

Likewise, the products from units conforming to Indian GMP standards are in no way

inferior to the products from units conforming to WHO recommended standards. All

products released into the domestic market are rigorously checked for product quality

against the notified product standards, regardless of the GMP standards of the originating

manufacturing units. It is, of course, true that for manufacturing units having higher GMP

standards, the possibility of turning out batches of sub-standard products reduces. In any

case, all batches of bulk finished product and all lots of packaged drugs/vaccine/sera are

rigorously checked for product quality prior to release into the market. Looking at if from a

commonsensical point of view, no manufacturing unit that was noncompliant with the GMP

standards could possibly produce vaccines with the correct product standards on a

consistent basis over an extended period of time. Thus, the impression given in certain

circles that the products from unit conforming to Indian GMP standards are inferior to the

products from units conforming to WHO recommended standards, is baseless. The charge

that is sometimes made – that the Indian government is providing sub-standard vaccine /

sera to its citizens under the UIP – is unfounded assertion.

4.4.5. Role of DGHS

4.4.5.1 The Ministry of Health and Family Welfare is a key one in the national government.

The social sectors – health, education, social empowerment, etc. – impact directly on

individual citizens, an aspect that is vital for the socially disadvantaged. The production

sectors – industry, petroleum, minerals & metals, etc. – on the other hand impact on the

elite first and then to some extent, through the trickle-down effect to the disadvantaged. For

this reason the Ministry of Health and Family Welfare has a pivotal role in meeting the

basic human needs of the community in general. At one level, this poses a gigantic

challenge in public administration in reaching health services to the scattered population, at

another level, this sector with a high involvement of science and technology, which requires

the inherent capacity within the management structure to incorporate these technical inputs

into public health policy. If one looks back at the last half century, the sectors in which

science and technology has taken huge strides would include IT, Military Weaponry and the

conquest of space, along with the medical sector. For the Ministry to discharge its role of

governance effectively, it would need strong advisory support of benefit from the

developments that are available through the application of science and technology. In the

Indian context, this advisory role is to be discharged by the Directorate General of Health

Services, a subordinate office of the Ministry. The Directorate is manned by some graduate

doctors, while most others are specialists. These technical personnel in the DGHS are

mandated to advise the Ministry on the many technical issues associated with any public

health intervention. The case of vaccine production is a text book example of an issue

where the contribution of the DGHS’s advise should have been decisive.

The Committee has studied the proceedings on the files under review to assess whether the

responsibility of DGHS (as distinct to the DCGI section) has been adequately discharged. A

scrutiny of Annexure C, D & E reveals that there has been almost no participation in the

decision making process at the senior level of the DGHS. That is the level from which the

Ministry can expect to obtain valuable and balanced advice. It is observed from Annexure

C that the file went to the Director General on three occasions and no substantive comment

was offered on any occasion – in fact, that level merely served as a pass-through level

between the DCGI and the Ministry. The Committee is constrained to express its

disappointment at this. From a perusal of the files it is obvious that the lower-level officials

in the DCGI’s office and the Ministry were floundering. In this situation one expected that

the highest functionary in the Directorate – the Director General – would assume the

leadership and set the file on a reasonable track fro rational examination of the issues.

However, no such proactive intervention was offered. It was left to a fairly junior officer in

the Directorate – the ADG(EPI) – in para 10 of his note dated 4.1.08 (Annexure E) to point

out that there was utter confusion over the closure issue in the manufacturing units and the

Ministry and to urge that a clear line of action be indicated. In fact, he was bold enough to

suggest that (i) the production in the three units be continued and (ii) the units undertake

rectification of the defects pointed out in the inspection reports. In response to this, as in the

past, no decision was taken at the higher level, whether in the affirmative or in the negative.

4.4.5.2 However, even more than what has been mentioned above, the Committee is pained

to read the remarks of the Director General in his note dated 9.1.08 (Annexure E). From

these it is clear that at the final stage, the Director General was completely out of the loop

of officials who were dealing with this important matter. In his note he says that he has

been told by DCGI that the decision to suspend the licenses is as per the provisions of the

Act and it was taken after getting approval of the highest authority. He also directed that the

photocopies of the relevant papers be obtained and placed on record. The Committee is

distressed to note the point to which the Director General had reduced his role in the

processing of this important matter. The record makes it apparent that, not only did the

Director General not contribute to the processing of this sensitive technical matter, but that

he was not even formally in the loop. What makes it worse is that even the information he

obtained from the DCGI was factually incorrect – the Director General’s note is dated

9.1.08 while the suspension order was issued on 15.1.08 about a week later. Also, in point

to fact the final decision to suspend the license was not taken by the highest authority

(meaning HFM) but was independently taken by the DCGI. These records provide

additional evidence that the eventual conclusion to close the units – was a pre-determined

one. Also the Director General was completely out of the decision-making loop.

The Committee is of the view that the Director General, in the processing of these issues,

has adopted a very passive role. His interpretation of his role is that he is not required to

participate in policy-making. In fact in the note submitted by him to the Committee

(Annexure B), he explicitly states that all the issues being looked into were policy issues

and the DGHS has nothing to do with them. The Committee strongly recommends that the

Directorate and the Director General should proactively involve themselves in policy-

making. Also the Ministry should be anxious to elicit the technical inputs from the

Directorate.

An overview of the entire record leads the Committee to the conclusion that, though the

lower level of the DGHS’s office may have failed to put the issue in its correct perspective,

at least they participated in some manner in the process of decision-making. However, the

Committee is constrained to note that the higher levels of the Directorate of Health Services

did not discharge their responsibility as the apex technical advisors to the Ministry. The

Committee also notes with regret that the fact that no useful technical inputs were emerging

from the DGHS was accepted in the Ministry without demur and othing was demanded

from the DGHS.

Before closing this section of the Report, the Committee thinks it appropriate to give its

views on one general point. In the course of the inquiry, the Committee perused many files

others than those that were found to be relevant to the inquiry and which came to be

analysed in the Report. A perusal of a large number of such documents gave the Committee

an impression that, for various reasons, the powers statutorily delegated to different levels

of the hierarchy were not being adequately utilized in an independent manner by the

concerned functionaries. The Committee would urge that all officials entrusted delegated

powers should be required to exercise these powers independently in the interest of

expeditions decision-making in public interest.

4.4.6. National Health Security

4.4.6.1 One of the primary responsibilities of governance is that of ensuring public health

security. An, in sum, one irreducible element of public health security is the securing of

vaccines for the UIP. Despite all attempts to moderate the population increase, there is no

escape from the position that in the next decade or so we will have to provide for about 25

million new born/ infants every year. The infants in our country many of who are

undernourished and underweight are markedly vulnerable to communicable diseases. In

their weakened condition, without immunization cover, they become sitting targets to the

common infections. Out of the current level of infant mortality of 53 per 1000 live births,

37 deaths are contributed by neo-natal mortality i.e. 68%. Exposure of infants, even if they

survive an attach of a communicable disease, leaves them weak and handicapped for life,

for ever prone to recurring morbidity. It is also noticeable that despite considerable

improvement in the basic health indicators since independence, the levels are still

unacceptable. The coverage under UIP as reported by NFHS 3 is only 44% and has actually

worsened since NFHS 2 in several states – Andhra Pradesh, Gujarat, Maharashtra, Punjab

and Tamil Nadu. The scope for the gainful use of the UIP for moderating infant morbidity /

mortality is still large. In these circumstances, ordinary prudence demands that the sources

of supply be divided between the public and private sector producers, so that the possibility

of disruption of the supplies on account of an unforeseen crisis in commercial production is

minimized. Annexure F clearly indicates that in the year previous to the year of closure of

the public sector units (i.e. 2006-07) the contribution of the six primary vaccines to the UIP

from the public sector producers was substantial. The Committee observes that, by

reducing public sector vaccine supply to zero in one stroke a crippling blow has been

inflicted to the health security of the country.

4.4.6.2 The importance of vaccine security in the country has also been highlighted in the

National Health Policy – 2002. In order to ensure uninterrupted supply of vaccine/sera for

the UIP at affordable prices, the National Health Policy recommended that not less than

50% of the vaccine / sera be sourced from public sector institutions. For historical reasons

we were in the happy position of substantially meeting these targets prior to the closure of

the public sector manufacturing units. For the consideration of their imperial power, the

British had set up the vaccine manufacturing units. These were operated by Indians who

thereby acquired a unique experience in this vital sector. There are very few other

developing countries that occupy such a position of strength. Casting our attention across

our neighbor countries – Bhutan, Nepal, Pakistan, Myanmar, Sri Lanka, Bangladesh – none

of these have any experience in this sector of production. With our fortuitous head start, we

are in a unique position to consolidate our vaccine security. Also with our low cost of

production and excellent product quality standards, we are in an advantageous position to

become the preferred source of vaccine supplies to the countries of the developing world. In

this backdrop, the Committee is of the view that the country should try to consolidate its

historical advantage rather than becoming wholly dependent on uncertain private

commercial sources.

4.4.6.3 At the time of ordering the closure of the public sector vaccine manufacturing units, the

Ministry had announced the proposal to set up a new Integrated Vaccine Complex at

Chengallapattu, Tamil Nadu. The estimated project cost was in the range of Rs. 160-200

crores. The facilities planned to be covered in the complex were:

Table 7

UIP Vaccines DPT,TT,DT,DCG & MeaslesCommon Facilities Vaccine R&D, Testing Labs, Animal House,

Incubators New Generation Vaccines Hep. A&B, Hib., JE, ARV., Com Vac.

The project is at an early stage of planning. The responsibility of coordination of the

project has been entrusted to HLL Lifecare Ltd., a public sector undertaking under the

Ministry of Health and Family Welfare. In the Committee’s assessment, even after the

integrated complex is provided its full requirement of funds in the implementation period,

the completion will take not less than three years.

