Business Law

Regulation of E-Pharmacy in India

By Suryansh Beohar

Introduction

E-pharmacy! It essentially means an ‘online pharmacy’ through which doctors can interact with their clients and prescribe them the medicines required virtually, which can later get delivered to them through the mail, courier, etc. This facilitates both the doctor and the client to attend meetings while sitting at their homes, which was a necessity during the times of the COVID-19 outbreak, to prevent further infection of the virus by eliminating public contact. Although we cannot say that e-pharmacy is booming in India, the sector has definitely seen growth over the past few years due to various factors. The rise of e-commerce in India in the past decade with people starting to buy everything from clothes to gadgets online through online distributors such as Amazon, Flipkart, Myntra, Snapdeal, etc. and the COVID-19 pandemic forcing people to buy all their necessities from food to medicines online, can be assumed to be the major ones. Initially, e-pharmacies started to come up around 2015 and since then they have been growing at a decent rate. In the year 2020, the whole e-pharmacy sector managed to gather around 700 million dollars through external investors. Huge conglomerates such as Reliance and Tata also have bought shares of Netmeds and 1mg respectively. This shows us that investors are slowly starting to see e-pharmacy as a growing and profitable sector. Some of the major shareholders in the sector are Pharmeasy, Medlife, 1mg, and Netmeds. Since the importance of this sector grew a lot in the pandemic, the govt. also quickly announced e-pharmacies as an essential service. Various initiatives were taken by the govt. to promote the sector, such as promoting it on its prominent apps and portals such as Aarogyta Setu Mitr portal and the Arogya Setu app. These initiatives definitely helped, as the sector was able to achieve a 2.5X growth. The sales increased by 30 to 40 percent when compared to the sales of pre-pandemic times.

Prashant Tandon, the CEO of 1mg emphasized the importance of the e-pharmacies in times of the pandemic by stating: “People are apprehensive about exposure while venturing outside for medicines and lab results and prefer online options and the need at present is unbounded. The company is actively investing to cater to demand”.

Advantages of E-Pharmacies

There are various advantages that e-pharmacies hold over the traditional medicine retailers which make the customer choose e-pharmacies over these retailers. Some of them are- 

  1. E-pharmacies ensure safer drugs- A large part of the medicines which are sold to the customers in countries like India, are altered or adulterated to some extent. The E-pharmacy sector counters this by establishing a direct link or connection between the licensed manufacturer and the final customer. This establishes trust among the people.
  2. Improves access- Since the sector works on an online platform, it is available to a large sector of the Indian population, through which people can order their medicines from almost any part of the country, this proves to be very effective in solving the medicinal needs of the people. 
  3. Drugs are affordable- Since e-pharmacies use an efficient and effective ‘supply chain’ the final price that is offered to the consumer is comparatively lower than the retailers. There are also frequent discounts available on these platforms.
  4. Better availability of the drugs- An ‘average’ physical medicine retailer is only able to stock around 5-1000 units of medicines in the store. Whereas e-pharmacies link the consumer to the manufacturer, the consumer has access to 50000 or more stocks at a time. This results in preventing the problem of running out of any medicine at a given time.

Regulation of E-Pharmacies

Currently, the main laws regulating e-pharmacies are the Drugs and Cosmetics Act, 1940 The Drugs and Cosmetic Rules, 1945. These laws were introduced to prevent any fraud or adulteration regarding the sales of medicines and to ensure proper, safe licensed selling and distribution of the medicinal products. These rules have been amended multiple times since their passing, to adjust according to the evolving times. The latest amendments were carried out by the Ministry of Health and Family Welfare in the year 2018. The new rules incorporated a new chapter titled ‘sale of drugs by E-Pharmacy’. 

According to Rule 67-I (a), ‘the term ‘e-pharmacy’ has been for the first time introduced to define it as the business of distribution or sale, stock, exhibit or offer for sale of drugs through a web portal or any other electronic model.’

According to Rule 67-I (b), ‘the term ‘e-pharmacy portal’ has been defined as a web or electronic portal or any other electronic mode established and maintained by the e-pharmacy registration holder to conduct the business of e-pharmacy.’

According to Rule 67-I (e), ‘sale by way of e-pharmacy’ has been defined as a sale whether to a hospital, or dispensary, or a medical, educational, or research institute or to any other person through e-pharmacy by way of retail sale.’

