Bureau Report | PHARMA REGULATION | BENGALURU, KARNATAKA, BHARAT (INDIA)
“Procedural Overreach or Public Health Necessity?” Karnataka Wholesalers Challenge FDA’s COA Mandate; Demand Pan-India Digital Solution
“The cumulative burden of these compliances consumes substantial time and resources, particularly for small and medium-scale wholesalers operating on minimal margins.” – KPRDO Representation to FDA Commissioner
The Karnataka Pharma Retailers & Distributors Organization (KPRDO) has submitted a detailed representation to the FDA Commissioner, Shri K. Srinivas, IAS, opposing the circular mandating Certificates of Analysis (COA) for all wholesale purchases. The organization argues that the requirement is operationally impractical without a pan-India digital infrastructure and raises significant questions about regulatory consistency, interstate trade, and stakeholder consultation. This legal analysis examines the representation in light of existing drug regulatory frameworks and recent developments at the central level.
Introduction: The Controversial Circular
On February 23, 2026, the Food and Drugs Administration (FDA), Karnataka, issued Circular No. FSDA/L.I.P/Others/2/2025, mandating that wholesalers procure Certificates of Analysis (COA) for all purchases from manufacturers. While ostensibly aimed at ensuring drug quality and combating spurious medicines, the circular has triggered strong resistance from the trade fraternity.
The Karnataka Pharma Retailers & Distributors Organization (KPRDO), representing pharmaceutical distributors across the state, submitted a detailed representation on February 28, 2026, to the Hon’ble Commissioner seeking revocation of the compliance requirement. The representation raises several legal and practical concerns that merit serious consideration by regulatory authorities.
Understanding the Certificate of Analysis (COA)
A Certificate of Analysis is a crucial document in pharmaceutical trade that confirms a finished product matches all quality standards and specifications. A standard COA includes batch number, manufacturing and expiry dates, composition and strength, microbiological testing, physical and chemical analysis, and pharmacopoeia compliance (IP/USP/BP) .
In international trade, COA is mandatory as it ensures the importer receives quality-verified, batch-tested medicine, boosting safety and regulatory trust . However, the question raised by KPRDO pertains to the procedural mechanism for domestic wholesale trade within India.
Legal Analysis of KPRDO’s Representation
1. The Burden of Proof and Regulatory Proportionality
KPRDO’s primary legal argument is that the requirement lacks proportionality – a well-established principle in administrative law. The organization contends that wholesalers handle “thousands of purchase transactions involving multiple batches on a continuous basis,” making batch-wise COA collection, verification, and maintenance an “enormous operational burden”.
The principle of proportionality requires that regulatory measures should not be more burdensome than necessary to achieve their objective. While ensuring drug quality is undoubtedly a legitimate state objective, the means adopted must be reasonable and practicable.
2. The Interstate Trade Conundrum and Legislative Competence
A significant legal issue raised pertains to interstate trade. KPRDO notes that Karnataka manufactures only a fraction of the drugs required in the state, with a substantial portion procured from manufacturers in other states. The organization argues that such a compliance mechanism should be implemented uniformly at a pan-India level through central authorities.
Under the constitutional scheme, “drugs and poisons” is Entry 19 in the State List, while “drugs” (as related to import and export) falls under Entry 84 of the Union List. Post-GST, interstate trade operates seamlessly without traditional boundaries. If Karnataka enforces COA mandates unilaterally, it could create barriers to interstate trade and commerce, potentially violating Article 301 of the Constitution which guarantees freedom of trade throughout India.
3. The Digital Infrastructure Gap
KPRDO has proposed the creation of a centralized digital portal, similar to the GST system, where manufacturers could upload batch-wise COA details directly, enabling authorized access to wholesalers and regulatory authorities.
This proposal finds strong support in existing government initiatives. The Central Drugs Standard Control Organization (CDSCO) launched the SUGAM portal in 2014, which has revolutionized the Indian pharmaceutical sector by promoting transparency, simplicity, and accountability. By October 2024, SUGAM registered over 31,000 users, processed more than 419,000 applications, and issued 356,000 approvals .
More recently, in March 2025, CDSCO and C-DAC entered into Memorandums of Understanding for the maintenance and enhancement of the SUGAM Portal and the development of the Online National Drug Licensing System (ONDLS) for State Pharmaceutical Regulatory Processes . This initiative aims to establish connectivity between all 34 CDSCO centers across the nation, pharmaceutical industries, and state authorities .
