This article has been published by Mondaq at The Patanjali Journey: Supreme Court’s Expanding Scrutiny On Advertising Compliance For Cosmetics – Healthcare – India

Regulatory shake-up in healthcare advertising

India’s healthcare and food sectors have recently undergone significant compliance changes, particularly in advertising. In 2024, the Supreme Court of India implemented a mandatory self‑declaration regime requiring advertisers, agencies, and endorsers to upload a certificate affirming that their advertisement is not misleading before it goes live. Initially, the rule applied to all advertisements across television, radio, print, and online media. The Court stated that the measure was designed to protect consumers’ fundamental right to health, including their right to be informed about product quality.

The Patanjali case and new disclosure rules

The introduction of the self‑declaration requirement stems from the widely publicized Patanjali case (Indian Medical Association v. Union of India^[1]).  The Indian Medical Association (IMA) challenged Patanjali Ayurved Limited’s claims that its products could cure diseases such as COVID‑19.  In its order dated April 23, 2024, the Supreme Court expressed concern that numerous fast‑moving consumer goods (FMCG) and pharmaceutical companies were making similarly misleading health‑related claims. Emphasizing the consumer’s right to be informed, particularly for vulnerable groups such as pregnant women, children, the elderly, and the sick, the Court, in its May 7, 2024 order, mandated a self‑declaration regime for all advertisements, invoking Article 32 of the Constitution.  The Court underscored that the fundamental right to health includes the right of consumers to be informed about the quality of products offered by manufacturers, service providers, advertisers, and advertising agencies.  To operationalize this mandate, the Court directed the Ministry of Information and Broadcasting (MIB) to establish a portal for advertisers to upload self‑declaration certificates prior to airing any advertisement.

Initially, the Supreme Court’s directive applied to all new advertisements. However, on June 3, 2024, the MIB issued a circular to implement the Court’s order, setting a compliance deadline of June 18, 2024. Subsequently, on July 3, 2024, the MIB released an advisory clarifying that the annual self-declaration requirement would apply specifically to advertisers in the food and health sectors. However, this clarification left a key issue unresolved: whether the “health” sector encompasses cosmetics. To date, neither the Supreme Court nor the MIB has provided a definitive interpretation of whether “healthcare” includes or excludes cosmetic products.

Are cosmetics treated as “healthcare”?

This uncertainty is relevant as cosmetics sit at the boundary between lifestyle products and health products. The Drugs and Cosmetics Act, 1940 (D&C Act) governs cosmetics in India. Under Section 3(aaa) of the D&C Act, a cosmetic is defined as “any article intended to be rubbed, poured, sprinkled or sprayed on… the human body… for cleansing, beautifying, promoting attractiveness, or altering appearance”. By this definition, cosmetics directly contact the body and can affect health. For example, dangerous ingredients, contamination, or improper manufacturing in a cosmetic can cause skin irritation, allergies or other health hazards.

In practice, some products straddle both worlds. Sunscreens, anti-dandruff shampoos, certain deodorants, and even toothpastes often contain active ingredients that make it difficult to clearly categorize them as either cosmetic or medicinal. The rapidly growing skincare market further complicates matters by using terms such as “anti-ageing” and “rejuvenating,” which can mislead consumers into believing these products offer therapeutic or drug-like benefits. As a result, regulators and courts frequently require more rigorous evidence to support claims made by cosmetic products that suggest medical or health benefits. In essence, when a cosmetic product’s claims extend to disease prevention or treatment, it may be subject to the same substantiation standards as drugs or healthcare products.

Court rulings blur the cosmetic-drug divide

Indian courts have consistently held that the actual function and ingredients of a product take precedence over its labeling when determining regulatory classification. For example, in State of Gujarat v. Sintex (Gujarat High Court, 2013)^[2], the court found that a product containing medicinal herbs could not be classified solely as a cosmetic if it was marketed for health-related purposes. Similarly, in a 2024 decision^[3] by the Telangana High Court concerning Emami’s prickly heat powder, the presence of salicylic acid – a compound used to treat acne, among others – was deemed to impart a medicinal character to the product. In the same case, the court determined that Emami’s Boroplus cream, an Ayurvedic formulation, was not merely a cosmetic or toiletry item, but rather a curative Ayurvedic remedy.

