Top e-pharmacy CEOs back Centre’s move to regulate segment

Prashant Tandon, TATA1mg CEO said that due to lack of clarity on different aspects of telemedicine and e-pharmacies, digital health has suffered in India.

Key industry executives have welcomed reports that the Centre is mulling over a proposal to amend the Drugs and Cosmetics Act, 1940, and is looking to regulate the sale and distribution of drugs online. The executives welcomed the move, saying the uncertainty around regulations and the functioning of e-pharmacies was posing challenges to the country’s fundraising ecosystem.

Speaking to Moneycontrol, Prashant Tandon, CEO, TATA1mg, said investors need clarity on how e-pharmacies will operate in future because “uncertainty affects investment sentiments”.

“I feel that for a healthy investment appetite and the investor ecosystem to be active, a clear time-bound regulatory framework is always helpful. If regulation comes, investment will be better because people will know the rules,” said Tandon, who is chair of the IAMAI Health tech committee.

Also read: Why DCGI served a show-cause notice on e-pharmacies

Established in 2004, the Internet and Mobile Association of India (IAMAI) is a not-for-profit industry body representing the digital services industry. It counts over 500 Indian and multinational corporations as members.

His response came after the Union Government proposed to regulate, restrict or ban the online sale or distribution of any drug by notification, in the latest draft of the Drugs, Medical Devices and Cosmetics Bill, 2023, which Moneycontrol has seen.

“The Central Government may, by notification, regulate, restrict or prohibit the sale, stocking, exhibiting or offer for sale or distribution of any drug, by online mode,” it said.

Also read: Govt pharma body calls for banning e-pharmacies, alleges fake prescriptions by ghost doctors

The draft has not yet been cleared by the cabinet but is slated to be tabled in the monsoon session, a Health Ministry official told Moneycontrol.

Speaking on the sidelines of the first edition of the IAMAI Digital Health Summit, 2023, the TATA1mg CEO said that due to lack of clarity on different aspects of telemedicine and e-pharmacies, digital health has suffered in India.

“This gap dissuades many investors and entrepreneurs, who feel that there is too much of an extra burden to prove. It’s already hard enough to build a business and on top of that if you have regulatory and fundraising challenges, then the innovation ecosystem suffers,” he added.

Also read: Prohibition on cards for online pharmacies, health ministry sets the ball rolling for regulation

Concurring with that assessment, a top official from a leading e-pharmacy chain, requesting anonymity, told Moneycontrol that the uncertainty over functioning of e-pharmacies was a challenge from an investment perspective.

“The uncertainty is a dampener. It’s really tough to convince someone to put in money because you don’t know if there is a tomorrow,” he added.

Backing the idea of regulating e-pharmacies and digital healthcare, Alexander Kuruvilla, co-chair, IAMAI HealthTech Committee, also the Chief Health Strategy Officer of Practo, an integrated health services company, said consumer interest has to be prioritised.

“Be it the government or private players, there should be one lens to look at it, to see if the consumer is getting benefited or not. I think e-pharmacies and digital healthcare should be regulated,” Kuruvilla said that in the absence of regulation, the industry had adopted self-governing documents to abide by the law.

Asked if e-pharmacy players were meeting with officials on the Bill, Tandon said the industry has been in touch with the government. “The government has done the stakeholder consultation with us. The ministry and industry have been in touch and that will continue. If the draft bill comes out, we would want to engage with the ministry on this,” he added.

Back story

Online pharmacies have been in the line of fire for allegedly violating the Drugs and Cosmetics Act, 1940 by dispensing medicines online.

The All-India Organisation of Chemists and Druggists (AIOCD), a pan India association of drug retailers, has been at the forefront of protests against online sales, calling for e-pharmacies to be banned for allegedly contravening drug laws.

“These e-pharmacies engage in predatory pricing. The government has to take action against them. We have received complaints that drugs are given to patients without prescription, and that even Schedule H drugs are provided via online mode. It is wrong in every manner and the government has to act on it,” said Rajiv Singhal, General Secretary, AIOCD.

In February, the Drugs Controller General of India (DCGI) served a show cause notice to 20 e-pharmacies, including TATA1mg, Amazon, and Flipkart, for violating India’s drug laws.

“We haven’t heard anything from the DCGI after we responded to the letter,” Tandon said.