4.4.6.4 At this stage we find it necessary to inject an element of realism in the estimation the

implementation schedule of the new integrated complex. Project implementation in the

public sector is painfully slow. In the case of the Integrated Vaccine Complex new

technology would have to be negotiated, which would have its own time requirements.

Also, the establishment of the new production lines at the three locations would take not

less than three years. In this backdrop, the Committee can see no reason for closing down

the existing plants in the public sector when the new integrated vaccine complex, or the

new production lines at the existing locations are nowhere on the horizon. By closing

down the existing public sector vaccine production units in advance, the country would

have exposed itself to vaccine insecurity for five years, or possibly, even a longer period.

However, the establishment of the new integrated vaccine complex, along with the

establishment of new production lines at the existing three locations, will eventually

greatly reinforce the nation’s vaccine security.

4.4.7. Evaluation of Public Interest

4.4.7.1 After discussing the important elements having a bearing on the issue of closure of

the manufacturing units, the Committee would now like to gather the strands of the

discussion to come to a conclusion on the main item of the terms of reference. The first

item of the terms of the reference reads as under:

“To review the reasons for suspension of the manufacturing licenses of the three

institutes, namely Central Research Institute, Kasauli, Pasteur Institute of India,

Connoor, and BCG Vaccine Laboratory, Guindy, Chennai from the historical,

technological administrative/organizational and other perspective.

4.4.7.2 The process of examining the issue of closure has been carried out in the Ministry

under an over-hanging impression that the WHO exercises some degree of supervisory

control over the Indian NRA. The discussion in para 4.4.1.2. in the view of the Committee,

establishes conclusively that this not is not true. WHO’s role in India is an advisory role.

The international organization can set its own standards for drawing up the pre-qualified list

of vendors for supplies it makes to multi-lateral agencies. However, the role of enforcing

Indian GMP standards in the domestic manufacturing units is independently discharged by

the NRA/DCGI. The NRA is required to see whether in their entirety, the standards set out

under Schedule M of the D&C Rules are substantially met by the unit. Each norm, or

aspect, does not necessarily have to be fully met to achieve compliance with the GMP

standards. The NRA is required to satisfy itself that overall the unit meets the irreducible

acceptable level of compliance. Neither the letter of the provisions under Schedule M nor

the historical background of the manufacturing sector in India would lead to the conclusion

that the overarching principle applicable – the manufacturing facility being in ‘uniflo’ and

in logical sequence of operations – is required to be met to the fullest possible extent. The

compliance with the norms has to be judged by the NRA in the context of a variety of

circumstances, including the technology level of the unit, the design of the existing unit, the

scope of change looking to the physical lay-out of the unit, consideration of the health

security of the country, etc.

4.4.7.3 In the context of the above stated legal position, the Ministry should have carried out

an evaluation process to come to a decision on the issue of closure of the units. The

Committee is of the considered view that the functionaries in the Ministry failed to

discharge this responsibility. The issue was processed in disregard of the legal position

outlined in para 4.4.7.2. Further, the issue was not logically disaggregated into its elements

in order to make the examination a meaningful one. The record shows that the process was

sent off in a futile circular motion, with the key issues never being examined. The apex

functionaries – of both the political and bureaucratic executives (HFM and Secy. (HFW) –

took no initiative to ensure that the examination was proceeding in a meaningful direction.

The DGHS, the principle technical advisory agency for the Ministry, made no contribution

to the understanding of the issue in the Ministry. Despite suggestions on more than one

occasion, no initiative was taken to resolve the issue at the level of DG, WHO. The

evidence also shows that the conclusion of the examination was pre-determined. Secy.

(HFW) had given an assurance on 17-18th Dec. 2007 to representatives of WHO that the

public sector units would be closed before 15.1.08. This was well before the notice period

for making a representation had expired, as also before the representations had been

received and studied by the DCGI. Responsibility for pre-judging the issue would rest on

Secy. (HFW).

4.4.7.4 All in all, the decision of the Ministry, both in legal terms and on consideration of

the merits, was palpably incorrect. Because the outcome of the evaluation process had been

pre-determined the entire process was null and void. On the other hand, on consideration of

the pros and cons from the view point of public interest, the decision was unjustified.

Despite applying the most liberal interpretation to the events, the Committee could not

uncover any rational reasons for the conclusion that was arrived at in the Ministry. The

decision of the Ministry left the country without any supply from the public sector, thus

exposing it to an unacceptable risk in vaccine security. As a result of total dependence on

private suppliers, the Ministry became captive to private commercial pressures. The price of

the domestic primary vaccines rose by 50%-70% in the two years after the closure of the

public sector units and several key states experienced critical shortages of the vaccines. In

view of this the Committee concludes that the palpably incorrect decision of the Ministry –

based on an illegal procedure and a flawed appreciation of the issues – was against broad

community interest.

4.4.7.5 Analysis of the data received from the Ministry and also the observations during the

visits to the manufacturing facilities had led the Committee to the conclusion that the post

closure situation was critical, for which reason some of the Committee’s recommendations

needed to be submitted to the government immediately. The Committee realized it would

take more time to study and arrive at its conclusions on the full span of the terms of

reference. In these circumstances, the Committee submitted an Interim Report dated 5th Feb

2010 with certain recommendations that required implementation without delay. As has

been mentioned in an earlier part of the Report, four significant recommendations from the

interim Report have already been implemented by the Ministry.

5. Impact of Closure on the UIP

5.1 At Annexure G is a statement giving the share of supply of different vaccine/sera from

different manufacturing units in the public and private sectors. It will be observed that in

the period 2004-05 to 2007-08 the supply of vaccines from public sector units as a

percentage of total national requirements has ranged as indicated in the following Table

7.

Table 7

BCG 100% TT 18%-100%Measles 0% DPT 34% - 90%

The above figures indicate that in the stated period, India has been able to maintain a very

balanced approach in operating the UIP by sourcing a significant portion of the primary

vaccines from the public sector units. From year 2008-09 onwards, the supply from

public sector manufacturing units has dropped to zero. To insulate the UIP from price and

supply shocks a cardinal principle of public health policy requires the sourcing of the

vaccines from public sector manufacturing units to a substantial extent.

5.2 The statement at Annexure H gives the installed manufacturing capacity in the public and

private sector units. The aggregate installed manufacturing capacity in the country is

much more than the country’s requirement. It will be observed that the public sector

share of the installed capacity is substantial (BCG – 62%; DPT 20%, DT-26%, TT –

53%). Based on this on the whole, the public sector production has made the public

health system entirely dependent on private suppliers.

5.3 The UIP coverage in year 2008-09 & 2009-10 the two years after the closure of the

public sector units, is given in Annexure I & J respectively. It will be seen that while

there was no shortage in aggregate availability in 2009-10 for most vaccines (DPT-

96.3%, OPV-95%, BCG – 90.5% and Measles – 92.4%) several key states with large

populations (>20 million) were handicapped because of short supply. The shortfall in

targeted UIP coverage (>10%) in 2009-10 was observed in the following key states with

large populations (>20 million).

Table 8

Vaccine States in which shortfall >10% of requirements BCG Bihar, Madhya Pradesh, JharkhandDPT Bihar, Assam, Jharkhand, Madhya PradeshOPV Assam, Bihar,Madhya Pradesh, Jharkhand, Karnataka

Measles Assam,Bihar,Jharkhand,Karnataka

5.4 The Ministry was able to draw down on the buffer stock, and it also made additional

purchases from the private manufacturers to meet the demand in 2008-09 and 2009-10.

However, the vulnerability of the public health system in the long term is plainly visible.

In year 2008-09 & 2009-10 when the public sector supply was nil, the price the Ministry

had to pay the private suppliers was unacceptably high – increase of price over the price

paid to the supplier in the previous year for the different vaccines was found to range as

under:

Table 9

Purchase Price of Vaccines from Public/Private Manufacturers in years 2007-08, 2008-09

& 2009-10

Vaccine Year 2007-08 Year 2008-09 % Increase

y-o-y

Year 2009-10 % increase

y-o-yPublic

Sector

Price Per

Vial

(Rs.)

Private

Sector Price

Per Vial

(Rs.)

Private

Sector

Units

Price

per Vial

(Rs.)

Private

Sector Uni

Price

per Vial

BCG 13.00 -- SII* 17.50 30 SII 27.85 59DPT 11.50 13.50 SIL*

BE#

14.37

16.89

6

25

SB

BE

23.49

23.59

63

40DT 9.60 9.14 BE# 13.85 52 -- -- --TT 6.20 -- -- -- -- -- -- --

*SIL Serum Institute of India : BE#: Biological Evans

5.5 While judging the availability of vaccines for the UIP, the aggregate national availability

is not as important as the availability in each state/union territory, which constitutes the

public health administrative units that actually deliver the health services. The inadequate

supply of vaccines to several large and critical states is a dangerous development. It

should be the highest priority of governance to ensure that this risk of vaccine shortage is

not carried forward into the future years.

6. Revocation of Suspension

6.1. The status of the manufacturing facilities at each of the three locations at the time of the

site visit has been given in summary form in paras 2.2., 2.3 & 2.4 of the Interim Report. Several

inspection reports have been submitted pursuant to various inspections. The deficiencies listed in

the reports of January 2008 will be used as the reference list for the discussion in this section. Out

of the total of 140 deficiencies raised in the report, about 71 observations are of a minor nature,

not significantly affecting the manufacturing standards. Some 69 others required significant

improvement or upgradation. About 60% of this second category of work has already been

completed. The remaining work in this category can comfortably be completed within three

months. Within the given space/plot constraints at the three locations much has been achieved by

way of rationalization of the flow of men and material in the course of the manufacturing process.

