Home E-commerce Need for the regulation of e-pharmacies in India

Need for the regulation of e-pharmacies in India

July 6, 2021

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pharmacy plants with capsule medicines — Image source: https://bit.ly/3cDRnbe

This article is written by Sabaat Fatima, from HILSR, School of Law, Jamia Hamdard. This is an exhaustive article that will give you a brief knowledge about the legal framework of the e-pharmacies in India and the demand for implementing it with the amending draft rules.

Table of Contents

Introduction

Pharmacy is a science which deals with the preparation of medical drugs. An online pharmacy is what we call an e-pharmacy that operates over the internet wherein the seller sells the medicines online i.e., via mail, courier, or delivery persons. Since the origin of e-pharmacies in India, the consumers have great satisfaction due to which there is an increased demand for this sector. In India, it is still at its developing stage as compared to the U.S.A and Europe where it is fully developed as a sector. But still, it has managed to install itself in India as an excellent innovative concept for the healthcare industry. The pharmaceutical industry of India is regarded as the largest supplier of generic medicines globally. The importance of e-pharmacy was felt during times where there were moving restrictions due to the lockdown in the Covid-19 pandemic. It helped the nation in this pandemic day and night, though the workers were exposed to the virus yet e-pharmacies worked 24×7 to keep the services available by taking care of the people’s health.

What are e-pharmacies

E-pharmacy is a platform for buying medicines online and are delivered to the customers. In 2015, an expert committee was formed by the Union Health Ministry under the chairmanship of the then Maharashtra FDA Commissioner Dr. Harshdeep Kamble. On August 28, 2018, the Union Health Ministry released a comprehensive collection of the draft regulations to amend D&C Rules by adding separate sections for governing online pharmacies in the country. Ever since the issue has been entangled within the ministries regulatory circle. In the latter year, IIPA (Indian Internet Pharmacy Association) was formed by 11 e-pharmacy start-up companies like Zigy, Netmed, MediDart, Medlife, Medstar, Chemist, Pharmeasy, 1MG, Bookmeds, Save my meds and Save on medicines. These e-pharmacy companies guaranteed an ethical set of rules and regulations with strict constancy to the existing legal framework of the nation. The Government of India supported this development as it promotes digital India and to see e-pharmacy as a part of it is appreciable.

According to the Frost and Sullivan Report, the e-pharmacy Industry is estimated to reach Rs 25,000 Cr in 2022. In January 2020, the nation’s top association of industry organizations, FICCI (Federation of Indian Chambers of Commerce and Industry), asked affirmably to convict notice for e-pharmacy regulations to forestall misconceptions among stakeholders. A sector specialist and former CDSCO (Central Drugs Standard Control Organisation) National Advisor (Drugs Control), Dr. B R Jagashetty has stressed and encouraged the government to come out as early as possible with the final e-pharmacy regulations.

Benefits and risks of e-pharmacies

Benefits

E-pharmacies are convenient and accessible for the customers.
They are accessible to rural areas where there are limited pharmacy shops.
They are cost-effective as they mostly offer discounts.
They provide information regarding health such as side effects, warnings, drug interconnections, and automatic medicine reminders.
They oversee the cold-chain drugs which are controlled at 2-8 celsius degree temperature by storing them in boxes specifically made for them to maintain the effectiveness and stability of insulin, hormones, and other blood-related products for a long time.
They provide other facilities to the consumers as compared to the retail pharmacies such as online consultations with the doctors, booking of diagnostic tests, etc.
In the metropolitan cities where life is too complex and where the families are nuclear e-pharmacies are very comfortable for them or where the residents are far from physical pharmacy these e-pharmacies are extremely helpful.

Risks

Illegal e-pharmacy may sell low-quality drugs.
During transportation, drugs can be mishandled which can cause effects on the drugs.
The internet is not easily accessible by minors; they can purchase medicine online for consuming them without parental control hence, it can lead to overconsumption of drugs.
Some drugs require a certain temperature for storage and if not watched carefully these sensitive drugs may lose their efficacy and potency.
The customer’s privacy is at risk as everything is online.
E-Pharmacy dispenses drugs against the scanned copy of the prescription and hence it can be easily manipulated that can enhance over-consumption of drugs.