These rulings underscore a key principle: if a product is intended to diagnose, treat, mitigate, or prevent a medical condition, it should be regulated as a drug, regardless of its impact on appearance. The courts have noted that many cosmetics “affect more than just appearance” and can have significant implications for a user’s health.

Industry watchdogs impose stricter standards

India’s advertising self‑regulator, the Advertising Standards Council of India (ASCI), has begun treating certain cosmetic claims with the same scrutiny as healthcare claims.  For instance, in 2023, ASCI addressed a complaint^[4] involving a CeraVe moisturizer endorsed by a doctor on Instagram.  Applying its “Health and Financial Influencers” guidelines – typically reserved for medical and nutrition products – ASCI required endorsers to possess relevant qualifications.  ASCI clarified that when a skincare product’s claims have implications for health or safety, the same standards of care and substantiation apply as for pharmaceutical products.

In another recent case^[5], ASCI flagged a skincare advertiser for making inconsistent claims across different advertisements.  The Council stressed that all product claims must be supported by robust research, making the standards akin to healthcare products. More broadly, ASCI has indicated that if a cosmetic claim suggests disease prevention or health benefits, advertisers must provide a higher level of substantiation for such claims. These developments align with the Supreme Court’s position that consumer protection demands transparency and scientifically validated claims.

Enforcement gaps and regulatory updates

The Supreme Court also used the Patanjali case to highlight significant enforcement inadequacies in the regulation of misleading advertisements. The Court observed that following the lapse of a Memorandum of Understanding (MoU) between the ASCI and the Ministry of Consumer Affairs, proactive monitoring of deceptive ads had declined sharply. This was reflected in the dramatic drop in complaints submitted to the GAMA (Grievances Against Misleading Ads) portal – from over 2,500 between 2018 and 2022 to just 132 between April 2022 and May 2024. The Court criticized this decline in enforcement and directed several ministries, including Consumer Affairs, Health, Electronics & IT, and AYUSH, to explain these gaps and enhance inter-ministerial coordination.

During the proceedings, the Supreme Court also addressed Rule 170 of the Drugs and Cosmetics Rules, 1945, which had prohibited manufacturers (including their agents) of Ayurvedic, Siddha, and Unani drugs from making curative claims in their advertisements. In July 2024, the Ministry of AYUSH issued a notification formally omitting Rule 170. The Supreme Court subsequently lifted its earlier stay on this notification, in effect, omitting Rule 170. However, the Court cautioned manufacturers against interpreting this as a relaxation of all regulatory standards. It criticized the Ministry of AYUSH for attempting to discontinue enforcement of Rule 170 through administrative action rather than proper legislative procedure. Crucially, the Court affirmed that the removal of Rule 170 does not exempt manufacturers from compliance with broader consumer protection laws, and it left the door open for affected parties to challenge non-compliant advertisements or products under these laws.

Looking ahead: a cautious path for marketers

The Supreme Court and regulators are moving toward holding cosmetics advertising to rigorous standards comparable to those for healthcare products. While the precise definition of “healthcare” remains unsettled for purposes of the MIB’s implementation, the message is clear: advertisers must ensure claims are truthful and substantiated, and consumers are entitled to clear, evidence‑based information. Cosmetics manufacturers should prepare for heightened scrutiny and more demanding compliance expectations. The most prudent strategy is to treat any claim with potential health implications as if it were subject to healthcare regulations – providing comprehensive disclosure and robust documentation. This minimizes legal and regulatory risks and advances the Supreme Court’s broader objectives of consumer protection and transparency in the marketplace.

Endnotes:

[1] WP (C) NO. 645/2022.

[2] State of Gujarat v Sintex, O/TAXAP/250/2013.

[3] State of Andhra Pradesh v M/S Himani Limited, Tax Revision Case Nos. 155, 156, 166, 169, 182, 183, 187, 188, 192, 193 and 211 of 2004.

[4] https://www.ascionline.in/complaint-outcomes-details/?case_id=2023-8-24-6-C.16792.

[5] https://www.ascionline.in/complaint-outcomes-details/?case_id=2022-5-25-2-C.154.