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This article is written by Harshita Gadiya, pursuing an Introductory Course: Legal Writing For Blogging, Paid Internships, Knowledge Management, Research And Editing Jobs from LawSikho.com.


While the financial system is witnessing a quick transition from “offline” to “online” markets and there may be a robust buzz of “demonetization” and “one click” entry to everything, legal guidelines referring to the law of maximum of those e-trade agencies are in a totally developing stage. The increase in utilization of recent generation and digitalization to disrupt the market of conventional establishments and intermediaries withinside the transport of offerings has substantially touched upon all industries which include the pharmaceutical region. 

An e-pharmacy store resembles your Myntra, Amazon, Flipkart for the medicines, which implies that it is a one stop online entrance where an individual can look for clinical exhortation through online counsel, request professionally prescribed medications after properly sharing a duplicate of the solution, access to OTC(Over The Counter) well-being items, and sometimes even request significant well being check-up tests and get these administrations at their doorstep.

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On Sept 27, 2018 AIOCD (All India Organization of Chemists and Druggists), an affiliation of brick and mortar retail chemists referred to as on all its eight lacs individuals throughout India to look at a 1-day long national strike. This strike brought up the eye of the government, to the problem and draft rule at the running of e-pharmacies.

Different business models

Inventory based model

This model implies an action where the stock of merchandise and ventures is possessed by the eCommerce organization and the items are offered to the client legitimately. Likewise, in e-Pharmacies, the e-Pharmacy possesses the stock of medications/drugs that are put away in stockrooms/warehouse focuses across geographic areas.

Marketplace model

Marketplace-primarily based totally version of eCommerce way that the era groups act as a facilitator among a purchaser and a seller. In this version, e-Pharmacy performs the function of an aggregator. 

Generic models

Generic eCommerce market is a technology-pushed digital platform in which a huge range of merchandise like electronics, fashion, furniture, domestic furnishings, and cosmetics are sold. This mode prohibits the commercial and sale of pharmaceuticals or any drugs, which might be in violation of the Drugs & Cosmetics Act. Examples of this market are Flipkart and Amazon.

Laws governing E-pharmacy

  • Drugs & Cosmetics Act, 1940
  • Drug & Cosmetics Rules, 1945
  • Pharmacy Act, 1948
  • Indian Medical Act, 1956
  • Code of Ethics Regulations, 2002
  • Information Technology Act, 2000

Note: After understanding these laws the first thing while setting up the portal should be deciding a unique name and registering the domain name of the portal.

Regulations as per the draft

  • Registration of E-pharmacies: Any individual who intends to start the enterprise of e-Pharmacies will have to mandatorily observe for registration to the Central Licensing Authority (“CLA”) through filling up Form 18AA  with paying a rate of INR 50,000 and furnishing the needful files via the net portal of the Central Government. Registration is obligatory for the functions of selling, distributing, stocking, exhibiting, or providing on the market of medication via the e-Pharmacy portal through any individual. Registration would stay legitimate for 3 years from the date of issue.
  • E-pharmacy portals: Orders should be made only through the portal of E-pharmacy.
  • Protection of privacy: any information related to the customer including prescription should be kept confidential and adhere to applicable Information Technology in India.
  • Sale through cash/credit memo: All supply of medicines should be done through credit/cash memo only and all records should be maintained.
  • Measures to tackle counterfeit drugs, unauthorised sale and expired products: Memo should include all the details as mentioned below: 
  1. Name, address, license number of the licensee who is dispensing drugs.
  2. Serial number and the date of the memo.
  3. Drug details including its name, quantity, manufacturer name, expiry date, batch number.
  4. E-pharmacy details including name, address and signature of registered pharmacist in charge.
  • Prohibition of certain drugs: The E-pharmacy registration holder should now no longer deal in pills which can be blanketed beneath the narcotic and psychotropic classes as noted inside the Narcotic Drugs and Psychotropic Substances Act, 1985.
  • Periodic Examination of E-pharmacy: Every 2 years by the concerned authorities the inspection of the premises of e-pharmacy shall be inspected.
  • Details of Medicines and Patients on the E-pharmacy portal: On the portal, there should be all the information regarding the drugs and the patient details.
  • Verification by Registered Pharmacist: The registered caregiver should verify the main points of the patient, registered health care provider, and organize for the dispensing of medication as per the directions of the registered health care provider.
  • Prevention of Unauthorised Sale: all the E-Pharmacy portals need to maintain and update the information regarding the medicines, types of drugs which are offered, supply channels, details of pharmacists, registered medical practitioners.

