E- Pharmacies in India: Need of A Regulatory Framework

Author: Simran Pradhan

3rd Year B.A. LL.B
Symbiosis Law School, Hyderabad

1. INTRODUCTION

According to the Britannica, Pharmacy[1] is an art and science which deals with the standardization and preparation of the medical drug. But in the present write-up the term pharmacies mean the shops, where the drugs and medicines are stored and then sold to the general public, the E-Pharmacy is an “online pharmacy”, it’s the latest development in the pharmaceutical industries where the drugs and medicines are now sold online through the medium of internet. The online pharmacy is also named as the E-Pharmacy or the Mail Order Pharmacy; this is because to buy drugs from such, the customers 1st has to order the drugs online and then the same are delivered through the mail or “shipping companies”. In countries like the USA and Europe, the E-pharmacy sector is already developed and completely functional but unlike them, the e-pharmacy sector in India is at its developing stage. In the last 5-10 years, the pace of development for such sectors in India has been on a steady rise, various startups are coming forward for the development of the e-pharmacy industries in India with the ultimate aim of providing the generic and affordable drugs in the remotest of the remote areas, that are presently out of the reach of the physical/normal pharmacies.

2. ADVANTAGES OF THE E-PHARMACIES

The main disadvantage of the normal pharmacies is that, like other stores, they are focused more on profit-making, due to which they exist only in those areas where they can supposedly suffer the bare minimal losses but gain the maximum sale or profit. Because of this, the remote areas of India are largely ignored by the pharmacies, which see no profit in setting up drug stores there. The populations of such areas hence suffer & remain deserted from having proper medications and are forced to use other alternatives. The above disadvantage of the physical pharmacies is overcome by the e-pharmacies which aim at proving the drugs in the remotest of the remote areas, which are presently out of the reach of the physical/normal pharmacies.

The e-pharmacies also offer other facilities to the customers which are not provided by the physical pharmacy like the online consultation of doctors, booking of the diagnostic tests “Radiological/Pathological”, “consumer education through value-added information/ educational leaflets/articles on their websites” etc. [2]

3. CLASH BETWEEN THE TWO PHARMACY COMMUNITY

Ever since the arrival of e-pharmacies in the Indian markets, we have witnessed a clash between the two pharmaceutical communities (online and offline). The physical pharmacy has been very much vocal about its opposition to the business model adopted by the e-pharmacies. The AIOCS[3] under its leadership had launched a national level strike aimed against the e-pharmacies.

AIOCS forwarded allegations against the online pharmacy that states “verification of drug quality in online retail is difficult and the sale of psychotropic substances will also increase online”,[4] as a rebuttal to the allegations made by AIOCS, the IIPA[5] assured them by stating that, “the e-pharmacies will enable transparent drug dispensing mechanisms and give high accountability as the entire procedure will be tracked”.[6]

4. THERE are NO REGULATIONS FOR THE E-PHARMACY

The present laws which supervise the drug regulations in India are “Drugs & Cosmetics Act” of 1940, “Drugs & Cosmetics Rules” of 1945, “Pharmacy Act” of 1948, “Indian Medical Act” of 1956 and “Code of Ethics Regulations” of 2002, “Information Technology Act” of 2000 etc. These laws ensure the distribution of power between the State and the Central government, where the central government is responsible for providing the licenses for the drug imports and the State governments is responsible for such drugs manufacture, sales & final distribution, this is administered by the Drug Control Administration of the State.

The above-mentioned acts which supervise the administration of pharmacies in India were made in times when there were none-pharmacies where the drugs were sold online. And nothing has changed, we still don’t have any regulations to control or administer the e-pharmacies in India. For example, the 1940 act[7] which deals with the drugs doesn’t differentiate between the drugs sold online or offline. Due to the lack of such laws and regulations for the e-pharmacies, many concerns have been forwarded to the government in recent years. Acting upon the forwarded concerns, now both the central health ministry and the CDSCO[8] are working to create a new policy to administer the online sale of drugs and medicines.

5. CURRENT LEGAL STATUS & WHY IS THERE A NEED FOR REGULATIONS?

Due to the lack of any proper laws and regulations regarding the registration and licensing, to govern the selling of the online-drugs, the E-Pharmacies until very recently were operating with their wimps and fancies.[9]

The petition was filed in Delhi HC against the arbitrary functioning of the e-pharmacies and the failure of the central government to make appropriate laws for regulating such online pharmacies, the Delhi HC in 2018 ordered an ‘interim injunction’ on the sale of medicines by e-pharmacies without prior ‘retail license’.

Upon carefully observing the 2018 Delhi HC order, we can see that it doesn’t bar the online selling of drugs, but it only makes such online sale subject to certain rules and regulations (i.e. “obtaining a license following this provision”), meaning that the unlicensed e-pharmacies are prohibited from selling medicines online.[10]

Currently, the sales of drugs by e-pharmacies are governed under the 1940 act[11], 1945 rules[12] and 1948 act[13]. Section 18 of the 1940 and 1945 act states that no drugs can be sold without procuring a license, further the drugs that are to be sold, has to be prescribed by a registered pharmacist.

