EASE OF DOING BUSINESS DURING COVID-19: REGULATORY REQUIREMENTS FOR MANUFACTURING OF SANITIZERS AND ALCOHOL-BASED HAND RUBS
India, like most of the developing world, was not a large market for hand sanitizers before the global pandemic brought on by the novel coronavirus. As an effective and strongly advised preventive measure against the persistent virus, hand sanitizers have now come highly in demand. An alcohol-based formula is not particularly difficult to manufacture, and the government is also trying to encourage more manufacturing in an attempt to cater to the demand. This article provides an overview of the guidelines and precautions to be observed while stepping into the business of manufacturing alcohol-based hand rubs.
1. What is the formula for alcohol based hand rubs?
When it comes to hand sanitizers, products with 60% to 95% alcohol by volume are effective antiseptics. Lower or higher concentrations are less effective; most products contain between 60% and 80% alcohol. During the COVID pandemic however, certain specific compositions have been suggested.
The two most commonly accepted formula prescribed for local production by the WHO are:
i) final concentrations of isopropyl alcohol 75% v/v, glycerol 1.45% v/v, hydrogen peroxide 0.125% v/v, and
ii) final concentrations of ethanol 80% v/v, glycerol 1.45% v/v, hydrogen peroxide (H2O2) 0.125% v/v.
Therefore, one can follow any approved formulae with greater than 60% ethanol or 70% isopropanol as per research, but it is advisable to follow the concentrations provided by either WHO, or other trusted sources.
2. What are the guidelines for production and manufacture of hand sanitizers and alcohol-based hand rubs in India?
Pre-existing rules and additional guidelines issued in lieu of the ongoing coronavirus crisis are what govern the regulatory framework of manufacturing alcohol-based hand sanitizers.
ESSENTIAL COMMODITY WITH PRICE CONTROL
The Union Government has notified The Essential Commodities Order, 2020 [Ministry of Consumer Affairs, Notification dated March 13, 2020, S.O. 1087(E)], thereby classifying “hand sanitizers” as essential commodity until June 30th, 2020. As a consequence, all hand sanitizers and the raw material used in them have come under the purview of price control. The Central Government has also notified The Fixation of Prices of Masks (2 ply and 3 ply), Melt Brown Non-Woven Fabric and Hand Sanitizers Order, 2020 [Ministry of Consumer Affairs, Notification dated March 21, 2020]. As per this Order, all hand sanitizers cannot be sold for price higher than 100 Rupees for 200 ml until June 30, 2020.
LICENSING AND PREMISES
Retailers of alcohol-based hand rubs are required to possess a stock and sale license under the Drugs and Cosmetics Act, 1940 obtained from the Licensing Authority as per the provisions of the Drugs and Cosmetic Rules, 1945. The Rules provide the Form and the details needed to be provided. The application for the license must also include a plan of the premises where the operation will run.
LABELLING AND PACKAGING
Products with more than one active ingredients fall in the category of ‘fixed dose combinations’ (“FDCs”). Every FDC is required by law to state the composition on the label first, followed by its brand name. Additionally, due to the high alcohol content in the ABHRs, there are specific declarations that ought to appear on their label. Each label must specify that ABHR contains denatured alcohol (in case of use of methylated spirit) and that it is for external use only. If the ABHR is making a disinfectant claim, then it must specify the mode of use. The content of the alcohol in the ABHR must be stated in terms of average percentage of absolute alcohol. Storage conditions and appropriate warnings should also be given.
3. What are the standards to be followed if you plan to manufacture and export these products?
Different countries will have different requirements, but using a formula recommended by a reputable international organisation along with the following precautions should be sufficient to qualify the requirements of most countries:
• The hand sanitizer is generally manufactured using: (1) alcohol that is not less than 94.9% ethanol by volume or isopropyl alcohol; (2) food grade glycerin; (3) hydrogen peroxide; and (4) sterile water.
• The hand sanitizer is manufactured according to the formula provided in the guidance.
• Records are kept to ensure the correct amount of the active ingredient (alcohol) is used, and that each batch of hand sanitizer matches the provided formula.
• Sanitary conditions and appropriate equipment are used during manufacturing.
