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Madras HC suspends ban on e-pharmacies; who said what in the case

The Madras HC has suspended its interim order banning online sale of medicines until the Union Government releases rules governing e-pharmacies. NetMeds founder and CEO Pradeep Dhadha told MediaNama, “The ruling validates our commitment of providing affordable and accessible medicines to customers across the country. As a fully licensed pharmacy, Netmeds is committed to adhering to all the guidelines and standards as prescribed under the Drugs and Cosmetic Act of 1940.”

Madras HC’s interim ban on e-pharmacies

On December 17, the Madras High Court ordered an interim ban on the sale of medicines by e-pharmacies in a writ petition filed by the Tamil Nadu Chemists’ and Druggists Association (TNCDA), reasoning that e-pharmacies were operating without any regulation. The court said that “Central Government had already been given a longer rope” in December 2016, stating that two years have passed and the rules are still in the draft stage. The court demanded that the Union Government and the apex drugs regulator Central Drugs Standards Control Organization (CDSCO) notify rules for the online sale of medicines at the earliest and no later than January 31, 2019.

  • The court further stated that e-pharmacies have to obtain licenses within 2 months of the new rules being passed.
  • Until the rules are notified, e-pharmacies have been banned from proceeding with online sale of drugs and cosmetics.

The Madras HC’s order came just days after the Delhi HC ordered a country-wide ban on the sale of drugs online, in response to a petition filed by Delhi-based dermatologist Zaheer Ahmed. The court also directed the Delhi government to implement the ban.

TNCDA: Ban the online sale of Scheduled Drugs

The Tamil Nadu Chemists and Druggists Association (TNCDA) claims to represent nearly 30,000 members engaged in retail and wholesale pharmaceutical trade. It is affiliated to the All India Organization of Chemists and Druggists (AIOCD). The association petitioned that all online sale of prescription drugs, i.e. drugs under Schedule H, Schedule H1, and Schedule X of the Drugs & Cosmetics Rules, be banned until licenses are granted to e-pharmacies.

  • The court had closed a similar petition by the TNCDA in 2016, without banning the online sale of medicines, after the Union Government submitted that the rules for online pharmacies would be published within 3 months thereon.
  • It reasoned that e-pharmacies could apply for licenses only after the government formulated rules for it, and then directed the Union Government to notify the rules.
  • “Only the draft Rules have been published as on date,” the court noted.

In its current petition, the TNCDA argues that online pharmacies have continued their operations, even though there are no rules governing them yet. This had made the safeguards under D&C Act (pdf) useless. The association stresses that the Act –

  • Ensures the quality and availability under prescribed storage conditions by qualified pharmacists
  • Pharmacists can keep track of medicine until it reaches the patient and can adhere to medicine recall orders by the authorities
  • The data privacy of patients cannot be ensured by e-pharmacies. “Private information relating to disease and treatment cannot be made available for data mining and commercial use by online pharmacies,” says the petition.

Safety, discounts, compliance, a problem, says association

  • Online pharmacies do not comply with the law and sell ‘prescription drugs and controlled substances’ without valid prescription
  • They offer discounts for bulk purchases of prescription drugs

What the e-pharmacies contested and said

Five online pharmacies — NetMeds, 1MG, Practo, Medlife, and Pharmaeasy — were respondents in the petition. They argued that e-pharmacies were beneficial –

  • Purchasing medicines online is easier than physically visiting pharmacies
  • E-pharmacies are crucial for senior citizens
  • They allow patients to purchase medicines discreetly
  • Creates more choice for consumers to find the best service

The epharmas said:

  • NetMeds asserted that it is not violating any law and is following mandatory provisions. As per the act, NetMeds does not dispense drugs for a prescription more than once, unless stated by the physician.
  • Pharmeasy claims that it is not required to register under the Act since it is only a platform connecting users with pharmacies, and providing logistics services. The platform itself does not engage in manufacture, sale, distribution or stock any pharmaceuticals. Moreover, pharmacists empanelled by the platform have their respective licenses.
  • Practo asserted that it is also not required to have a license under the act since it merely provides information on the hospitals, clinics, or pharmacies but does not operate any.
    • Further, its business model is to act as a facilitator for sale and purchase of medicines on its platform.
    • It has 250 licensed pharmacies on its platform
    • Patients have to upload a valid prescription to purchase prescription drugs
    • In fact, Practo is designed such that a request for prescription drugs is rejected unless a valid prescription is uploaded
    • The actual drugs/medicines are acted upon by the neighbourhood pharmacist, who is required to verify the prescription and accordingly provide the medicines
  • 1 MG: Claims that it is a technology platform which connects users to licensed offline pharmacies, the actual sale is conducted between the third-party pharmacist and the customer, which is not prohibited under the act.
    • 1MG serves public interest as it empowers people to access “hard-to-find” medicines, it benefits those with rare diseases, provides convenience for medication for the elderly working professionals and for patients with disability

The court’s observations

Additionally, the court observed that the e-pharmacies

  • offer prices 10-20% lower than the brick-and-mortar pharmacies, reasoning that they are able to do so since they do not have overhead costs like real estate, inventor, salary etc.
  • Their only challenge to ensure timely delivery of medicines

On the challenges of e-pharmacies

  • the online pharmacies receive prescription drugs “based on online questionnaire” instead of a valid prescription, which may cause side-effects
  • Drugs are delivered without any information to the patients
  • Patients may receive counterfeit drugs which are sub-standard or super-potent or adulterated
  • Online pharmacies offer scope for misuse of medical, financial and electronic information
  • Even if draft rules are passed, governments cannot control illegal sales via e-pharmacies

On the benefits and harms of e-pharmacies:

  • Online pharmacies have gotten an impetus due to pharma advertisements and increased exposure of consumers to TV, radio, internet etc, giving patients a “false sense of empowerment”
  • Patients have begun to “self-diagnose” and are inclined to go to online pharmacies
  • Online pharmacies provide consumers with price and availability
  • They provide more privacy than offline stores

According to the Union Government’s recommendations (timeline unknown)

  • The Government of India, after the 47th meeting of the Drugs Consultative Committee, said the state drug controllers were asked to maintain strict vigil to ensure that “such activities” (presumably online sale medicines) were not permitted in their states.
  • However, the government felt that the import of small quantities of medicines by genuine importers for their personal use should not be stopped.
  • The government recommended that there be an “open-minded approach” to the question of e-pharmacies since “it would be difficult to deny that the advent of new technologies would lead to the development of e-commerce”.


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