The emergence of E-Commerce has made ground-breaking changes around the world. With the passage of time, individuals have the alternative of online platforms at their disposal for procuring myriad articles. A similar convenience is being experienced regarding medicines with the advent of E-Pharmacy. E-Pharmacies are virtual platforms that take an order of medicines over the internet and deliver them to patients via mail or dedicated delivery companies.
The Indian Brand Equity Foundation (IBEF) report anticipates the Indian pharmaceutical industry to grow at a compound annual growth rate (CAGR) of 22.4 percent to touch US$ 55 billion by 2020. Due to the increase in internet usage and smartphone ownership, the Indian E-Pharmacy market is a sector of great promise anticipated to reach a market cap of US $2.7 Billion by 2023. The emergence of players like 1mg, Medlife, Netmeds, et al has facilitated its rise as a viable market with its import to customers apart from its great significance regarding future business to business prospects.
However, without a definite regulatory framework, the potential of the E-pharmacy industry to become a significant sector in the economy will be inhibited. Moreover, in view of the COVID-19 pandemic (SARS-CoV-2), the need for sectoral rules and regulations has assumed greater importance.
In the Indian legal landscape, the norms for the trade of medicines are encapsulated within the Drugs and Cosmetics Act, 1940 (D&C Act), Drugs and Cosmetics Rules, 1945 (D&C Rule), Pharmacy Act, 1948, Drugs and Magic Remedies (Objectionable Advertisement) Act, 1954, Indian Medical Council Act, 1956, Narcotic Drug and Psychotropic Substances Act, 1985, Information Technology Act, 2000 (IT Act)., and Code of Medical Ethics Regulations, 2002.
Although, they do not contain the terms for online sale and regulations of pharmaceutical medicines. This led to germane stakeholders tendering a proposal to the Union Government. Subsequently, a sub-committee under the chairmanship of Maharashtra’s ex-Food and Drug Commissioner Dr. Harshadeep Kamble was formed in the 48th Drug Consultative Committee in 2015, to evaluate the potential of the Indian online pharmacy sector. Following a protracted spell of deliberations and cogitations, the Ministry of Health and Family Welfare through the dissemination of its notification G.S.R. 817 (E) on August 28, 2018, promulgated a draft for amendments to the Drugs and Cosmetics Rules, 1945 (“Rules”).
Part VIB of the Draft Rules stipulates the terms of sale by e-pharmacies. According to the draft rules, the term ‘e-pharmacy’ defines the transactions of distribution or sale, stock, exhibit, or offer for vending drugs through web portals or other electronic modes. Further, the terms ‘e-pharmacy portal’ and ‘sale by way of e-pharmacy’ have also been mentioned in the draft.
The vital suggestions given in the draft rules for “Sale Of Drugs By E-Pharmacy“ also entail, inter alia, the compulsory enrollment of E-pharmacy platforms with the Central Drugs Standard Control Organisation under the Act for a registration fee of Rs. 50,000 before the onset of business proceedings. The validity of the registration would be for 3 years and there is a provision of license renewal if the Pharmacy is keen on continuing its operations. They also mandate a Compulsory 24×7 customer support facility and the presence of a grievance redressal system. In addition, the e-pharmacy needs to have a licensed pharmacist for addressing customer queries. The purveyance of any drug to customers ought to be made against a cash or credit memoranda after the mandatory substantiation of the details of the patient and the medical practitioner given on the prescription alongside the maintenance of the transaction. The trade of drugs encapsulated under the Narcotic Drugs and Psychotropic Substances act, 1985, along with tranquilizers and drugs mentioned under Schedule X of Drugs and Cosmetics Rules, 1945, is proscribed under the Draft rules.
The rules also instruct the maintenance of non-disclosure and confidentiality regarding any information procured from customers through a prescription or otherwise, except to the Central and State government, if needed, for measures of public health. The storage of health information gathered or cloned by the platforms ought to be done within domestic borders, which means, it shall not be kept or dispatched outside Indian territory.
Rule 67-M of the draft stipulates terms like compliance with the Information Technology Act, 2000 and correlating rules, such as briefing the Central License Authority of any alteration in the code of conduct of the said e-pharmacy.
The provisions of regular monitoring by the Central License Authority to ascertain compliance with the terms of registration under the rules has also been specified. In case of non-adherence, the Authority possesses the right of suspension to cancellation of the e-pharmacy registration upon the issuance of a show-cause notice. Moreover, the drug controller of the relevant State has been given the power to decide a consumer complaint in event of adulterated, non-standard quality, or misbranded drug supply by e-pharmacies under the Consumer Protection Act, 1986. However, the Draft Rules haven’t received any approval yet.
Following the circulation of the Draft Rules, numerous petitions were filed in Delhi and Madras High Court(s) in pursuance of a ban on all e-pharmacy proceedings on grounds of public safety.
Henceforth, the Madras High Court adjudged the imposition of a temporary ban on the online sale of medicines and also instructed the government to disseminate the regulations in the public forum by January 31, 2019. The deadline was extended to July 31, 2019, afterward. The decision was affected by a petition filed by Tamil Nadu Chemists and Druggists Association.
Additionally, the Drugs Controller General of India (DCGI), in an official letter dated November 28, 2019, promulgated a notification to all drug Controllers to impose the order given by the Delhi High Court in December 2018 in Zaheer Ahmed v. Union of India which forbade online vending of medicines minus a valid license.