• The alcohol content in samples of the finished product is verified before each batch is distributed.
• The hand sanitizer is labeled appropriately.
If you wish to export to any specific country, you must meet the requirements laid down by their domestic authorities for the product to qualify for sale in that country. The laws will vary from country to country. However, high standards, proper records and labelling should be able to make the product of acceptable quality in most jurisdictions.
4. What kind of businesses are commonly shifting to the production of these products?
While after procuring the adequate licensing and permitted space, mostly anyone can start the business of manufacturing alcohol-based hand rubs, there are certain businesses which will enjoy more of an advantage.
Drug and Cosmetic Manufacturers: For a Delhi-based drug or cosmetic company, it becomes particularly more beneficial to step into the business of manufacturing these products. Taking into consideration shortage of hand sanitizers post the coronavirus outbreak, the Delhi Government has granted permission to all manufacturers of drugs and cosmetics in Delhi to produce such items based on ethanol up to June 30, 2020. No additional license will be needed by these companies for the same. [Delhi Govt., Circular dated March 25, 2020, F. No. 13(15)/Misc./HQ/2017/1825]. Even for non-Delhi based endeavors, with the concessions currently in place, it is an ideal time to expand production towards this essential commodity during this period. An example of a reputed brand having made this expansion is NIVEA. German-based NIVEA skincare brand has started manufacturing alcohol based hand sanitisers as the country witnesses unprecedented demand.
Alcohol Manufacturers: In a relief effort and to contribute in these times, liquor manufacturer Bacardi has said it will produce 70,000 liters of hand sanitizers, which will be distributed primarily to district government hospitals, to help mitigate the spread of the novel coronavirus. For persons in the liquor business, it is easily possible to switch to this business because the core ingredient in sanitizers is part of their regular business.
Mills with Distiller Units: Mills with distiller units can supply ethyl alcohol/ENA(extra neutral alcohol)/ethanol to sanitiser manufacturers and more importantly, they can engage in manufacturing of hand sanitizers. In Maharashtra, a large number of sugar mills have applied for licenses for manufacturing sanitizers on account of the shortage. Further, even the Ministry of Consumer Affairs had directed state governments to grant licences to distilleries and sugar companies to manufacture hand sanitisers to prevent shortage.
Deodorant Makers: Recently, the Ministry of Consumer Affairs had also directed deodorant makers to either manufacture or bottle hand sanitisers made by sugar companies and distilleries, which lack capabilities to pack in small units consumed in the market.
These types of companies are only some of the types of businesses being encouraged to address the rising demand for sanitizers. Essentially however, anyone can enter the business of production and manufacturing of alcohol based hand rubs once they get the requisite license and approved space.
5. Why is it important to follow the rules and regulatory framework while manufacturing?
The standards that have been set by the government are important to follow, and failure to correctly produce, adequately label or bottle the product can lead to sever consequences. Some examples that illustrate the dangers of not taking every precaution or fraudulently entering into this business are as follows:
• The Food and Drugs Administration (FDA), Haryana, unearthed a manufacturing unit making spirit-based hands sanitisers at Manesar in Gurugram district that did not have any licence required under the Drugs and Cosmetics Act, 1940. The authorities found that the hand sanitiser was being filled in the unit under unhygienic conditions by labourers. The unit did not have any manufacturing chemist or analytical chemists for manufacturing or testing the goods or the raw material. There was also incorrect labelling as while the company was using isopropyl alcohol for manufacturing the sanitisers, the label showed it was using Alcohol IP, which is ethyl alcohol.
• In Bangaluru, the Economic Offences Wing and Crime Branch ceased fake hand sanitizer worth Rs. 56 lakhs at a manufacturing unit, and two accused person involved were also taken into custody.
• Four persons were arrested after a fake hand sanitiser and face mask manufacturing company was busted in Noida a day after the Central Government declared the two items as ‘essential commodities’.
Negligence or manufacturing of sub-standard hand sanitizers is not only a socio-economic offense but a vile move deterring the nation from its fight against COVID-19. The consequences for breach of the regulatory framework are severe, and persons interested in manufacturing must enter this business in good faith.
By Shiv Mangal Sharma
Advocate Supreme Court