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Health Ministry issued draft rules on sale of drugs by e-pharmacy

  • Published | 23 October 2018
The draft rules on "sale of drugs by e-pharmacy" implies that no person will distribute or sell, stock, exhibit or offer for sale of drugs through e-pharmacy portal unless registered.  
India: The Union Health Ministry has issued draft rules on sale of drugs by e-pharmacies with an objective to regulate online sale of medicines across India and offer patients accessibility to genuine drugs from authentic online portals. The draft rules on "sale of drugs by e-pharmacy" implies that no person will distribute or sell, stock, exhibit or offer for sale of drugs through e-pharmacy portal unless registered. This rules and regulations will accelerate the growth of e-pharma industry in the years to come with a positive impact on the whole healthcare industry in the long run. “Any person who intends to conduct business of e-pharmacy shall apply for the grant of registration to the Central Licensing Authority in Form 18AA through the online portal of the Central Government," the draft notification said. It also says the application of registration of e-pharmacy will have to be accompanied by a sum of Rs 50,000 while proclaiming that an e-pharmacy registration holder will have to comply with provisions of Information Technology Act, 2000 (21 of 2000). The supply of any drug shall be made against a cash or credit memo generated through the e-pharmacy portal and such memos shall be maintained by the e-pharmacy registration holder as record. Particularizing on the main highlights of the draft, the Drugs Controller General of India, Eswara Reddy said rules have been proposed to ensure accessibility and availability of drugs to the people across India. "After the rules are finalised, people will be able to get genuine drugs through these online pharmacies. These pharmacies will be purchasing directly from the drug manufacturer, so they will also be able to give 20-30 per cent discounts, thus benefiting the patients," He pointed out that under the rules it has been proposed that those who want to do online pharmacy will have to register with the Central Drugs Standard Control Organization (CDSCO), the country's apex drug regulator and central licensing authority. "Now those who want to operate e-pharmacies, only need to take one licence in any state. They can sell drugs all over the country even if they have one licence," Reddy said. However, a sale of tranquillisers, psychotropic drugs, narcotics, and habit-forming drugs have been prohibited through these portals. "The premises from where the e-pharmacy business is conducted shall be inspected, every two years, by a team of officers authorised by the Central Licensing Authority, with or without the experts in the relevant field or the officers authorised by the concerned State Licensing Authority," the draft rules. Reddy said it will be binding on the e-pharmacies to deliver the drugs in the specific time that will be communicated to the patient during the time of purchase while the e-portals are mandatorily required to have 24/7 call centres. The registration issued to any person for e-pharmacy will remain valid for a period three years from the date of its issuance and a renewal of registration will have to be done in case it wants to continue. "No e-pharmacy shall advertise any drug on radio or television or internet or print or any other media for any purpose," the draft said, adding that there are provisions of suspension and cancellation of registration of the e-portal if the latter contravenes any provision of the Drugs and Cosmetics Act, 1940. According to BlueWeave Consulting, the e-commerce sector has grown exponentially over the last decade and has revolutionised the interplay between internet and commerce worldwide. The increasing penetration of internet and mobile phones coupled with the inherent convenience to indulge in retail activities online, indicates that this sector is not only insistently expanding in developed countries but is also contagiously spreading to developing geographies and markets as well. India is not aloof from this unprecedented growth story. The Indian e-commerce industry is estimated to grow at a CAGR of 34% till 2020 and is anticipated to be worth USD 119 billion by 2020. Interestingly, this sector attracts larger revenue contribution from Tier I, II and III cities in India vis-à-vis the eight metro cities; with southern India leading with the majority share of the entire Indian e-commerce market. Nevertheless, the sensitive nature of the pharmacy business and the overwhelming layers of the compliance obligations engulf the several facets of the sale and storage of pharmaceutical products. The upsurge of E-pharmacy activities in India has been seen with doubt by the local regulatory authorities and therefore has been surrounded by controversies. However, many of these controversies and the ensuing regulatory interference have curtailed from many public health concerns, like, increased risk of self-medication by the patients including drug misuse and addiction, sale of counterfeit/substandard medicines without any accountability and poor storage conditions in complete disregard of the applicable laws and regulations. Hence, this new government rule explores the legal challenges that consume the E-pharmacy business including the reforms that are required in the existing compliance framework to ensure proper regulatory supervision and control of this e-commerce venture going forward in the foreseeable future.