In fact, in all the units, within each section of the manufacturing process, the lay-out and the

manufacturing sequence has been optimized. Based on this status of the production lines, the

Committee had come to the conclusion that many of the deficiencies pointed out are minor in

nature and even the critical requirement – ‘production in uniflo and with logical sequence of

operations – has substantively been achieved in the existing production lines. In the above

circumstances and for the reasons discussed in detail in para 4.4.2.13. the Interim Report the

Committee had recommended that the production in the existing units be restarted at the earliest.

To enable that, the necessary orders would have to be issued in response to the appeals filed by the

affected units under Rule 85(3) of the D&C Rules. The Committee is happy to note that the

government accepted that recommendation and revoked the suspension orders on 26.2.2010.

6.2. The surviving deficiencies relate to overcharging objective of the GMP – to design the

work area ‘to allow the production preferably in uni-flo and with logical sequence of

operations’. In the view of the Committee the key word in the provision is ‘preferably’.

Quite obviously this word was used to imply that the principle of logical sequence of

operations would be enforced to the extent it is possible to optimize the working in the

circumstances in which the manufacturing units operate. This has not been possible in the

different sections of the production process of production units across all the interfaces

of the different units in the sequence of production .The connect between different

sections of the production process in some instances, under the current plant layout is

established through the use of aseptic pass-boxes. To achieve the ultimate optimization

through the entire production line, a new manufacturing line will have to be established

by incorporating the essential technical features in the original design. Taking into

account the reasonable estimates of time for administratively processing the scheme and

implementing the new facilities, the Committee feels that a total implementation period

of three years would be required and should be adhered to. A time-schedule for

preparation of plan, decision-making, release of grant and implementation should be

drawn up and followed.

7: Upgradation of Public Sector Vaccine/Sera Units

7.1 While recommending the immediate restart of the existing manufacturing facilities, the

Committee is distressed to observe the long-persisting delay in setting up the new production lines

to achieve the ultimate fulfillment of GMP standards. The year-wise budgetary plan allocation for

fifteen years (1905-96 to 2009-10) are given in Annexure K. From this it will be seen that, in the

more recent past, the budgetary plan allocations have been increased. Some of the piece-meal

improvements undertaken by PIL, Conoor were related to TCARV Lab., Measles Lab., DPT- Hep.

B Combo Lab. Diptheria Lab. Pertussis Lab, and Quality Control and Utilities. While the

upgradation in CRL Kasauli was of the Triple Vaccine Division. From this it is observed that the

improvement programme was fragmented. In the case of the third public sector unit - BCGVL.

Guindy - even the ad-hoc initiatives were not of a significant nature. From the above account it

will be seen that in two of the units - PIL. Conoor & CRL Kasauli - some efforts were made to

bring about ad-hoc improvements in the manufacturing units. However, the programmes and the

budgetary outlays were nowhere near the scale/amount required for radical redesigning of the

production lines. In the period being mentioned, the budgetary proposals from the Units/Ministry

were for larger programmes, but the allocations provided were limited by the macro-level resource

constraints of the Planning Commission/ Ministry of Finance. It may be added here that even after

the new GMP norms became effective from 1-7-05, government has been tardy in upgrading the

level of manufacturing facilities. In the budgets after the new GMP norms became effective 2006-

07 to 2009-10 the total plan allocation for the three public sectors manufacturing units has only

been about Rs. 64 crores. An amount that is grossly insufficient for setting up new production

lines. The Committee, however, notes that many of the deficiencies pointed out in the inspections

are minor ones and should have been rectified by a vigilant management within the financial

allocations made from time to time.

7.2 The Ministry of Health and Family Welfare has already decided to set up a new

production line at each location with the basic design across all sections of the manufacturing

process enabling production in uniflo and with logical sequence of operations to the fullest extent,'

Many such plans/resolves of the Ministry, in the past, have not been carried forward, and have

only petered out in time. The Committee strongly urges the Ministry to ensure that such a

denouement does not recur. It is no credit to a country aspiring to become a global power to be

exposed to controversy on a fundamental issue of vaccine security. Un fortunately, we have been

facing such a controversy over the last two years. As a basic human, need, health security should

be maintained and insulated from threats and controversies. For the next decade-and-a-half at

least, our requirement for primary vaccines will not reduce in quantum. As time goes by newer

vaccines may be included in the array of primary vaccines, and the UIP may acquire a new look,

even though the coverage may be for a reducing number of new-born. In short, for as long a

period as we can foresee the UIP will be a major component of governance in the health sector.

Looking over this span of the future scenario, it was imperative for the country to establish at the

earliest new manufacturing-lines at the three locations by incorporating in their basic design all the

critical elements of the GMP standards. The Committee, therefore, recommends that the

revocation of the suspension of the license of the units suggested in the previous para be made

subject to the condition that a new production line for manufacture of vaccine/sera will be set up at

the three locations within a period of three years.

In the course of the proceedings of the Committee, the Committee has been informed by the

officials of the Ministry that formal approval has been given to the three units to proceed with the

implementation of new production lines at their current locations. The Committee would reiterate

its earlier observation that the projects would require very close monitoring to be completed in the

estimated project period of three years.

7.3 The organizational and staffing issues relating to the setting up of new production lines

have been discussed in considerable detail in Section 9 of the Interim Report. The Committee does

not propose to repeal this in the Final Report. However, the Committee finds it necessary to bring

to the Government's attention that, unless concerted and sustained efforts are made to set up new

manufacturing units with modern technology, the vaccine security scenario will be repeatedly

exposed to turbulent phases, similar to those we have experienced in the last two years. To attract

and retain experienced vaccine technologists/scientists who are in short supply in the market, the

Committee recommends that the pay scales applicable to the, scientific cadres be made applicable

to them. For project formulation/execution the government may engage on contract specialist

consultants of global repute at globally accepted compensation packages.

8 Organisational Restructuring

8.1 The Committee has observed that one crucial underlying cause for the malfunctioning of

the manufacturing units is the unsuitable organizational structure they are frozen in. Because of a

historical handicap the public sector vaccine/sera units have an organizational structure that

belongs to a past age - CRI. Kasauli and BCGVL. Guindy are still departmental undertakings:

while PIL. Conoor is a registered society. The Committee is unable to understand what purpose is

served in this day and age by keeping CRI. Kasauli and BCGVL, Guindy bound down as

departmental undertakings. These two undertakings are narrow-band, high-tech units. Most of the

officials and technical staff have specialist skills only in the line of manufacture of the limited

items produced there. Not many of them can be interchanged even within the three units under

review here. It is near impossible to find an official in the Directorate who could assist a

manufacturing unit in a technical problem relating to the manufacture of vaccines/sera. In a

previous part of the Report we have seen how the crisis situation in the three units was handled at

the highest level of the Directorate. It is unrealistic to expect results from these units when they

are tied down to the Directorate. The Committee would suggest that these units be made

Autonomous at the earliest, by registering them as a non-profit company under Section 25 of the

Companies Act, 1956 or under the Societies Registration Act, 1860. Since the units are fully

funded by the government, the government would, no doubt, like to assure itself that financial and

performance accountability can be enforced in the new organizational structure. The

organizational structure of an undertaking registered tinder the Societies Registration Act is not

new to government, and no serious problems of enforcing accountability have been faced in other

such institutions. Though there are not so many examples of government-funded Section 25 "non-

profit" companies, the better statutory oversight under the Companies Act. would make the 'non-

profit' company a safer option for the government to adopt. The Management Board would, no

doubt, be appointed by the government largely from the cadre of health officials. Regular

meetings of the Management Board would ensure adequate accountability both in financial terms

and by way of performance. Since the Management Board would have a large representation of

government officials, the extent of delegation of power would, no doubt, be fixed by the Board

consistent with the precedents of other autonomous organizations that are funded by government.

The re-arranged organizational structure would doubtless improve the operational flexibility of the

unit. As things stand today, with the administrative power concentrated in the Directorate in Delhi,

it may be six months before someone has the time to attend to an urgent requisition from the

distant unit. It is observed that Secy. (HFW) in his note dt. 3-12-07 (Annexure C), had also

suggested the organizational re-structuring of the units. However, he was thinking on the lines of

either converting them into separate PSUs. Or into one amalgamated one. The Committee is of the

view that amalgamating the three units that are so different, so distant and with such a disparity in

organisational culture, would serve no purpose - the cure may be worse than the disease. The

Committee feels that, with its suggestion of registering autonomous bodies under the Companies

Act/Societies Registration Act. each unit would get adequate operational independence to pursue

their own ideas without hindrance. To sum up, the Committee is of the considered view that the

units working as attached offices to Directorate - CRI, Kasauli & BCGVL, Guindy - are

completely hamstrung. It, therefore, recommends that the Ministry consider making them

autonomous by registering them independently under the Companies Act/ Societies Registration

Act. The Committee suggest that this should be done on priority basis with adequate financial

powers delegated to the management.

