Laws for Online Pharmacy Business in India

Last Updated at: Jan 05, 2021
Online Pharmacy Business

E-pharmacies or Pharmacy Business are online markets for consumers seeking to buy medicines without stepping out of the comfort of their homes. They function in the same way as any other online marketplace and deliver medicines to one’s doorstep. Since their inception, e-pharmacies have developed in terms of prices, efficiency, ease of access and supply and are considered an excellent innovative concept. India contributes around 20% to global pharmaceutical exports which are expected to reach USD 22 billion by the end of 2020, out of which, the e-pharmacy market is set to witness a growth of INR 25, 000 crores by 2022.

Online pharmaceutical markets in India have come into the limelight since the advent of Covid-19. The pandemic caused a catalysed growth for the e-commerce markets, and online pharmacies benefitted from the same. This is mainly because e-pharmacies offers overcame challenges that face by their physical counterparts. However, for large-scale development of this sector, huge investments and/or consolidation of a market that is majorly fragment is requires. 

Regulatory Framework

Drug regulation in India presently exists under the Drugs and Cosmetics Act, 1940. Drugs and Cosmetics Rules, 1945, Pharmacy Act, 1948, Indian Medical Act, 1956, Code of Ethics Regulations, 2002, Narcotic Drug and Psychotropic Substances Act, 1985, and Drugs and Magic Remedies (Objectionable Advertisement) Act, 1954. 

The Drugs and Cosmetics Act does not allow home delivery of drugs. Further,  The Drugs and Cosmetics Act, 1940, and the Drugs and Cosmetics Rules, 1945, have clear guidelines on the sale of “restrictive drugs” (Schedule H and Schedule X drugs) which can be sold only on the prescription of a registered medication practitioner. However, they do not differentiate between medicines sold online or offline, and hence there is no solid regulation/policy available to regulate pharmacy operations in India.

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The Central Drugs Standard Control Organization (CDSCO)

On 30 December 2015, The CDSCO notified that selling of drugs through the internet is not permitted as it violates the provisions of the Drugs & Cosmetics Act, 1940 and the Rules, 1945.  Subsequently, realizing the need for proper regulations with respect to the sale of packaging, sale, safety standards. Further, prescription of medicines/drugs online, various stakeholders approached the government.

The Drugs Consultative Committee (DCC) – a statutory body constituted under the CDSCO to maintain the uniformity of the D&A Act throughout the country – then created an expert sub-committee of seven members under the chairmanship of Maharashtra’s ex-Food and Drug Commissioner Dr. Harshdeep Kamble in 2015, to assess the possibility of the online pharmacy sector in India. The committee, along with the Ministry of Health and Family Welfare came out with a draft to amend the Drugs and Cosmetics Rules. In 1945 in an attempt to filter out and provide consumers with genuine suppliers and reliable drugs for their use.

Firstly, under the draft rules, the term ‘e-pharmacy’ introduces as the business of distribution or sale, stock, exhibit, or offer for sale of drugs through a web portal or any other electronic mode. Further, the terms ‘e-pharmacy portal’ and ‘sale by way of e-pharmacy’ has been suitably defined. Also, provisions for application for registration and its validity; conditions for registration on the e-pharmacy like location, disclosure of information, the procedure for distribution and sale, etc. No person will be eligible to sell, distribute, or offer to sell drugs through an e-pharmacy unless registered with the appropriate authority. The applicant will require to apply for registration with the Central Licensing Authority.

Rule 67K – Disclosure of information generated through e-pharmacy portal

(1) the information by an e-pharmacy registration holder from the customer by way of a prescription. Or in any other manner shall not disclose by the e-pharmacy registration holder for any other purposes not shall the same disclose to any other person.

(2) the e-pharmacy registration holder shall be duty-bound to provide such information to the Central Government or State Government. As the case may be, as and when required for public health purposes.

(3) the e-pharmacy portal shall establish in India through which they are conducting the business of e-pharmacy. They shall keep the data that generates as localize. This provides that in no case the data generated through the e-pharmacy portal shall store.

Certain restrictions impose the e-pharmacy which include the prohibition of advertisement. Further, any drugs on radio, television, internet, print, or any other media for any purpose. Additionally, restriction on dealing in narcotic and psychotropic drugs defines under the Narcotic Drugs. Psychotropic Substances Act, 1985, tranquillizers and the drugs specified in the Schedule X of the Rules. Additionally, monitoring of e-pharmacy, complaint redressal mechanism introduces which the rights to file a complaint. This is to the state drugs controller for any suspicion of supply of non-standard quality; misbranded drugs through the e-pharmacy besides the Consumer Protection Act, 1986. 

However, this initiative that opposes by several organizations representing chemists and druggists, who were against the concept of e-pharmacies. They believe that easier access to drugs through the internet will lead to several problems, such as overuse of restricted drugs, self-medication without appropriate prescription, no face-to-face discussion with professional pharmacists, brand name confusion, ambiguity as to the origin of the brand, illegal exports of drugs, exploitation of customer’ personal information etc.

The stance of Delhi and Madras High Courts

Post the circulation of the draft rules, multiple petitions file at the Delhi and Madras High Courts. Further, seeking a ban on all e-pharmacy operations, keeping public safety in mind.

Public interest litigation (PIL) filed by Delhi-based dermatologist Dr Zaheer Ahmed who submitted that in absence of monitoring; online sale of medicines would be a risk to patients and doctors. The Delhi High Court, as a response to this petition issued an order prohibiting the online sale of drugs without a valid license, in the case of Zaheer Ahmed v. Union of India. This order enforces through a notification on the Drugs Controller General of India (DCGI) dated November 28, 2019.

The Madras High Court also issued a decision temporarily banning the online sale of drugs. Further, asked the government to publish the regulations. This is given on a petition filed by the Tamil Nadu Chemists and Druggists Association by July 31, 2019.