The present legal framework regulating e-pharmacies

Presently, the main law governing the manufacture, sale, and distribution of online pharmacies in India is the Drug and Cosmetics Act, 1940; Drugs and Cosmetic Rules, 1945; Pharmacy Act, 1948; and the Indian Medical Act, 1956, Code of Ethics Regulations 2002, Narcotic Drug and Psychotropic Substances Act, 1985 and Drug and Magic Remedies Act, (Objectionable Advertisement) Act, 1954. The online sale of prescription-based medicines from the pharmacy website is defined under the Information Technology Act, 2000.

Several provisions are provided under the Drugs & Cosmetics Act and Rules to ensure the quality and standard of the drugs though, these provisions are not with the online sale of medicines. Some rules and regulations are:-

Medicine can be sold only by registered pharmacies with a valid retail license.
The drugs specified under Schedule H, Schedule H1, and Schedule X of the D&C Rules can be only sold with a valid prescription from a registered medical practitioner.
As per the Government of India, exporting medicines is illegal.
A registered practitioner can only sell any medicine at the prescription of a medical practitioner.
Selling drugs as per the prescription to a minor is prohibited.
Selling of banned drugs via online or offline mode is prohibited.
Selling medicines higher than the MRP is an offence punishable under Indian law.

The Indian Pharmacy Law makes no difference between online and offline Pharmacy. Although, some guidelines are laid down in the Indian Pharmacy Legislation.

As per the Drugs and Cosmetics Act, and Drugs and Cosmetics Rules, all medicines can be distributed with a valid prescription only and are compulsory for sale in India.

Section 18 of the Drugs and Cosmetics Act and Rule 61 of Drugs and Cosmetics Rules, 1945 states that distribution of the prescribed medicines can only be done by a registered pharmacist mentioned in Section 42 of the Pharmacy Act, 1948.

Analysis of draft e-pharmacy rules

Overview

In December 2015, a notice was released to the State and Union Territory Drug Controllers by the office of Drugs Controllers General stating that the provision under the D&C Rules would be applicable to not only offline selling of drugs but to online selling of drugs too. The notice paved the way for the issuance of a license for pharmacy as well.

In August 2018, the Ministry of Health and Family Welfare vide its notification and came out with a draft to amend the D&C Rules, 1945 (“Rules”). The draft included a chapter on “sale of drugs by e-pharmacy”. The Draft Rules first introduced the word ‘pharmacy’ and defined it as a business sale or distribution, exhibit, stock or offer the sale of drugs through a web portal or any other electronic mode. The term ‘e-pharmacy portal’ has been characterized as a web or electronic portal or some other electronic mode set up and retained by the e-pharmacy registration holder to lead the business of e-pharmacy and ‘sale by way of e-pharmacy’ has been characterized as a deal whether to a hospital, dispensary pr a clinic, educational or research organization or to some other individual through e-pharmacy via retail sale.

Further, provisions for application for registration and its validity; conditions for registration imposed on the e-pharmacy like location, disclosure of information, the procedure for distribution and sale, etc. were provided. Any advertisement of a drug on television, radio, print, internet, or on any other social media for any reason is strictly prohibited. There is a limitation in dealing with narcotics and psychotropic drugs specified under the Narcotic Drugs and Psychotropic Substances Act, 1985; drugs and tranquillizers are mentioned under Schedule X of the Rules. Furthermore, a complaint redressal mechanism for e-pharmacy has been introduced to provide a right to file a complaint against the Drug Controller if there is any doubt related to the supply i.e., adulterated, misbranded drugs, etc, besides the Consumer Protection Act.

Many petitions were filed in the Delhi and Madras High Court to seek a ban on all e-pharmacy operations on the grounds of public safety. Particularly, a petition filed by Dr. Zaheer Ahmed in 2018 before the Delhi High Court contended that the selling of drugs online is prohibited under the law. In this case, the Delhi High Court ordered an interim injunction against the sale of medicines online. Later, a similar petition was filed in the Madras High Court by the Tamil Nadu Chemists and Druggists Association, wherein it was decreed that the online retailers should not continue with their online selling of medicines until the Draft E-Pharmacy Rules are notified. In an official letter dated November 28, 2019, the Drugs Controller General of India (DCGI) issued a notification to all drug Controllers to enforce an order given by the Delhi High Court in 2018 in the case of Zaheer Ahmed v. Union of India (2018) which prohibited the online sales of medicines without a valid license.

