Dehradun-based Daffohils Laboratories remains operational despite a July 2026 recommendation from federal drug regulators to halt production. The directive, stemming from alleged quality control and data integrity violations, has faced enforcement delays amid a lack of coordination between state and central authorities.
Daffohils Laboratories Private Limited, a pharmaceutical manufacturer based in Dehradun, continues to produce medicines despite a formal recommendation from the Central Drugs Standard Control Organisation (CDSCO) to cease operations. The federal regulator issued this directive in July 2026, following an inspection that flagged serious quality control and compliance issues at the company’s Selaqui industrial area facility.
The regulatory scrutiny began after a whistleblower report in March 2026 prompted an investigation into the facility’s operations. Investigators reportedly identified significant breaches of Good Manufacturing Practices, including inadequate environmental monitoring and poor maintenance of pharmaceutical water systems. Most concerning, however, were allegations regarding data integrity. Reports indicate that the facility allegedly operated without a functional microbiology laboratory for a period, despite company records showing microbiological test results. Furthermore, it is alleged that finished products were dispatched to markets before quality control tests were completed, with Certificates of Analysis purportedly backdated to meet customer requirements.
Despite the inspection team’s clear recommendation for the suspension or cancellation of the company’s manufacturing license, the facility has continued to function. This has led to a regulatory stalemate. The CDSCO maintains that the primary enforcement power, specifically regarding license suspension under the Drugs and Cosmetics Act of 1940, rests with the Uttarakhand State Licensing Authority. However, state authorities have yet to confirm whether a show-cause notice was issued or if any enforcement action has been taken, leaving the status of the shutdown recommendation unclear.
Managing Director IPS Chawla has publicly defended the company’s actions, stating that all clarifications regarding the inspection findings have been submitted to the relevant regulatory bodies. The management has characterized the findings as technical matters involving internal company records rather than systemic quality failures, and has dismissed the need for further public disclosure on the matter.
While Daffohils Laboratories is an unlisted private company and does not directly impact public stock markets, the case highlights risks relevant to stakeholders in the pharmaceutical supply chain. The incident underscores the complexities of regulatory oversight in third-party manufacturing, where compliance depends heavily on the effectiveness of state and central drug control coordination. For business partners, retailers, and other entities relying on the manufacturer, the uncertainty surrounding the facility's compliance status remains a critical monitorable. The lack of clear enforcement continues to be a point of concern regarding the consistency of quality control standards within the sector.