Similar to the aforementioned section, section 42 of the pharmacy act, allows only the registered pharmacist to distribute drugs as per the prescription. Further section 27(b)(ii) of the 1940 act talks about the penalties in the form of fine and imprisonment, in case of “non-compliance with these provisions”.

Due to the deficiency of a proper regulatory framework for e-pharmacies, the rules and regulations forwarded in the above sections and acts shall be therefore followed before distributing drugs, (i.e. “brick and mortar pharmacies license”).

Besides the framework provided in the 1940 and 1945 act (D&C), the 2000 IT Act also regulates e-pharmacies. As per section 2(1)(w), e-pharmacies qualify as being an intermediary cause they ease the supply delivering drugs to the customers through the use of electronic mediums. According to section 79 of the IT act, a “safe harbour protection” [14] is provided to the e-pharmacies from being termed as unlawful acts (for example infringement of patent done by selling the drugs from 3rd party or retailer on their online platform).

6. THE DRAFT PROPOSED FOR E-PHARMACIES

After the 2018 Delhi HC judgment, the central government has worked on a new regulation specifically made to regulate the e-pharmacies; the draft for that policy was released by the government for further public recommendations[15] and later the final draft titled “The Drugs And Cosmetics Amendment Rules, 2018”[16] was finalized but is yet to be enforced and publicized in the official gazette of India.

7. CHALLENGES AND CRITICISM IN THE DRAFT REGULATION

According to the writer, the possible criticisms of the draft rules are hereunder mentioned:-

  • The disclosure mandate in the rules is vague and arbitrary; it doesn’t specify any guidelines to determine what would make a “public health purpose” which will force the e-pharmacies to disclose their customer’s information with the State or central government.
  • Localization of the customers’ info; The rules state that the e-pharmacies are bound to keep the customer’s information within the bounds of India territories, this localization of info can potentially increase the vulnerability of the cybersecurity compromises to the health care data.
  • This data has no linkage with the PDPB Bill, 2018; the localization of the customers’ health information is not following the PDPB Bill of 2018 (especially section 41(1) & (3)(a)
  • There is ambiguity present in what sources of power are present to invalidate the registration.

 

8. CONCLUSION

The present write up is aimed at providing information to its readers as to why do we in India need a proper regulatory framework for our e-pharmacies and why do we lack it in the 1st place? Further, the writer explains the pros and cons of the e-pharmacies in India and what current legal positions its regulation holds in India. The paper lastly talks about the 2018 Delhi HC judgment and the draft rules made by the central government to facilitate the regulations of the e-pharmacies in India.

 

References:

[1] John C. Krantz , pharmacy, BRITANNICA, “Pharmacy, the science and art concerned with the preparation and standardization of drugs.”

https://www.britannica.com/science/pharmacy

[2] Vijaylaxmi Rathore, India: Regulatory Guidelines For E-Pharmacy Start-Ups, MONDAQ, https://www.mondaq.com/india/food-and-drugs-law/637554/regulatory-guidelines-for-e-pharmacy-start-ups .

[3] All India Organization of Chemists & Druggists (AIOCD).

[4] Supra note 2.

[5] The Indian Internet Pharmacy Association (IIPA) is a self-regulatory body for E-Pharma portals.

[6] Supra note 2.

[7] The drugs and cosmetic act,1940.

[8] Central Drug Standard control Organization (CDSCO).

[9] CDSCO REPORT,

http://www.cdsco.nic.in/writereaddata/Sub-Committee%20Report%20on%20e-pharmacy.pdf

[10] Apoorva Mandhani, Restrain Online Sale of Medicines by E0-Pharmacies: Delhi HC Directs Center & Delhi State Government”, LIVE LAW,

https://www.livelaw.in/restrain-online-sale-of-medicines-by-e-pharmacies-delhi-hc-directs-centre-delhi-govt-read-order/

[11] Supra note 7.

[12]GOVERNMENT OF INDIA MINISTRY OF HEALTH AND FAMILY WELFARE (Department of Health) THE DRUGS AND COSMETICS ACT AND RULES, http://www.naco.gov.in/sites/default/files/Drug%20%26%20Cosmetic%20Act%201940_1.pdf

[13] The pharmacy act 1948.

[14]The safe harbour protection however, is subject to the discharge of duties with due diligence by e-pharmacies. For instance, upon receiving actual knowledge (i.e. notice by writing or e-mail) of unlawful acts, e-pharmacies are required to remove access from unlawful content (patent infringing drugs) from their portal within 36 hours”.

[15]Sale of drugs,

pharmacieshttp://www.cdsco.nic.in/writereaddata/2018_08_28_Draft%20GSR%20817(E)_Sale%20of%20Drugs%20by%20E-Pharmacy.pdf.

[16] Ibid.

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