The paucity of clear norms and the grey areas arising between online and offline pharmacies under the Drugs & Cosmetics Act, 1940, have been leveraged well by E-pharmacies. Major Indian E-Pharmacy enterprises in India claim that their functioning is modeled on the “marketplace model”. This implies that they function as appendages of physical medical outlets that are licensed to sell drugs under the Drugs & Cosmetics Act, 1940. The online platform for sales is safeguarded by the regulations for “Intermediaries” under the Information Technology Act, 2000.
The draft doesn’t address the operationality of E-pharmacies on a marketplace model wherein such enterprises function as a catalyst between consumers and licensed pharmacies along with any need of registration besides the inventory-based pattern. Similarly, the proviso mandating periodical inspections by State Licensing Authorities also presents issues regarding licensing of E-pharmacies. It’s unclear whether the enterprises would have to seek distinct state licenses for their operations in different states in lieu of a nationwide license as the authority to track drug sales lies with State Authorities.
The rules also don’t specify the methodology to be adhered to, by the registered pharmacist for the authentication of patient details and that of the medical practitioner before provisioning prescription drugs. There’s an absence of norms to standardize the process of verification unlike in countries such as the USA. In India, invariably, the screenshots of the prescriptions are attached as a form of proof.
The legislators need to alleviate the uncertainty which surrounds the sharing of health information of consumers with the government “for public health measures”. It has to be ascertained that the grounds on which the health details of the customers will be sought isn’t haphazard. Another lacuna is that the minimum designation of the authority which could direct the E-pharmacies to disclose the health particulars hasn’t been addressed.
Moreover, the draft rules do not contain any provisions for the basic timespan till the E-pharmacies can keep the electronic record of patients and the medicines obtained by them. The rules strictly proscribe third party divulgence of customer information and do not contain any terms for such information to be shared even in internal matters like enhancing the serviceability of the online platforms. This divests the E-pharmacy enterprises to ameliorate their functionality.
Ultimately, the necessity of localization of data under the draft isn’t in accordance with the Personal Data Protection Bill, 2019 and the Digital Information Security in Healthcare Bill, 2018 which permits trans-border sharing of health-related information contingent upon the express approval of the patient. This dissonance may prompt an administrative issue in the organization of such information.
Administrations around the world have mandated e-prescriptions and health records which automatically feed into E-Pharmacies’ database. For example, New York has enforced a blanket ban on paper prescriptions. China is witnessing the advent of street-side kiosks that serve as medical clinics that can be used by customers for prompt health consultation and medicine dispensation or home delivery at the conclusion of the consultation session.
Globally, many e-pharmacies offer the Pill Pack style of dispensing medicines where medicines are pre-packed as per the dosage schedule. Retail level automation facilitates cost-cutting and providing healthcare benefits to patients at nominal pharmacy fees.
For example, in Canada, any licensed Pharmacy that functions as an e-pharmacy must adhere to the relevant code of conduct within the bounds of its province. The licensing procedure takes place at the provincial level instead of the national level. Therefore, e-Pharmacy service providers ought to render services offline with a physical street address to engage in the sale of drugs online.
On similar lines, the USA has a program called Verified Internet Pharmacy Practice Sites (VIPPS) certification which is given to Pharmacy websites that comply with the defined rules and standards prescribed by the VIPPS program. The online authentication of Pharmacies with the Drug Enforcement Administration is key for dispensation of “controlled substances”. They must also adhere to the directions specified by the Food, Drug, and Cosmetic Act. In addition to these terms, it is mandatory for the Pharmacy to be situated within the USA.
Furthermore, the FDA Guidelines stipulate that a legal, regulated “online Pharmacy” needs to have a valid prescription, a physical location in the United States, alongside being licensed by the state board of Pharmacy in the state where it has its operations. In addition, e-prescription or original paper prescription is the only form of prescription that is permissible for a VIPPS Pharmacy. It bars the Pharmacy to provide drugs on the basis of scanned prescription or its screenshot.
Presently, the draft rules are under the consideration of a high-level group of ministers regardless of having been approved by the Drugs Consultative Committee and Drugs Technical Advisory Board. The ongoing consideration is for the purpose of fine-tuning the proposals apropos reservations by traditional medical pharmacists.
In January 2020, the Federation of Indian Chambers of Commerce and Industry vociferously urged the dissemination of draft e-Pharmacy Rules as a matter of high priority for mitigating the lack of certainty among different stakeholders. Additionally, it opined that deferral isn’t ideal for this significant and developing division of commerce. It also exhorted that e-pharmacy stores are in consistence with the aims of national advancement.
The onus is on the government to make the bill free of any ambivalence and amend the provisions which are restrictive minus the reason. It’s also crucial for the government to facilitate the creation of norms that lead to equal opportunities between the online and offline pharmacies to ascertain the incorruptibility and high standards of drugs as a whole.
The continual upward trajectory of the E-Commerce sector and the present circumstance enforced due to the COVID-19 pandemic need to be borne in mind. In event of its implementation, the Draft rules would prove instrumental in furnishing a much-vaunted legal regime for ensuring proper operability of Indian e-pharmacies.
Devarshi Singh is a second-year law student at Government Law College, Mumbai, India.
Suggested Citation: Devarshi Singh, Analysing the Contemporary Indian E-Pharmacy Scenario, JURIST – Student Commentary, January 25, 2021, https://www.jurist.org/commentary/2021/01/devarshi-singh-epharmacy-india/.
This article was prepared for publication by Vishwajeet Deshmukh, a JURIST staff editor. Please direct any questions or comments to him at commentary@jurist.org.