9. National Vaccine Security Advisory Board

9.1 The production, supply and use of vaccines/sera constitute a very critical part of the

health system. The issues that arise, and the decisions thereon, have far-reaching and long-term

effects. Experience in this area is very limited even amongst the specialist cadres of the Central

Health Service. The analysis of the process of examination of an issue related to vaccines requires

specialist advice from a number of disciplines. From the experience in this inquiry the Committee

feels that it would be unrealistic to expect the DGHS to cope with such issues. By closing the

public sector vaccine units for some period of time, we came perilously close to a major public

health disaster. Learning from this lesson, it would be appropriate to introduce an institutional

check that would make such a serious mis-judgment less likely. In this context, the Committee

recommends that the Ministry consider constituting a National Vaccine Security Advisory Board

to offer advice on policy issues relating to vaccines and sera, which could then be utilised by the

Ministry for taking policy decisions. The composition of the Board could consist of Public Health

Specialists. Pediatricians, Vaccine/Sera manufacturing technologists. Public Health

Administrators, Social Activists etc. The present period is one in which several vaccine-related

issues are frequently cropping up. The vaccine market is one of the most lucrative markets in the

drugs and pharmaceutical sector. A large number of developing countries are introducing

universal immunization programmes as a part of their social sector initiative; significant demand

for vaccine is raised from China and India. India itself requires 25 million doses of the primary

vaccines for its newborn/infants every year. Also, new and sophisticated vaccines are increasingly

coming into the market for a large range of new diseases. There is an increasing pressure from-

these commercial interests, backed by the technologists, to introduce more and more of the new

vaccines as a part of the bouquet of primary vaccines. Also, increasingly, vaccine manufacturers

are coming out with vaccine-combos, reducing the number of times the individual has to be

approached for completing the coverage. Most vaccine-combos are very expensive. A number of

complex technical questions have to be answered while determining the UIP policy, so that the

programme remains affordable and feasible for the country. In this situation a large number of

sensitive issues can be placed before the National Vaccine Security Advisory Board for its advice,

in order to assist the Ministry in taking the final call on them. Technical discussion in the

suggested Board will obviate the random motion of ideas that we saw in the Ministry when

considering the closure of the vaccine manufacturing units. The Committee is aware that there is

already an existing National Technical Advisory Group on Immunisation. However, it seems that

this Group only goes into technical aspects of production of vaccines and sera; the Committee is

of the view that there is a need or a Board to go into the- policy aspects of Immunisation - to bring

this about, either the remit and the name of the existing Group be changed, or a new National

Vaccine Security Advisory Board be constituted to advise on the vaccine policy issues.

9.2 In sum, the Committee recommends that the government consider constituting a National

Vaccine Security Advisory Board composed of the stakeholders (Public Health Specialists,

Pediatricians, Public Health Administrators, Vaccine Technologists, Social Activists, etc) to

advise the government on important issues relating to the National Vaccine Security policy.

Some additional comments made by Dr. VM Katoch (Member of the Committee) are placed at

Annexure L.

10. Summary

(i) The Committee was entrusted the task of reviewing the events and determining, the

reasons for the closure of the three public sector vaccine/sera units in the country - CRI.

Kasauli. PM, Conoor & BCGVL. Guindy. The said closure radically altered the vaccine security

scenario in the country and made it entirely dependent on the private sector manufacturers. The

following two years experienced uncertainty in vaccine availability, and the prices of the

vaccines required for the UIP rose sharply. The vaccine/sera scenario in the country - that, for

historical reasons, had remained quite secure in the past suddenly turned vulnerable. The

Committee was mandated to ascertain the reasons for the abrupt closure of the manufacturing

units and to set out a road-map for the revival of the units to make them compliant with rigorous

GMP standards.

(ii) The committee is constrained to observe that in the matter under review, it

became necessary for it to carry out a mini-archival research in order to

determine even the sequence of events, not to talk of the rationale or analysis of

the issue involved. After a thorough review of the record of the Ministry, and an

assessment of the process adopted in the course of the examination of the issue,

the Committee concluded that the Ministry had not maintained minimal

procedural standards in examining the issue before them. (Para 4.1)

iii) The Committee assessed that the Ministry (including the DGHS and the DCGI)

did not carry out an appropriately structured analysis of the sensitive issue under

review. The discharge of the responsibility of due diligence on the part of the

Ministry required that the various facets of the issue be discussed in a simple,

structured manner so that the pros and cons were transparent The Committee is

of the view that had this been done, the Ministry would not have come to a

conclusion to close the units in an abrupt manner. (Para 4.3)

(iv) In the view of the Committee, it is very much in the interest of India to maintain

a close working relationship with WHO to strengthen the voice of the

developing countries in the global health sector. The Committee is well aware of

the valuable services provided by WHO and has kept this in mind while

discussing the appropriate bi-lateral relationship between a national government

and the multi-lateral agency. (Para 4.4. 1.1)

(v) In order to maintain a harmonious working relationship, it is important to

accurately demarcate the boundary between the reach of WHO's advocacy and

the irreducible extent of exercise of sovereign authority by the Indian

government. No matter how useful WHO's advice may be, the NRA's sovereign

function under statute - of enforcing the manufacturing standards of drugs and

pharmaceutical units - cannot be discharged in partnership with an international

organization. Under the D&C Act and Rules, the DCGI is the apex point of the

Indian regulatory system. (Para 4.4.1.2)

(vi) The decision, to permit WHO to join the NRA in the inspection of the public

sector vaccine units, should have only been taken after explicitly recording the

reasons. Once they came to be associated with the inspections, their views on

GMP-compliance became the dominant ones. The Committee is of the view that

the decision to permit WHO to join the NRA inspection was not taken with the

necessary degree of application of mind and accountability. (Para 4.4.1.2)

(vii) It is seen that the decision taken by HFM on 10-5-07, to permit WHO inspectors

to be associated with the NRA inspection, is on the basis of an opaque note

stating that Secy. (HFW) has opined that we should not object to the

participation of WHO representatives in the NRA inspection. The note does

mention that in the past the Ministry had not agreed to this request from WHO.

However, there is just no analytical discussion as to why we should reverse the

earlier position of the government. This being a sensitive issue, the reasoning for

the decision should have been recorded explicitly. In this background, the

committee is of the view that the decision to permit WHO to join the NRA

inspection was not taken with the necessary degree of application of mind and

accountability. (Para 4.4.1.2)

(viii) WHO can prescribe any norm considered appropriate in its judgment for pre-

qualification of vendors for supply of drugs and pharmaceuticals for the

international programmes, so long as these norms are not arbitrary. The

functioning of the Indian NRA has no nexus with any inspection WHO may

carry out on behalf of international drugs/vaccine purchasers. WHO's inspection

would be only for the purpose of empanelling manufacturing units as pre-

qualified vendors; and, on the other hand, the independent inspection of the

NRA, under the authority of the D&C Rules, would be to determine compliance

with Indian GMP standards. (Para 4.4.1.3)

(ix) WHO does not exercise any supervisory authority over the Indian NRA. Hence

the question of de-recognition of the Indian NRA cannot arise. (Para 4.4.1.3)

(x) The eligibility of individual applicants should in no circumstances be contingent

upon whether public sector manufacturing units have been inspected by WHO

or whether these public sector manufacturing units, in the assessment of WHO

meet its GMP standards. The Committee fools that any move to consider private

vaccine manufacturers (who are otherwise compliant with WHO GMP norms)

as ineligible because WHO finds certain public sector units non-compliant,

would be arbitrary; this has no nexus with the objective of purchasing high

quality drugs/vaccines produced under the best possible GMP standards. (Para

4.4.1.3)

(xi) As a matter of administrative practice, in the normal course, the Ministry should

have obtained from WHO their position on this sensitive issue (of de-

recognition-of the NRA by WHO if the public sector units do not meet the

latter’s prescribed GMP norms), in explicit terms in writing. The Committee

considers it imprudent for the Ministry to arrive at a decision on this important

issue merely on the basis of impressions and conjecture of some officials in the

Indian administration. (Para 4.4.1.4)

(xii) The Committee would again suggest that the Ministry may consider entering

into a candid dialogue with the DG of WHO so that the country's position is

clearly understood by WHO and no unnecessary mis-understanding persists.

(Para 4.1.4.5)

(xiii) Even if we hypothetically assume that the exports to international health

programmes run the risk of being discontinued, the impact will be nominal, as

the value of these exports is miniscule compared to the aggregate national export

earnings of about US 180 billion annually. In the perception of the Committee,

the export earnings foregone, if such an eventuality arises, would be an

insignificant loss compared to the gain through enhanced Vaccine Security for

the country over the long run. (Para 4.4.1.7)

(xiv) A study of Schedule M reveals that it covers a vast array of specifications that

collectively impact on the quality of the manufacturing process. By their very

number, nature and span of application, all these standards cannot be met to the

fullest extent by every manufacturing facility. Also, legal compliance does not

require that each of the norms be individually met to the fullest extent, but rather

that the overall compliance of the various norms should be adequate. A

shortcoming in some of the areas does not automatically call for the

suspension/cancellation of the license. To legally carry out operations in India

the drugs and pharmaceutical units are required to substantially comply with the

standards set out under Schedule M of the D&C Rules subject to the

monitoring / assessment of the NRA/DCGI (Para 4.4.2.2)

(xv) The key provision under Schedule M for GMP standards for the production area

is: “The production area shall be designed lo allow the production preferably in

uni-flow and with logical sequence of operations." This is an over-arching

provision puts it beyond doubt that production in uni-flow and with logical

sequence of operations' is a desirable goal, but not a rigid mandatory

requirement. However, the various government functionaries in the course of the

processing in the Ministry, as also during inspections, have relied on the

incorrect assumption, that absolute adherence to the principle of uni-flo of

operational process is an-irreducible mandatory requirement under the GMP

standards. (Para 4.4.2.5)

(xvi) The abrupt implementation of inflexible GMP standards would serve no public

purpose: it would only bring about a crisis, as the operations of a larger portion

of the domestic drug sector would come to a halt. (Para 4.4.2.6)

(xvii) It is the view of the Committee that, by and large, the public sector vaccine units

have maintained the required minimum technical standard, and in tandem with

rigorous enforcement of product quality standards, have been able to provide

quality preventive /curative to the citizenry, (Para 4.4.2.9)

(xviii) On the basis of the observations during its site visits, the Committee concluded

that many of the deficiencies pointed out during the inspections are minor in

nature, and even the critical requirement – ‘production in uni-flow and logical

sequence of operations' - is substantially achieved in the existing production

lines. Para (Para 4.4.2. 10)

(xix) To achieve the ultimate optimization through the entire production line, a new

manufacturing line will have to be established by incorporating the essential

technical features in the original design. It is learnt that the Ministry plans to set

up new production lines at the three locations, taking into account the reasonable

estimates of time for the administrative processing of the scheme and

implementing the new facilities, the Committee felt that a total implementation

period of three years would be required. (Para 4.4.2. 11)

(xx) The existing production lines in the three units as upgraded after conclusion of

the incomplete works could safely be used till the new production lines are

commissioned. The standards set out in Schedule M of the Rules do not require

that all the specifications be met in the most rigorous interpretation of the norms.

