Speed the best prescription for regulating e-pharmacies in India

By Essenese Obhan, Charul Yadav and Sapna Sharma, Obhan & Associates

It began with the large-scale supply of books. Now, with deep internet penetration and widespread digital access, most things can be bought online. Medicines and e-pharmacies are the latest area of e-commerce interest. E-pharmacies allow customers to buy medicines online; over-the-counter drugs can be bought directly, but pharmacopoeia drugs require a prescription. The regulation of e-pharmacies, however, is in a state of uncertainty. The drugs controller general of India issued show-cause notices as recently as February 2023 to 20 e-pharmacies over online drugs sales.

There is yet no formal regulatory distinction between bricks-and-mortar pharmacies and e-pharmacies, with the term e-pharmacy appearing nowhere in the law. But e-pharmacies have been under scrutiny for almost a decade.

Essenese Obhan
Essenese Obhan
Managing partner
Obhan & Associates

In December 2015, a drug consultation committee (DCC) set out a roadmap for an e-pharmacy regulatory framework. A DCC subcommittee, after examining online medicine sales and public health effects, advised scrutiny of such sales. In August 2018, draft e-pharmacy rules, the Drugs and Cosmetics (Amendment) Rules, 2018) were issued, but not yet in force.

In December 2018, the Delhi High Court forbade online medicine sales without a licence. The court issued an all-India ban on e-pharmacies, directing the government to bring in regulations. The Madras High Court similarly banned online sales, but this was suspended by an appellate bench, effectively permitting e-pharmacies to reopen.

Judicial ambivalence may exist because there is no clear demarcation between online and offline pharmacies under existing law. For example, while the Drugs and Cosmetics Rules, 1945 and the Pharmacy Act, 1948 prohibit anyone who is not a registered pharmacist from compounding, preparing, mixing, or dispensing prescribed medicines, such activities cannot always be enforced against e-pharmacies. Prescriptions, presently required to be uploaded, can always be manipulated and misused. Concerns exist around the interstate sale of drugs, as individual state laws may vary. Such concerns involve data privacy, misuse of drugs and self-medication.

Charul Yadav
Charul Yadav
Obhan & Associates

As in other areas, the regulatory regime for drugs has not managed to keep up with the changing needs or demands of manufacturers, businesses and consumers. The law does not recognise e-pharmacies, with their attendant risks, such as fake storefronts and counterfeit drugs. Even less does the law recognise the opportunities e-pharmacies bring, such as improved access to healthcare.

In July 2022, the government promulgated the Drug, Medical Devices and Cosmetics Bill, 2022 (bill), which, besides empowering the government to regulate e-pharmacies, provides that “No person shall sell, or stock or exhibit or offer for sale, or distribute, any drug by online mode except … as may be prescribed”.

In June 2022, the 172nd report of the Department Related Parliamentary Standing Committee on Commerce (DRPSC) had stated that it was “appalled” that the e-pharmacy rules had not yet been finalised. Among other things, it noted that undue delays in adopting a definitive regulatory framework resulted in uncertainty, a situation not conducive to fast-paced digital markets.

Sapna Sharma
Sapna Sharma
Senior associate
Obhan & Associates

In March 2023, the DRPSC summarised the reactions to its earlier report, mainly based on stakeholder comments. Chemists’ and druggists’ associations were opposed for fear 800,000 chemists would be undercut by e-pharmacies on price and go out of business. Also, unlike e-pharmacies, physical pharmacies were not allowed to home-deliver. Some stakeholders suggested permitting only e-prescriptions to avoid multiple dispensing, and banning the sale of habit-forming drugs. Others submitted that selling restricted drugs without proper prescriptions could lead to price manipulation and adversely affect the availability of life-saving pharmaceuticals.

Reports suggest that the bill has been revised to address concerns of data privacy and misuse of prescription drugs and has been sent for inter-ministerial consultation. Given the surge in their numbers, growing investor interest and burgeoning customer demand, e-pharmacies are here to stay. However, as their growth has large-scale implications for access to healthcare and public health in general, a robust framework must be built, sooner rather than later, to effectively regulate such e-pharmacies.

Essenese Obhan is the managing partner, Charul Yadav is a partner and Sapna Sharma is a senior associate at Obhan & Associates.

Obhan & Associates

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