The National Single Window System (NSWS) Portal, established on January 1, 2024, by CDSCO, further demonstrates the feasibility of centralized digital platforms for regulatory compliance .
4. The Consultation Deficit
KPRDO has expressed concern that recent compliance requirements are being introduced “without adequate consultation with stakeholders”. This raises questions about procedural fairness and the principles of natural justice.
Traders are already managing multiple regulatory obligations from various departments, including GST, Income Tax, Labour authorities, and local bodies. The cumulative burden, according to KPRDO, “consumes substantial time and resources, particularly for small and medium-scale wholesalers operating on minimal margins”.
The National Context: Stricter Penalties on the Horizon
The KPRDO representation comes at a time when India’s apex drug regulator is working on stringent rules to hold retailers and wholesalers accountable for selling or storing spurious drugs, even if they hold valid purchase invoices .
Currently, under Section 19 of the Drugs and Cosmetics Act, 1940, only manufacturers are prosecuted, while others remain exempt. A committee has been formed by CDSCO to explore ways to narrow down these exemptions and extend punishment to retailers and wholesalers .
The market for spurious drugs in India is estimated to be worth $3 billion, compared to $50 billion for the total pharma market as of FY24 . In December 2024, authorities seized spurious anti-cancer and anti-diabetic drugs worth ₹6.60 crore in Kolkata .
GMP Compliance and COA: Lessons from International Practice
Global regulatory trends indicate increasing scrutiny of supply chain integrity. In the European Union, proposed guidelines require active pharmaceutical ingredient (API) distributors to establish quality management systems and maintain accurate records of suppliers. Distributors would be required to transmit all regulatory and quality documents provided by the API manufacturer to customers, including copies of original Certificates of Analysis and batch numbers .
In the United States, FDA inspections have revealed that some companies are overly reliant on suppliers’ Certificates of Analysis without confirming the appropriateness of testing. This practice has led to significant Form 483 observations, highlighting gaps in quality control and regulatory compliance .
One inspection cited a distributor under 21 CFR 211.165(a) for failing to justify the appropriateness of its supplier’s testing of finished products before release, relying entirely on a COA provided by its Contract Manufacturing Organization . The takeaway, as noted by GMP Trends, is that “distributors must justify the appropriateness of laboratory testing to ensure conformance to final specifications for the drug product” .
The Proposed Solution: A Centralized Digital Framework
KPRDO’s proposal for a centralized digital portal merits serious consideration. Such a framework would:
- Ensure Uniform Implementation: By operating at the pan-India level, it would eliminate interstate disparities and ensure all trading entities face the same compliance requirements.
- Reduce Compliance Burden: Manufacturers would upload batch-wise COA details directly, eliminating the need for wholesalers to collect, verify, and maintain physical documents.
- Enhance Transparency: Regulatory authorities could access real-time data for enforcement purposes.
- Support Environmental Sustainability: Moving away from voluminous physical document storage aligns with government initiatives promoting paperless operations .
The existing SUGAM portal and the proposed ONDLS provide ready infrastructure for such an initiative. As noted by C-DAC, these projects aim to “simplify regulatory processes but also promote transparency and efficiency within the pharmaceutical industry” .
Conclusion: Balancing Regulation and Practicality
KPRDO’s representation highlights the tension between regulatory objectives and practical implementation. While the goal of ensuring drug quality is unassailable, the means adopted must be workable and proportionate.
The organization has requested that the compliance of COA be revoked, and the matter be referred to the Central Government for creating a pan-India digital framework. Given the existing digital infrastructure and recent initiatives by CDSCO, this approach appears both feasible and desirable.
As the Drugs and Cosmetics Act evolves to address the challenge of spurious drugs, it is crucial that enforcement mechanisms distinguish between willful negligence and genuine lapses . The responsibility for validating purchase records and ensuring compliance must rest with drug enforcement teams through detailed investigations before holding businesses accountable .
KPRDO’s concluding observation is noteworthy: “We trust that the Government recognizes its responsibility not only toward public health but also toward sustaining the legitimate trade community that forms an essential link in the pharmaceutical supply chain”. This balance between public health imperatives and trade viability must guide any regulatory intervention.
Editorial & Compliance Note:
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