The standards clearly say that the work area should be designed preferably to

allow production in uni-flow and with logical sequence of operations. The

Committee is of the view that it would be safe, and in public interest, to restart

the manufacturing activities in the existing production lines with immediate

effect. More explicitly, it was the view of the Committee that, the operation of

the units would, in the totality of the prevailing circumstances be in compliance

with the GMP standards. (Para 4.4.2. 12)

(xxi) To enable the restart of manufacturing operations Government would be

required to revoke the suspension, orders in respect of all three manufacturing

units. All three units had filed appeals against the suspension orders under Rule

85 (3) of the D&C Rules. 1945. (Para 4.4.2. 12)

(xxii) The manufacturing units at CR1. Kasauli and BCGVL. Guindy were holding

considerable quantifies of finished products with them, from the time of the

closure. The Committee felt that these should not be wasted and should be used

to bridge the supply gap at least in year 2010-11. In this backdrop, the

Committee recommended that the manufacturing units be advised that, after

confirming the quality of the products, these products he supplied under the UIP

before their expiry dates. (Para 4.4.2.13)

(xxiii) The Committee observed that not even one official in the Ministry had identified

the different aspects of the issue of the closure of the units and analysed it in any

systematic manner. The overall impression that the Committee gets is that the

process of examination of the issue had spun out of control, and no one at the

senior administrative level made any attempt bring it back on track. The

constructive responsibility for this would rest on the apex functionary of the

political and bureaucratic executive i.e. the then-HFM and the then- Secy.

(HFW). (Para 4.4.3.1)

(xxiv) The final decision taken by the DCGl to issue a show-cause notice dt. 13-12-07

was on the basis of the views approved by HFM. From a recapitulation of the

process, it will be seen that the crunch-decision was endorsed at the highest

levels in both the political and bureaucratic executive line-up of the Ministry.

The Committee has already expressed the view that the decisions to suspend the

licenses were both illegal and flawed. Responsibility for the Ministry's advice

that resulted in the decision would rest at two levels - the then-HFM and the

then-Secy. (HFW).( Para 4.4.3.2)

(xxv) Despite the fact that the DCGl independently took the final decision to suspend

the licenses, without any consultation with the Ministry, there is ample evidence

to show that the Ministry, including the apex levels of the political and

bureaucratic executive, was fully in the loop. In this background, the only

conclusion that the Committee can draw is that the Ministry at its highest

political and bureaucratic, levels, was associated with the Final decision for the

closure of the units. Thus, the constructive responsibility for the final decision

would also rest on the apex functionaries of the political and bureaucratic

executive i.e. the then-HFM and the then-Secy. (HFW). (Para 4.4.3.7)

(xxvi) The Committee noted that at no level was the duty - of ensuring a rigorous and

objective analysis - discharged with the necessary diligence. In fact, evidence

on record indicates that the conclusion had been treated as pre-decided.

(xxvii) A meeting was held on 17-18th Dec, 2007 between the then - Secy.(HFW) and

the then - DCGl on the side of the Ministry, and ADG and his team from the

side of WHO regarding the GMP standards of public sector units. DCGl has

recorded that in this meeting, the Ministry had agreed to suspend/cancel the

licenses of the public sector units by 15-1-08.This assurance gave an

unmistakable indication that action against the manufacturing units was pre-

decided. There is nothing on the record to show that the approval of the then-

HFM had been obtained before giving the assurance to WHO. Also, there is

nothing on record to show that the then-HFM was informed by the then-Secy.

(HFW) about the assurance post-facto. (Para 4.4.3.9)

(xxviii) A pre-decided conclusion ab-initio vitiates a quasi- judicial proceeding. Taking

into account the tenor of the notes, the route the files had taken and the issues

which were pointedly ignored, the Committee cannot escape the perception that

the conclusion was pre-decided. In view of this finding, and regardless of all

other considerations. DCGI’s order of suspension dt. 15-1-08 would have to be

treated as null and void. Responsibility for the unilateral assurance promising

closure of the units by 15-1-10 would rest on the apex functionary of the

bureaucratic executive i.e. the then -Secy. (HFW). (Para 4.4.3.10)

(xxix) Till the new production lines are commissioned, there does not seem to be any

reason to stop manufacturing the vaccines/sera in the facilities available in the

existing production line, which in some cases have been significantly upgraded,

and in others, are undergoing upgradation. While operating the existing

production line, the management will have to ensure that their product conforms

to the product standards prescribed in the D&C Rules in every respect. The

Committee is of the considered view that at the time of issue of the suspension

orders, the public sector units were substantially complying with the letter and

substance of the GMP standards, set out under Schedule M of the D&C Rules.

The contrary assessment in the inspections in the latter half of 2007 was largely

on account of a mis-reading of the statutory requirements of the GMP standards,

as discussed in an earlier section of the Report. In the period after the closure,

many of the deficiencies listed in the inspection reports have been rectified and

action is underway to rectify the remaining deficiencies. Therefore, on restarting

after upgradation, the compliance level of the units would be superior to that

existing prior to closure. (Para 4.4.4.2)

(xxx) The impression given in certain circles that, the products from units conforming

to Indian GMP standards are inferior to the products from units conforming to

WHO recommend standards is baseless. The charge that is sometimes made -

that the Indian government is providing sub-standard vaccine/sera to its citizens

under the UIP - is an unfounded assertion (Para 4.4.4.3)

(xxxi) An overview of the entire record leads the Committee to the conclusion that,

while the lower level of the DCGI's office may have failed to put the issue in" its

correct perspective, at least they participated in some manner in the process of

decision-making. However, the Committee is constrained to note that the higher

levels of the Directorate of Health Services have not discharged their

responsibility as the technical advisors to the Ministry. Also, the Ministry

permitted the DGHS to distance itself from the policy process without demur.

(Para 4.4.5.2)

(xxxii) Ordinary prudence demands that the sources of supply be divided between the public and

private sector producers, so that the possibility of disruption of the supplies, on account of an

unforeseen crisis in commercial production, is minimized. The Committee observes that by

reducing public sector vaccine supply to zero, in one stroke a crippling blow had been inflicted

on the health security of the country. (Para 4.4.6.1)

(xxxiii) With our fortuitous head start, we are in a unique position to consolidate our

vaccine security. Also, with our low cost of production, and excellent product

quality standards, we are in an advantageous position to become the preferred

source of vaccine supplies to the countries of the developing world. In this

backdrop, the Committee is of the view that the country should try to

consolidate its historical advantage rather than becoming wholly dependent on

uncertain private commercial sources. (Para 4.4.6.2)

(xxxiv) By closing down the existing public sector vaccine production units in advance of

the commissioning of the integrated vaccine complex, the country would have

exposed itself to vaccine insecurity for five years, or an even longer period.

However, the establishment of .the new Integrated Vaccine Complex, along with

the installation of new production lines at the existing three locations, will

eventually greatly-increase the availability and reinforce the nation's vaccine

security. (Para 4.4.6.4)

(xxxv) The NRA is required to satisfy itself that overall the unit meets the irreducible

level of required compliance. The compliance with the norms has to be judged

by the NRA in the context of a variety of circumstances, including the

technology level of the unit, the design of the existing unit, the scope of change

looking to the physical lay-out of the unit, considerations of the health security

of the country, etc. In the context of the above-stated legal position, the Ministry

should have carried out an evaluation process to come to a decision on the issue

of closure of the units. The Committee is of the considered view that the then

functionaries in the ministry failed to discharge their responsibility (Para

4.4.7.2)

(xxxvi) AII in all the decision of the Ministry, both in legal terms and on consideration

of the merits, was flawed. Because the outcome of the evaluation process had

been pre-decided the entire process was null and void. On the other hand, on

consideration of the pros and cons fronm the view point of public interest, the

decision was not justified. In the view of the Committee, the palpably incorrect

decision of the Ministry - based on an illegal procedure and a Flawed

appreciation of the issues - was against broad community interest. (Para 4.4.7.4)

(xxxvii) Analysis of the data received from the Ministry, and also the observations during

the visits to the manufacturing facilities, had led the Committee to the

conclusion that the post-closure situation-was critical, for which reason some of

the Committee's recommendations needed to be submitted to the government

immediately. In these circumstances, the Committee submitted an Interim

Report dt. 5th Feb. 2010 with certain recommendations, that required

implementation without delay. Four significant recommendations from the

interim Report have already been implemented by the Ministry. (Para 4.4.7.5)

(xxxviii) To insulate the UIP from price and supply shocks, a cardinal principle of public

health policy requires sourcing of the vaccines from public sector manufacturing

units to a substantial extent. (Para 5.1)

(xxxix) Some of the deficiencies listed in the inspection reports relate to the overarching

objective of the GMP - to design the work area 'to allow the production

preferably in uni-flo and with logical sequence of operations. In the view of the

Committee the key-word in the provision is 'preferably'. Quite obviously this

word was introduced to imply that the principle of logical sequence of

operations would be enforced to the extent it is possible to optimise the working

in the circumstances in which the manufacturing units operate. (Para 6.2)

