Pharmacy Fiasco: Online Pharmacies To Seek Legal Recourse As Madras High Court Bans Online Sale Of Drugs & Medicines

Chennai, December 19: Six e-pharmacy companies approached the Madras High Court to appeal against the recent order directing a blanket ban on the online sale of medicines till the Government of India comes out with a new regulation. A common platform formed by these six major players have impleaded in the petition filed by the Tamil Nadu Chemists and Druggists Association (TNCDA).

TNCDA also urged the government to notify the regulations at the earliest and not later than 31st  January as stated in the order given by the Madras High Court this week.

Last week, as reported by the Law Chronicles, a bench of Chief Justice Rajendra Menon and Justice V K Rao of Delhi High Court ordered a complete ban on online pharmacies selling medicines across the country as the same is not permitted under the Drugs and Cosmetics Act, 1940 and the Pharmacy Act, 1948.

After Delhi High Court decision, the Madras High Court ordered a complete ban on the sale of medicines and requested the government to pass draft regulations passed by the Drug Technical Advisory Body (DTAB) in September. It also requested the e-retailers to obtain license within two months from the date of notification of the new regulation.

In order to tighten the leash on the e-pharmacies which were selling counterfeit medicines and with an aim to regulate the online sale of drugs, the Union Health Ministry in September came out with draft rules on “sale of drugs by e-pharmacy”. The rules stated that no person should offer, exhibit or keep a stock of drugs and sell them through an unregistered online platform. According to the draft guidelines, e-pharmacies have to register for a license with the Drug Controller General of India (DCGI), which will be valid for three years. However, it did not specify any penalties on the violation.

According to a report by BloombergQuint, e-pharmacies have raised over $100 million in funding this year. The recent order by two these two courts have come as a shock to the e-retailers but the experts believe that the new regulations will bring about more transparency and will encourage more entrepreneurship and FDI interest in this sector. But protesting against the same, pharmabiz tweeted out stating

This issue arose after a writ plea was submitted by several traders and Tamil Nadu Chemists and Druggists Association stating that medicines sold by these retailers online are fake, expired, contaminated and unapproved. It also contended that the law does not allow the shipping, mailing or door delivery of prescribed medicines and even though the Government has made several amendments to the law for pharmacies, not much has been done to regulate the same. The court has now given online pharmacies four weeks to file a counter affidavit.

Regulation of online sale of medicines in India
As many as 250 online pharmacies have sprung up in India in recent years. To woo customer, these online platforms, just like any other e-commerce website, sell medicines at discounted prices with free home delivery. To this, traditional pharmacists have time and again contended that if such websites remain unregulated, their business will be affected. According to a report by Deloitte, the Indian e-commerce industry is estimated to grow at a compounded annual growth rate of 34% by 2020. Currently, e-pharmacy portals in India operate on the inventory or marketplace model which is in compliance with the IT Act, 2000 and the guidelines of the Government of India.

According to the draft rules published by the government, “e-pharmacy” means the business of distribution or sale, stock, exhibit or offer for sale of drugs through a web portal or any other electronic mode and “e-pharmacy portal” means a web or electronic portal or any other electronic mode established and maintained by the e-pharmacy registration holder to conduct business of e-pharmacy.

As affirmed in the notification by the Office of Drugs Controller General through its notification dated 30 December 2015, there is no specific legal regime governing e-pharmacy business in India. Drugs and Cosmetics Act, 1940 does not distinguish between medicines sold offline and online. In the absence of a legal framework, e pharmacies are not able to secure their foot in the marketplace.

It is still to be seen how the implementation of regulations will address the aforementioned challenges and concerns.





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