Blow to e-pharmacies as Centre orders a halt to sales

New Delhi: The government has ordered a halt to online drug sales as it works on rules to regulate the sector, in a setback for companies that have ploughed in millions of dollars to open up a new business arena amid lack of regulation.

In a 28 November order, drugs controller general of India (DCGI) V.G. Somani directed all states and Union territories to prohibit sale of medicines through unlicensed online platforms till draft rules to regulate e-pharmacies are finalized and put in place.

The DCGI’s letter, seen by Mint, cites a Delhi high court order dated 12 December 2018 in a case filed by dermatologist Dr Zaheer Ahmed. The letter was sent by the DCGI to all state drug regulators and the Union health ministry for their information and action.

“As the e-pharmacy rules are at the draft stage, we have issued an order to stop online sales of medicines for now,” said a senior official at the Central Drugs Standard Control Organisation (CDSCO) under the health ministry. “The Delhi high court order had said that online sale of medicines should be prohibited. The e-pharmacy companies don’t have any licences to sell medicines online.”

The Delhi high court order had said drugs were sold online in violation of the Drugs and Cosmetics (D&C) Act. However, e-pharmacies continued to sell online, after securing a stay from the Madras high court.

“Sale of medicines on any online platform should stop according to the order,” said Rajiv Singhal, general secretary of All India Organization of Chemists and Druggists. “Despite previous orders, companies are selling medicines online, which can pose a threat to the health of patients. We are planning to move a case of contempt of court in this regard.”

E-pharmacies have always claimed that their business model is well covered by the Information Technology Act, 2000 under the concept of intermediaries, and the pharmacy retail operations are covered by the Drugs and Cosmetics Act.

According to Prashant Tandon, founder and CEO of 1mg, while some online pharmacies comply with the law, there are “miscreants”—mostly outside India and some local players—which do not follow laws and medicines are sold without prescription or licence. “In our model, there is a platform on which the customer uploads the prescription, which is then passed to a physical, licensed store with a qualified pharmacist. This store operates under the purview of the D&C Act and Rules.

“These orders should impact any player, who is selling medicines directly in violation of the Act. A similar order came from CDSCO in December 2017 also, and when we sought clarification, we were told that there is no cause to worry if we operate a model in compliance with the law.”

According to the proposed rules, only government-registered e-portals can sell medicines, and they must retain prescriptions and verify details of patients and doctors.

“We have worked hard to build the online pharmacy sector from something that didn’t exist five years back, into a viable and critical industry that reaches lakhs of people every day providing life-saving, affordable medication,” said Pradeep Dadha, founder and CEO of Netmeds.