(xl) Within the given space/plot constraints at the three locations, much has been

achieved by the rationalization of the flow of men and material in the course of

the manufacturing process. In fact, in all the units, within each section of the

manufacturing process, the lay-out and the manufacturing sequence has been

optimized. It can safely be claimed that within each section of the manufacturing

line, "production in uniflo and with logical sequence of operations' has been

achieved. (Para 6.2)

(xli) Taking into account the reasonable estimates of time for administratively

processing the scheme and implementing the new facilities, the Committee feels

that an implementation period of three years would be required. (para 6.2)

(xlii) The Committee considers it necessary to record that the government has been

somewhat tardy in funding and implementing the plans for radical improvement

in the production facilities. Even after the new GMP norms came into effect on

1-7-05, the aggregate budgetary plan allocation for the three public sector units

has only been of the order of Rs. 64 crores. a sum that is grossly inadequate to

set up new, modern production lines. Looking over this span of the future

scenario, it is imperative for the country to establish at the earliest, new

production lines at the three locations by incorporating in their basic design all

the vital elements of the GMP standards. The Committee therefore, recommends

that the revocation of the suspension of the license of the units be made subject

to the condition that a new line for production of vaccine/sera will be set up at

the three locations within a period of three years. (Para 7.1)

(xliii) The Committee has observed that one major underlying cause for the

malfunctioning of the manufacturing units is the unsuitable organizational

structure they are frozen in. The manufacturing units, currently working as

attached offices to the Directorate - CRI, Kasauli & BCGVL, Guindy - are

completely hamstrung in their operations. The Committee, therefore.

recommends that the Ministry consider making them autonomous by registering

them as companies/societies under the Companies Act/Societies Registration

Act. (Para 8.1)

(xliv) The Committee recommends that the- government consider constituting a

National Vaccine Security Advisory Board composed of the stakeholder-(Public

Health Specialists. Pediatricians, Public Health Administrators. Vaccine

Technologists, Social Activists, etc) to advise (he government on important

issues relating to the National-Vaccine Security Policy. (Para 9.1 )

Shri Javid Chowdhury Dr. V.M. Katoch

Former Secretary Secretary

Ministry of Health & Family Welfare Dept. of Health Research

(Chairman) (Member)

Dr. R.N. Salhan Shri Vineet Chawdhry

Former Additional DGHS Joint Secretary

(Member) Ministry of Health & Family Welfare

(Member - Secretary)

Annexure A

Summary of points made by Dr. A. Rarnadoss,

Former HFM on 13-5-2010

During my tenure as HFM I have annoyed many lobbies - health lobby, pharmaceutical lobby,

food lobby & medical education lobby. Also, there are groups that oppose my position on social

issues. I have earned many enemies in Delhi because of what I did as Minister in the last five

years. These vested interests are behind the media campaign against me, which coincided with the

Parliament session, They have created a media campaign that I was responsible for shutting down

the vaccine units.

I feel that the Interim Report of the Committee is biased - this has been framed to please someone.

This does not take into account the real situation. The units have not been closed only the licenses

have been suspended because these three units were not compliant with GMP standards.

No pharmaceutical or vaccine unit operating in the country is non-compliant with the GMP

standards. We had shut down 2000 drug units because of non-compliance with GMP standards.

Under me law, we could not permit the vaccine units to be non-compliant while enforcing the

GMP standards for the other units. People were talking that the State was supplying poor quality

vaccines under the UIP for the national programme.

I have seen top-of-the-line production units in Europe. USA & Australia and I would like my

country to have comparable facilities. Our manufacturing facilities are heritage institutions - two

over a century old and one over sixty years old. These institutions suffer from a space constraint

and are cluttered. A completely new production line was required which would take three years.

The decision to suspend the licenses was not a sudden one - it was discussed for long with the

Secy.. DGHS & DCGI.

WHO's views were also one of the factors. The GMP standards were first introduced in year 2001.

We gave several extensions to the vaccine units to become compliant. By year 2005 all

manufacturing units had become complaint except the …………………… action was taken n the

Ministry to remedy the defects pointed out in various inspections from year 2001 should also be

recounted in the Report. The adverse situation did not arise all of a sudden in year 2007. Whether

any steps were taken from year 2000 to upgrade the facilities to ensure compliance should be

recounted. My officers did mention to me that WHO was threatening to disqualify the NRA - the

NRAs of Viet Nam and Indonesia had been de-recognised.

The vaccine technology in the world is of a different standard. There are so many new vaccines

and combo-vaccines. The public sector units do not have the competence or technology to produce

these products. The vaccine units at Connor and Guindy did not have a good reputation: they are

very old. There were frequent strikes there. In the various inspections many defects wore pointed

out. What action was taken by the Ministry to rectify them over the years? Not enough

upgradation was carried out. My officials came to me and said the WHO was threatening to cancel

NRA recognition because of this. The background leading to the suspension of the license should

be given in the Committee's Report. It is not correct to say that the suspension of the license

jeopardised the national immunisation programme.

On the basis of a technical report we took a decision to set up an integrated vaccine complex at

Chengallapatu – R&D, vaccine testing centre, DCGI office. This is well-located - half an hour

from the airport and one hour from the seaport. HLL is an appropriate agency for carrying out his

project. WHO can offer technology. But now the project is stalled. This would have improved

global availability of vaccines. Today one dose costs three hundred rupees. From the vaccine park

this would be available at fifteen rupees. This would bring down global vaccine prices. Suspension

of licenses did not lead to insecurity. There may have been occasional shortages. Meetings were

held and the issues resolved. Firm action was taken when private suppliers did not meet delivery

dead-lines. The suppliers were even threatened with black-listing.

The terms of reference require examination of the issues in the historical, technologies-

administrative and other perspectives. This has not been done in the Interim Report. Under the

D&C Act authority is with the DCGI: they need not rely on the Ministry in exercising their

authority.

Maintenance of high GMP standards is important for the country's credibility. Indian regulatory

authorities should be accepted by the first world countries.

Annexure C

Chronological Account of Process on File No. X-11026/1/2006-D

S.

No.

Date Substance of Note Note initiated by Note set to

1. 5-4-07 Note seeking directions of HFM on whether to

permit WHO team to inspect the public sector

vaccine manufacturing facilities. Issues

highlighted: (i) Pre-qualification of private

sector vaccine exporters contingent upon

favourable assessment of NRA by WHO team;

(ii) WHO expects the public sector

manufacturing units to conform to Schedule M,

as also to their other requirements of pre-

qualification; (iii) if NRA is de-recognised by

WHO, private sector vaccine manufacturers

will lose about Rs.400-500 crores of annual

exports to UN programmes; (iv) in year 2002

the Ministry had disallowed the WHO

inspection of public sector vaccine

manufacturing units as that would tantamount

to WHO exercising regulatory control over the

NRA; (v) Government will have to shut down

production in its existing public sector units.

Appropriate up-grading of the public sector

facilities will take at least two years – impact

on the availability of vaccines for the public

health programmes will have to be assessed.

DCG(I) DG

2. 16-4-07 No substantive comment. DG JS/Dir(AT)US(D)/

SO(DFQC)

3. 26-4-07 ……….. of DCGIs note submitted for taking a

policy decision as to whether WHO team may

be permitted to inspect public sector vaccine

manufacturing units

SO(D) US(D)/Dir(AT)

4. 3-5-07 File sent for further action as per the discussion

at the meeting taken by Secy. (HFW) on 3/5.

Dir(AT) DCGI

5. 3-5-07 Proposal for permitting participation of WHO

representatives in inspection of public sector

DCG(I) DG/Secy. (HFW)/

HFM

undertakings engaged in vaccine manufacture,

as decided in meeting taken by Secy. (H),

submitted for approval of HFM. Other issues in

DCGI’s note dt. 5-4-07 not touched upon.

6. 26-6-07 Composition of WHO inspection team and

proposed programme submitted for approval.

DCG(I) DG/Secy. (HFW)

7. 22-10-07 The note recorded the discussion in the meeting

taken by Secy. (H) on 11-9-07 with reference

to WHO’s observations on the basis of the

NRA inspection. The decision at the meeting

were: (i) the public sector manufacturing units

wind-down operations by stopping

procurement of raw materials and production;

(ii) they urgently prepare a plan for setting up

new manufacturing facilities; (iii) Efforts be

made by the UIP Div. To build up buffer stocks

to meet possible shortages.

The note recorded the following decisions at a

subsequent meeting taken by HFM: (i)

Ministry should take up with WHO HQs the

need for a longer period for up-gradation of the

facilities. A team of senior officers be sent to

Geneva for this; (ii) immediate steps be taken

to improve the manufacturing facilities by

renovation / new facilites, to comply with the

deficiencies pointed out by WHO; (iii) The

plan to set up a Vaccine Park at Chengallapatu

immediately be drawn up.

DCG(I) DG

8. 25-10-07 No substantive comments GD JS(DP)9. 22-10-07

Parallel note

floated on the

same File No.)

Detailed notes on the deficiencies pointed out

by the WHO in the NRA inspection. The main

deficiencies pointed out were: (i) Lack of

quality assurance system for the regulatory

DCG(I) DG

procedure; (ii) Lack of clear procedure for

dossier review (iii) Lack of defined recall

procedure; (iv) Absence of SOPs for the

technical functionaries; (v) if all manufacturing

units (public and private) do not meet WHOs

satisfaction for GMP, the NRA would be

derecognised, rendering even the private sector

units ineligible for pre-qualification. Note

proposed an interim reply to WHO committing

to the compliance of all the points, except the

main point i.e. action against PSU – which was

under examination then.