According to the latest amendment of 2018, it is mandatory for e-pharmacy to be established in India.

The provision of customer support has also been added in the latest amendments, where the e-pharmacy must provide customer support and grievance resolution to the stakeholders of the company, for a minimum of 12 hours a day. The inquiries of the customers shall also be addressed by a registered pharmacist through a helpline.

There have also been some restrictions placed on the e-pharmacies, such as advertisement of any kinds of drugs for any purpose through any means such as television, internet, billboards, radio, etc. is not allowed. The sale of ‘narcotic and psychotropic drugs as defined under the Narcotic Drugs and Psychotropic Substances Act, 1985, tranquilizers and the drugs specified in the Schedule X of the Rules’ has also been prohibited.

Complaint Redressal Mechanism

If the customer finds or suspects the drugs provided by the e-pharmacy to be illegitimate, adulterated, expired, etc. then the customer has the right to file a complaint to the state drugs controller, who holds the power to take rightful action against such pharmacy. The customer enjoys another set of rights, mentioned in the ‘Consumer Protection Act, 1986.’

Registration Application

Moreover, more provisions and rules were added to prevent the rise of illegal e-pharmacies and their sales of drugs without any license, by mandating each and every e-pharmacy to register themselves with ‘Central Licensing Authority (“CLA”)’.  This registration will be completed upon the filing of an online form and the payment of 50,000 rupees. This registration would remain valid for three years. It also must be renewed within six months of the completion of the three years, failure to do so would result in the expiry of the registration. 

It has been made mandatory for any new emerging e-pharmacy to register with the Central Drugs Standard Control Organization (CDSCO), which is India’s primary drug regulating and licensing body.

To hold the pharmacies and the consumers accountable, the rules mandate the e-pharmacies to maintain a receipt of every transaction or order that takes place with their business, it also directs them to verify the prescriptions provided to the pharmacies by the customers. A prescription in the rules is defined as ‘an instruction from a registered medical practitioner’. Such a prescription can either be in a handwritten or virtual format.

Monitoring: The Central Licensing Authority and the State Licensing Authority and can conduct inspections and audits of these e-pharmacies at any given point of time to verify whether these e-pharmacies are adhering to the laws. This can be done through a careful analysis of the records and data maintained by the relevant authorities of the e-pharmacies. 

The e-pharmacies are also liable to get their license canceled or suspended by the CLA if they are found to be breaching the rules of the amendment. The e-pharmacies have the right to appeal against such a decision, although the appeal must be made within 45 days of the decision of the CLA. 

Gaps in the Rules

The rules did not properly address some points with respect to the verification of the prescriptions, their embezzlement, and their validity. The rules mention that the govt can have access to the information of the customers of the e-pharmacies, there are no specific scenarios mentioned for the same. The rules also fail to clarify what authorities from the Central Licensing Authority and the State Licensing Authority will have access to the said information. The rules also do not mandate the e-pharmacies to show their privacy policy to the people checking their websites. These rules also go against the ‘Personal Data Protection Bill, 2019’ which states that the information of a client can be shared outside of India with the prior consent of the said client. The rules mandate that such information cannot be shared outside of India under any circumstances.

Conclusion

Everyone would agree that e-pharmacies have proven to be very helpful in recent times and surely are on their way to their increased demand in the future. This high demand makes it necessary for the govt. to regulate these e-pharmacies so that no fraud takes place and the distribution and sales of the product are done in a safe and licensed manner. On-call pharmacists should be made accessible at all times to confirm the authenticity of prescriptions and guide e-pharmacy clients during medicine purchases, as a matter of public interest. This requirement for acquiring an e-pharmacy license will assist to alleviate some of the worries about internet pharmacies. Furthermore, if India is successful in implementing a professionally rigorous system like the NABP/VPPS, which can efficiently monitor over 250 recently created e-pharmacies, overall health care expenditures can be reduced significantly. A plethora of online material presents e-pharmacies as a digital threat, contributing to the industry’s long-standing bad image. Although the relevant laws do work to a good extent, there are still a few loopholes that must be taken care of to ensure valid retail of the products, so that the e-pharmacy sector can grow to its maximum potential and compete with the same sectors of countries like USA and UK.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s