Steps to start the E-pharmacy portal

  1. Deciding the business structure. 
  2. Decide a unique name for the portal.
  3. Register the domain name for the portal.
  4. Apply for the registration to Central Licensing Authority in form 18AA through the online portal of Central Govt.

Before setting up your own online drug store site/application or making a vendor account existing on the web drug store entry, you have to set-up a physical drug store as if there should arise an occurrence of a conventional drug store. 

You will require a drug specialist at your online drug store for getting and preparing a solution transferred by the patient or his overseer. Disconnected Pharmacy set-up is obligatory for selling medication online with complete records and methods. 

Here we investigate reports and necessities for beginning Offline Store First and afterwards sell medication on the web.

Licenses required

  • Retail drug license
  • GST number

Retail drug license:

Retail drug permit is given by the District Drug Control Officer who gives the drug permit according to rules given by the State Drug Control Officer. You have to visit the local drug control office to apply for a retail drug permit number. The technique for applying for a retail drug permit might be on the web or disconnected according to state strategy, you will apply. 

Prerequisite and reports for setting up Online Pharmacy: 

  • Area required: Minimum of 100 square feet 
  • Registered Pharmacist: All related reports copy will be joined alongside Drug License application structure 
  • Rent arrangement or possession evidence of premises 
  • Blue print of premises (3 duplicates) 
  • Address Proof of Premises 
  • Refrigerator and Air restrictive Purchase Bill

Goods and Service Tax Number (GST):

GST is required for firms having yearly turnover over 40 lac however if there should arise an occurrence of online deal GST might be obligatory for all organizations/people having any measure of yearly turnover. Peruse total insight regarding applying for Goods and Service Tax Identification Number here. 

In the wake of taking retail drug permits and GST numbers, you have to set-up an online presence. Online presence could be set-up by either assembling own internet business drug store site/application or making a merchant account at effectively present online drug store sites/applications. 

Finishing above advance, you can begin selling medications and medications on the web.

Requirements for E-pharmacy

  • Requires a valid prescription.
  • Online Pharmacy should have a physical address so drug authority can inspect quality and standards of online pharmacy stores.
  • E-pharmacies have to be registered under Central Licensing Authority.
  • Retail drug licenses will be issued by the State Drug Control Authority.
  • Presence of pharmacists is must for receiving prescription and answering the questions of the consumers.
  • Pharmacy cannot dispense habit forming medicines and schedule X drugs.
  • Prescription drugs (Schedule H and Schedule H1) can only be sold out against a valid doctor prescription.
  • Online pharmacies have to comply with e-commerce standards covered under IT act, 2000.

Benefits of E-pharmacy

Through the E-Pharmacy portal, it’s not just the merchant who makes a profit that has the benefit but to the Consumers, Regulators and the Pharmacies.

Benefits to the consumers:

  • Increased Convenience
  • Improved Accessibility
  • Cost Advantage 
  • Improved Patient Compliance and Education
  • Authenticity

Benefits to the Regulators:

  • Tracking of Data
  • Medicine Legitimacy
  • Documentation and Tax Compliance
  • Innovation

Benefits to the Pharmacists:

  • Additional business opportunity for brick and mortar pharmacies
  • Inventory Consolidation
  • Enhanced services of the pharmacist

Comparison between retail and E-pharmacy


Retail Stores

Online Portal


Less convenient because customers have to go to the shop and purchase.

More convenient as one can order it from anywhere and anytime.


Since the customer/patient asks for the medicine standing at the store sometimes they find it difficult to explain their requirements.

Maintain confidentiality about the medications and disease of the patients.

Profit Margins

Drugs are purchased in low quantity so less profit margins.

Purchases drugs in high quantities so receives more discount and gets more profit margins.

Cost Effective

Less profit margin so not able to provide more discount.

High profit margin so can provide more discounts.

Medical Information

Do not provide detailed information about the drugs.

Provide detailed information about drugs like, ingredients, adverse effects, substitutes, etc.


 So, as we all know with the coming time e-commerce has taken up the large place in the market. And this pandemic the importance of e-commerce has shown major growth. This makes things easy for customers and saves time. But at the same time, the government also needs to have some more specific laws which will be dealing with e-pharmacy.

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