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RTI Exclusive: What is the status of India’s online pharmacy regulations?

Without regulations, the fast-growing online pharmacy sector has been plagued with uncertainty.

It has been more than three years since the draft policy to regulate online pharmacies was released, but the government is yet to finalise any rules. Responding to MediaNama’s Right to Information (RTI) request on the status of the draft amendments proposed to the Drugs and Cosmetics Act, 1940 in August 2018, the Ministry of Health and Family Welfare said:

“In response to the draft rules, a number of comments/suggestions objections from stakeholders were received from the stakeholders. Finalisation proposal is extensively being examined by the Central Government and it may not be possible to say any timelines at this stage for finalization of the draft rules.”

The ministry also said that the government is not considering any other regulation apart from the above-mentioned draft rules.

Why regulations for online pharmacy are imperative

Last year, Delhi-based South Chemists and Distributors Association (SCDA) asked regulators to reject the initial public offering (IPO) of PharmEasy, one of India’s largest online pharmacies, on the grounds that online pharmacies are not legal under Indian law. The Confederation of All India Traders (CAIT) also asked for the same stating that the online pharmacy’s business model is “entirely based on gross illegality.”

SCDA had also previously written to the Competition Commission of India (CCI) objecting to PharmEasy’s merger with MedLife and Reliance’s acquisition of NetMeds, but CCI approved both the deals anyway.

The Delhi High Court and Madras High Court in 2018 had both passed orders prohibiting the online sale of medicines without a license. However, the Madras High Court stayed its order in 2019.

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All these instances shed light on the lack of clarity surrounding this sector and the need for regulations.

Number of objections to draft rules received from AIOCD

In response to MediaNama’s query on whether the health ministry has received representations from pharmacies and chemists asking for a ban on online pharmacies, the ministry responded:

“A number of representations from [All Indian Origin Chemists and Distributors] AIOCD objecting the draft rules were also received and forwarded to Central Drugs Standard Control Organisation (CDSCO) for examination and the same is not available with the undersigned.”

This could be one of the hold-ups as the ministry appears to not have received any feedback from CDSCO yet.

Key takeaways of the draft policy

The proposed amendments to the Drugs and Cosmetics Rules, 1945, stipulate the following:

  1. Licensing: Online pharmacies have to register with the Central Licensing Authority (CLA) to operate, without which, no person or company can distribute, sell, stock or exhibit drugs through e-pharmacy portals. E-pharmacies have to pay a fee of Rs 50,000 to register for a three-year license. CLA is a body set up by the Union Government under the Drugs and Cosmetics Rules, 1945.
  2. E-pharmacy portals: E-pharmacies will receive the orders for retail sales through their respective portals; the portals should furnish expansive details about the portal and controlling entities, details of the directors, partners, owners of the e-pharmacy, official logo, return policy, details of the logistics provider, name of the registered pharmacist, and pharmacy council thereof, contact details of e-pharmacy, and redressal grievance procedure.
  3. Patient data localisation: Any information generated through the e-pharmacy portal, such as information from prescriptions, will not be disclosed to any other person for any other reason. Details of the patient have to be kept confidential. However, the e-pharmacy is duty-bound to disclose such information to the Central or State government if/when required for public health purposes. The draft policy also mandates localisation of data within the country, along the lines of the draft Data Protection Bill, 2018 released in July. Per the draft policy, even mirrored data cannot be stored outside India.
  4. Prohibitions: The e-pharmacy portal cannot carry out business or sale of drugs categorised as narcotics and psychotropics under the Narcotic Drugs and Psychotropic Substances Act, 1985, as well as tranquillisers and drugs listed under Schedule X of Drugs and Cosmetics Rules, 1945.
  5. Advertising: “No e-pharmacy shall advertise any drug on radio or television or internet or print or any other media for any purpose.”
  6. Monitoring: The e-pharmacy shall maintain and update its stock information and availability, vendors and suppliers list, registered practitioner. The CLA or the State licensing authority can at any time direct an e-pharmacy to furnish a prescription on the basis of which a drug has been dispensed.

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