Although the Government of India has framed the draft Rules to amend the D&C Rules, the same has not been notified yet and therefore, awaits enforcement.

Registration

Any person who wants to start a business of e-pharmacy can do so by registering at the Central Licence Authority by filing Form 18AA through the online portal along with the sum of Rs 50,000 and documents specified in the form. The issued registration will be valid for only 3 (three) years and the same can be renewed subject to a fee of Rs 50,000, if within 6 months the registration is not renewed it is deemed to be expired. The detailed conditions for registering an e-pharmacy are mentioned under Rule 67-M.

Distribution

Steps required to be followed for the online sale and distribution of medicines:

All the receipts of the orders must be maintained along with the customer’s details and the registered medical practitioner on the prescription by the registered pharmacist.

Procurement of the medications according to the prescription of the enlisted medical specialist (from any authorized retail or discount premises under the Act and the Rules) within the time conveyed to the customer at the hour of placing an order.

Supply of the acquired medications to the customer against a money or credit reminder created through the E-Pharmacy Portal. This notice should be kept up as a record by the Registration Holder.

Inspection

The CLA( Central Licensing Authority ) and SLA( State Licensing Authority) have a right to annually screen the data maintained by the registration holder of the e-pharmacy portal to guarantee consistency with the Act and the Rules.
The CLA and SLA may demand the prescription from the Registration Holder used for dispensing drugs to the customers, for auditing the transaction.
The officers authorized by the CLA or the SLA will inspect the place from where the e-pharmacy business takes place every 2years.

Lacunae in the Draft Rules

The Draft E-Pharmacy Rules failed to address some issues regarding the verification of the prescription, its validity, misuse, and dispensing of drugs as per it. It also failed to mention issues concerning the functioning of illegal pharmacies, multiple license issuance, storage, and transportation.
Though the Draft has allowed that the customers’ information can be accessed by the Central or the State Government, it failed to provide the situation when the government can get such information.
The scope of ‘public health’ can lead to the infringement of the customer’s Right to Privacy guaranteed under Article 21.
Additionally, it missed providing the specific name of the authority within the government that can have the access to such information.
The Draft does not direct the e-pharmacies to display a privacy policy on their websites for their customers.
The Draft Rules have not given a time frame until when the e-pharmacies are required to retain the customers’ information on their portal.
It is expressed in the Draft E-Pharmacy Rules that the information of the customers cannot be sent outside India, thereby conflicting with the Personal Data Protection Bill, 2019 which permits such information to be sent outside India at the assent of the patient.

The way forward

Holding massive potential, the e-pharmacies address the issue related to cheapness and availability of medicines in India, thereby making it mandatory to form steps that ought to be taken to provide the e-pharmacy sector with adequate shields and under severe administrative control to secure the interest of the customers.
The e-pharmacy sector should adopt a strict licensing mechanism i.e., a logo and an enlistment number can be created for the e-pharmacies that will enable the customers to check the validity of the platform. For Example, A common logo is issued by the European Union for the operation of e-pharmacies.
Data regarding the patients ought to be stored digitally to prevent misuse of the information.
E-pharmacies should be linked with the government health schemes to proficiently take into account an enormous part of the population in the rural and urban areas with neglected medical necessities.

Conclusion

With the increased dependence on e-commerce and the Covid-19 problem which enables customers from visiting the pharmacies physically, e-pharmacies are in demand. There is an urgent need to draft e-pharmacy Rules taking into note all the problems discussed above. To efficiently regulate e-pharmacies policymakers can adopt other countries like the USA and the EU. For example, to save the customers from falling prey to illegal websites, e-pharmacies can introduce common logos, e-monitoring programs, e-prescriptions of medicines to tackle problems related to the sale of medicines online in India.