10. 23-10-07 No substantive comments DG DCGI/JS(DP)11. 31-10-07 Note on the Executive Summary of WHO’s

Assessment of the NRA. Proposal to negotiate

with WHO to provide more time for PSUs to

comply with GMP requirements and therefore

not to link NRA assessment to de-registration

of public sector vaccine manufacturers.

Suggestion that PSUs be directed to come up

with their action plans.

JS(DP) AS(DG)

12. 1-11-07 Raised some queries. Directed that the issues

be discussed between JS (DP), JS (Bud.) &

DCGI. No further action was taken – matter

petered out.

AS(DG) JS(DP)

13. 3-12-07

(Pt. File with

unchanged

number)

Reminder to expedite the matter regarding draft

reply to be sent to WHO before 05.12.2007.

DCG(I) JS(DP)

14. 6-12-07 Follow up with PS to HFM for the file having

draft reply to be sent to WHO before

05.12.2007 reportedly approved by Secretary

(HFW) and marked to HFM for approval on

04.12.2007.

DCG(I) PS to HFM

15. 14-12-07 Note recording the decisions taken by HFM in

the meeting held on 13.12.2007. The following

decisions are mentioned: (i) To issue show

cause notices to CRI, Kasauli, PII, Coonoor

and BCGVL, Guindy for GMP compliance, (ii)

to ask the units to give a time-frame for

compliance of the deficiencies pointed out by

WHO team; and (iii) to make a presentation to

the Expert Body of WHO regarding India’s

response to the assessment made by

……………

DCG(I) Secretary (HFW)

16. 15-1-08 Note on NRA assessment and decision taken in

the meeting taken by Hon’ble HFM on

13.12.2007 – Show cause notice issued to CRI,

Kasauli, BCGVL, Guindy and PII, Coonoor on

14.12.2007.

Dr. C. Sokhey DCG(I)

17. 16-1-08 Note recording the commitment made by Secy.

(HFW) at a meeting held on 17-18 Dec., 2007

with ADG, WHO and others when DCGI was

also present, to the effect that the licenses of

the public sector manufacturing units would be

suspended / cancelled by 15-1-08. Also that the

existing stocks of bulk vaccines on that date

would be destroyed. In quid-pro, the existing

units on the WHO list of pre-qualified

tenderers would be retained. DCGI also reports

that accordingly the licenses of the three units

have been suspended on 15.1.08.

DCGI DG/Secy (HFW)

Annexure D

Chronological Account of Process on File No. X –

11026/1/2006 -D (pt. file)

S.

No.

Date Substance of Note Note initiated

by

Note sent to

1. 27-11-07 Reminder on part file with draft letter to

WHO on action assured on all issues

except closure of PSUs

DCGI DG

2. 27-11-07 No comment DG JS(DP)/AS(DG)

3. 28-11-07 Inquires on plan-of-action of PSUs. Says

draft letter missing. Suggests letter to DG,

WHO

AS(DG) JS(BKP)

4. 1-12-07 Highlights of WHOs inspection report of

NRA. Recalls decisions at meeting taken

by Secy, on 11-9-07 and thereafter at

meeting taken by HFM. Mentions two

options: (i) Negotiate with WHO for

more time;; (ii) move towards a gradual

shut-down and make arrangements for the

UIP. Directions were sought.

JS (BKP) AS(DG)

5. 1-12-07 Suggests issue of show cause notice for

suspension of license; move towards

gradual shut-down; move for integrated

unit; take up issue with DG, WHO during

ensuing visit.

AS(DG) Secy.(HFW)

6. 3-12-07 Supports action suggested by AS (DG). Secy. (HFW) M(HFW)

7. 13-12-07 Discussed with Secy. (HFW) and

approved suspended/ cancelled by 15-1-

08. Also that the existing stocks of bulk

vaccines on that date would be destroyed.

In quid-pro, the existing tenderers would

M(HFW) Secy.(HFW)

be retained. DCGI also reports that

accordingly the licenses of the three units

have been suspended on 15.1.08.

Annexure E

F. No. M – 11035/3/06/EPI

S.

No.

Date Substance of Note Note initiated by Note sent to

1. 4-1-08 Recounts the issue of notice by DCGI for

suspension of licenses. States DCGIs

legal authority to take action. Gives a

summary account of deficiencies

pointed out in the inspections.

Recounts the proceedings In the

Ministry. Gives a gist of

representation of CRI, Kasauli. Points

out that there is confusion in the

minds of the management of the

units, as also in the Ministry. Sets out

options for inking decisions;

tentatively suggests continuation of

the operations of the units.

ADG (EP) DDG(NSD)/Addl.

DG/DG

2. 9-1-08 DG records that he has been informed by

DCGI that the decision for

cancellation has been taken as per the

not with the approval of the highest

authority. Directs that the plan to

make good the deficiencies should be

made implemented expeditiously.

DG Addl.DG/DDG

(NSD)

3. 24-1-08 Refers to representations from CRI, Kasauli

and BCGVL, Guindy in response to

show-cause notices. Seeks decisions

on post-closure actions.

ADG(EPI) DDG(NSD)/DG

4. 29-1-08 Observes that the action should be taken at

the manufacturing units and in the

EP! Division. Finds fault with them

for not taking initiative.

DG Addl. DG/ADG

(EPI)

Annexure F

Note of Dissent - Vineet Chawdhry - Member-Secretary - Reference para 4.4.4.2

'I am attaching herewith extracts from the SFC memo circulated in 1999 and approved by the

ministry in 200! regarding renovations at CRI Kasauli. The memo acknowledges that the facilities

at CRI Kasauli do nor meet cGMP requirements and the requirements of schedule M. The

principal requirement of the SFC memo has been stated as " construction of new building and

partial renovation of the existing building of Triple vaccine to house the facilities for

manufacturing above mentioned vaccines and quality control of the vaccines and filling and

supply of the vaccines in a uniflo system." This SFC was approved in 2001 and work was awarded

to Ms HSSC. We are in the process of fixing responsibility on HSCC and officers of Dte GHS for

not executing the project properly on account of which CRI could not comply with statutory

standards. In view of this, how can the committee now take a position that CRI Kasauli was

compliant with the requirements of Schedule M and that a uniflow system was only a preferable

requirement and hence not essential. I have a feeling that the Committee has not seen such related

documents including the process of assessment of NRA by the WHO and its implications for

India. I have, therefore, been repeatedly suggesting that we need to discuss these issues with the

officers who were handling 'his matter. Unfortunately, this has not been agreed to by Mr. Javid

Chaudhary. I would, therefore, reiterate that we need to discuss these issues with the officers as

suggested by me earlier. Otherwise, it is not possible for me to support the findings of the

committee that CRI Kasauli was eGMP compliant.’

Annexure G

Supply of Vaccines from Public and Private Sector Manufacturing Units in the period 2004-

05 to 2005-06

Vaccine Year 2004-05 Year 2005-06

Total Supply

PublicSectorSupply

PrivateSectorSupply

%Public to Private

Total Supply

PublicSectorSupply

PrivateSectorSupply

%Public to Private

(Lakh doses)

(Lakh doses)

(Lakh doses)

(Lakh doses)

(Lakh doses)

(Lakh doses)

BCG 482 482 0 100 637 637 0 100

DPT 1289 443 846 34 770 520 250 68

DT 330 177 153 54 210 210 0 100

IT 1438 426 1012 30 768 270 498 18

Supply of Vaccines From Public and Private Sector Manufacturing Units in the period 2006-

07 to 2007-08 - Contd.

Vaccine Year 2004-05 Year 2005-06

Total Supply

PublicSectorSupply

PrivateSectorSupply

%Public to Private

Total Supply

PublicSectorSupply

PrivateSectorSupply

%Public to Private

(Lakh doses)

(Lakh doses)

(Lakh doses)

(Lakh doses)

(Lakh doses)

(Lakh doses)

BCG 895 895 0 100 800 800 0 100

DPT 1000 920 80 90 1680 920 760 55

DT 332 290 42 90 425 335 90 79

IT 1212 1062 150 88 1235 1235 0 100

Supply of Vaccines from Public and Private Sector Manufacturing Units in the period 2008-

09 to 2009-10 - Contd.

Vaccine Year 2004-05 Year 2005-06

Total Supply

PublicSectorSupply

PrivateSectorSupply

%Public to Private

Total Supply

PublicSectorSupply

PrivateSectorSupply

%Public to Private

(Lakh doses)

(Lakh doses)

(Lakh doses)

(Lakh doses)

(Lakh doses)

(Lakh doses)

BCG 600 0 600 0 1026 0 1026 0

DPT 1440 0 1440 0 1026 0 1026 0

DT 475 0 1700 0 1370 0 1370 0

IT 1700 0 1700 0 1370 0 1370 0

Annexure J

Universal Immunisation Programme

Achievement for the period of 2009-10

Sl.No.

