Drug Controller General of India (DCGI) VG Somani’s notice to regulators of all states and Union Territories (UTs) to prohibit sale of medicines through unlicensed online platforms has perturbed the e-pharmacy industry which employs thousands of people. The curbs are to be in place until the government comes up with rules to regulate e-pharmacies in India.
Currently, online pharmacies operate in a regulatory grey area, leading to conflicting court orders. Most e-pharmacies operate in the country without a drug licence as there are no rules framed for the sector.
The DCGI order itself was based on the Delhi High Court order dated December 12, 2018.
“The order which is being referred to, was issued on December 12, 2018 by the Delhi High Court. The Delhi High Court’s order relied on an earlier single judge’s order by the Madras High Court. The said order was then stayed by a Divisional Bench of the Madras High Court. As per the bench, the interim stay will be in place until the Centre notifies statutory rules for online trade of medicines," Pradeep Dadha, Founder and CEO of Netmeds.com, told CNBC-TV18. Netmeds is one of India's leading e-pharmacies.
Dadha added that the order isn't going to impact the operations of Netmeds.
"We have been operating in a fully compliant manner. We work with only licensed pharmacy partners and we are committed to adhering to all the guidelines and standards that have been defined for our sector,” he said.
Prashant Tandon, CEO of 1mg Technologies, said, "We are operating at full compliance with the Drugs and Cosmetics Act. The regulation is going bring better clarity."
Delay in framing e-pharmacy rules
The government had released draft rules on sale of drugs by e-pharmacies in September 2018, with an aim to regulate online sale of medicines across India.
The draft rules make registration of e-pharmacies mandatory while also barring them from selling drugs without valid prescriptions. E-pharmacies are required to maintain details of both patients and practitioners in order to avoid misuse.
The Centre wanted to bring the e-pharmacy regulation into effect within 100 days of coming to power after the 2019 Lok Sabha elections. The draft proposals secured the approval of the Drugs Consultative Committee and the Drugs and Technical Advisory Board. However, the delay in finalising the e-pharmacy regulation is becoming an issue for industry.
Moneycontrol learns that the government is going slow on finalising rules for the industry, due to the opposition from the All India Organisation Of Chemists and Druggists (AIOCD) - the body that represents over 8,50,000 brick and mortar pharmacy stores countrywide.
“We are waiting for the government policy, it will address the regulatory uncertainty the sector is facing," said an executive of another e-pharm company who didn't wish to be named.
Indian retail pharmacy is estimated to be worth $18 billion, and is expected to reach a size of $50 billion by 2025, according to data from the Department for Promotion of Industry and Internal Trade (formerly known as Department of industrial Policy and Promotion).
E-pharmacies currently constitute around 3 percent of the Indian pharmaceutical market and are growing rapidly. There are around 282 e-pharmacy startups in India, including big ones like Netmeds, 1mg, Medlife, Pharmeasy, Sasta Sundar and Myrameds, according to data from start-up tracker Tracxn.
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