State/UTs/India TargetInfants

(2009-10)

BCG DPT3 OPV3 Measles FIC*(12-23 months)

Achievement Coverage Achievement Coverage Achievement Coverage Achievement Coverage Achievement Coverage1. A&N islands 7.000 5,195 74.2% 4,792 68% 4,845 69.2% 4,732 67.6% 5.082 72.6%2. Andhra Pradesh 1.480.000 1,539.151 104.0% 1,507.164 101 8% 1.508.254 101.9% 1.498.743 101.3% 241.204 16.3%3. Arunachal Pradesh 26.000 16.040 61.7% 12.753 48.9% 12.881 49.5% 12,301 47.3% 11,235 43.2%4. Assam 682.000 672.623 98.6% 611,784 89.7% 610,139 89.5% 590,543 86.6% 149,893 22.0%5. Bihar 2.655000 2,258,13 85.1% 2,236.885 84% 1 2,117.930 798% 1,948.700 73.4% 1,159,124 43.7%6. Chandigarh 20.000 24,508 122.5% 16.457 82.3% 16,413 821% 17.475 87.4% 3,585 17.9%7. Chhattisgarh 593,000 594,80 100.3% 578.978 97.6% 580.782 97.9% 571.692 96.4% 185.335 31.3%8. Dadra & Nagar

Haveli

9,000 8,057 89.5% 8,031 89.2% 8.047 89.4% 7.725 85.8% 2,901 32 2%

9. Daman & Diu 4.000 959 24.0% 1.123 28.1% 1.123 28.1% 1,049 26.2% 1,602 40.1%10. Delhi 309,000 268,889 87.0% 226.366 73.3% 227.857 73.7% 219.370 71.0% 115,753 37.5%11. Goa 25,000 24,332 97.3% 19.046 76.2% 22.983 91.9% 22,303 89.2% 3,719 14.9%12. Gujarat 1.263.000 1.236,87 97.9% 1.163.000 93.7% 1.172.698 92.9% 1,139.887 90.3% 652,791 51.7%13. Haryana 549,000 602,714 109.8% 565.811 103.1% 564,871 102.9% 552,163 100.6% 462.534 84.3%14. Himachal Pradesh 111.000 131,26 118.3% 127,210 114.7% 127,358 114.7% 123.899 111.6% 971 0.9%15. Jammu & Kashmir 207,000 197.141 95.2% 227,907 110.1% 227.957 110.1% 237,015 114.5% 195,103 94.3%16. Jharkhand 767.000 687,395 89.6% 685,434 89.4% 686,090 89.5% 636,987 83.0% 359,159 46.8%17. Karnataka 1,110,000 1,049,76 94.6% 1.024.456 52.3% 1,117,867 100.7% 967,942 87.2% 716.669 64.6%18. Kerala 496,000 522.698 105.4% 539,068 106.7% 539.496 108.8% 504,701 101.8% 257.213 51.9%19. Lakshadweep 1.000 514 51.4% 587 58.7% 583 58.3% 471 47.1% 430 43.0%20. Madhya Pradesh 1.867,000 1,616,41 86.6% 1.664.357 89.1% 1.653,330 88.6% 1,684,808 90.2% 681.776 36.5%21. Maharashtra 1,932,000 2,049,22 106.1% 1.871,277 96.9% 1.866,707 96.6% 1.825.486 94.5% 563,811 29.2%22. Manipur 35,000 50.460 144.2% 45,713 130.6% 45,599 130.3% 41,319 118.1% 10,934 31.2%23. Meghalaya 59,000 76,084 129.0% 61.783 104.7% 61.479 104.2% 54,278 92.0% 127.383 215.9%24. Mizoram 18,000 23.687 131.6% 23.732 131.8% 23.256 129.2% 21.833 121.3% 12,601 70.0%25. Nagaland 38,000 23,030 60.6% 23,433 51 7% 23,816 62.7% 22,659 59.6% 19.530 51.4%

26. Orissa 804,000 766,288 95.3% 772.067 96.0% 758,366 94.3% 748,451 93.1% 453,221 56.4%27. Puducherry 19.000 36,179 190.4% 15,367 80.9% 16,716 88.0% 15.368 80.9% 3.664 19.3%28. Punjab 459,000 462,624 100.8% 452,066 98.5% 452,135 98.5% 430.929 93.9% 111.625 24.3%29. Rajasthan 1,730.000 1.757.754 101.6% 1.657.284 95.8% 1.650.680 95.4% 1,604.341 92.7% 772,614 44.7%30. Sikkim 11.000 8,045 73.1% 8.811 80.1% 8,105 73.7% 8.590 78.1% 249 2.3%31. Tamil Nadu 1,019,000 1,080.319 106.0% 1.086.414 106.6% 1 1,076.147 105.6% 1,092.700 107.2% 92,737 9.1%32. Tripura 58.000 48,371 83.4% 43,702 3% 43,274 74.6% 41.408 71.4% 11,908 20.5%33. Uttar Pradesh 5.379.000 5,667.033 105.4% 5,455.016 101:4% 5.509.199 102.4% 5.236.357 97.3% 2,366,016 44.0%34. Uttarakhand 189.000 198,889 105.2% 201.098 104.4% 194.616 103.0% 181.690 96.1% 102,533 54.3%35. West Bengal 1.523,000 1,616.206 106.1% 1,559.288 102.4% 1.487,271 97.7% 1,446.366 950% 518.258 34.0%

INDIA 25,454,000 25,321,69 99.5% 24,518,446 96.3% 24,418,870 95.9% 23,514,281 92.4% 10,373,163 40.8%

FIC: Fully Immuinized Children

Annexure K

Plan Allocation / Expenditure in PIL, Conoor, CRI,

Kasauli & BCGVL, Guindy

S. No.

Year PII, Conoor BCGVL, Guindy CRI, Kasauli

Budgetary Allocation Plan (Rs. Corers)

Expenditure (Rs.

Crores)

Budgetary Allocation Plan (Rs. Corers)

Expenditure (Rs. Crores)

Budgetary Allocation Plan (Rs. Corers)

Expenditure (Rs. Crores)

1. 1995-96 1.03 0.79 - - 2.35 1.592. 1996-97 0.85 1.25 - - 8.32 7.163. 1997-98 1.10 0.88 0.60 0.60 4.60 3.704. 1998-99 1.50 1.29 1.50 1.50 5.14 3.505. 1999-00 2.00 1.36 1.80 1.80 3.36 5.306. 2000-01 2.50 2.25 0.50 0.50 5.35 5.147. 2001-02 6.00 3.72 1.00 1.00 4.00 4.008. 2002-03 3.00 4.87 1.70 1.70 3.38 3.389. 2003-04 7.50 4.21 2.56 1.90 5.00 5.0010. 2004-05 6.96 7.98 1.73 1.62 5.06 5.0611. 2005-06 3.08 7.64 2.12 …… …. 5.9812. 2006-07 9.47 11.10 1.27 1.27 6.52 6.5213. 2007-08 10.00 10.28 3.90 3.69 4.62 4.5514. 2008-09 11.46 8.81 2.05 0.50 4.48 4.5215. 2009-10 11.26 11.43 0.91 0.39 6.79 6.71

Annexure L

Additional points

The Committee is submitted its report according to its terms of reference (i) To review the reasons for

suspension of the manufacturing licenses of the three institutes, from the historical, technological,

administrative/ organizational and other perspectives and (ii) To review the road map for the revival to

make them Good Manufacturing Practices (GMP) compliant.

While we have absolute unanimity in our views regarding the proposed road-map for revival, and about

validity of decision to suspend the licenses, in my view there should have been better analysis of

reasons specially of historical and other related aspects so that we do not land up in such situations,

avoid repeating such mistakes and perform better:

3.1. There should have been more data to analyse. A chronology of events listed from 12th March

2001 to 2010 was recently provided in the last butch of papers received before our final meeting on I6lh

September 2010 ( DGHS/ DCGI) . This shows that inspections in 2004 and 2006 ( in which WHO was

associated) had pointed out some deficiencies Sh. Vineet Chawdhry. Joint Secretary, the then Member

Secretary had also pointed out that restructuring of the facilities was also planned much earlier ( may be

8-10 years back) so as to make them equivalent to national / international standards. No records of steps

taken during those critical years (before 30th June, 2005 and up to April 2007) have been presented

despite my repeatedly asking for the same. It appears that there was little or no action between June

2005 to April 2007 when finally the process towards suspension of their licenses began. Our historical

analysis does not capture those important events. In my view this was important as history should teach

us lessons for the present and future.

3.3. Chronology of events presented now shows that WHO was possibly associated with

inspections even in 2004.

4.4.2.10. On the basis of the observations during ………………………………… that many of the

deficiencies pointed out are minor in nature, and even the key requirement -"production in uni-flow and

logical sequence of operations" - is substantially achieved in the existing production lines. In my view

these minor deficiencies should have been corrected much earlier if proper and adequate

internal/assessments and implementation mechanisms re in place. We should undertake this assessment

and take appropriate steps now.

4.4.3.1. It was concluded that the flawed decision was the result of multiple human errors and that the

constructive responsibility for this would rest on the apex functionaries of the political and bureaucratic

executive i.e. HFM and Secy. (HFW). I do not. think that this was a pure human error. There was a

clear thinking to be compliant with WHO prescribed standards which became the main goal lending lo

final decision to suspend the licenses.

4.4.3.6. Regarding the point of view presented by Former-HFM, we concluded "In totality, during his

meeting with the Committee, the Former-HFM did not mention a single point of significance that could

have improved the Ministry's case in defending the handling of this issue." While I am of the view

(same as other members of committee) that we should have decided the issue purely on the basis of our

GMP standards and national perspective without any directions from WHO, former HFM had main

emphasis on global standards.

4.4.3. 11. While I agree with the conclusions that in this case MOHFW was involved in the process of

giving commitments as well guiding the process and thus can not dissociate from responsibility of final

decision to suspend the licenses, in my view the opinion of Member Secretary about responsibilities of

DCG(I) and MOHFW is correct as a matter of principle. I would emphasize that functional autonomy

and thus the accountability of DCG(f) should be ensured for taking decisions on regulatory aspects as

per Indian law and guidelines.

4.4.5.1 and 4.4.5.2. It is logical to think that the contribution of the DGHS's advice should have been

decisive in this matter particularly on the issue of vaccine security. DGHS has interpreted that he was

not required to participate in policy making and it was the job of executive and political establishment.

There is nothing on record to establish that his active role in the decision making was insisted upon.

V. M. Katoch

Secretary, Department of Health Research

And Director-General. Indian Council of Medical Research

22nd September. 2010