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E-Pharmacies-Regulations in India

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E-Pharmacies-Regulations in India

December 1, 2020

I. INTRODUCTION:

An online pharmacy or rather we call it as E-Pharmacy is an internet-based vendor that sells medicines online, i.e., it operates over the internet and sends the orders to customers through mail, courier or delivery persons. These contemporary times are witnessing a huge surge in E-commerce, including the sale of prescription and non-prescription medicines. The concept of online pharmacies and online sale of medicines has been in vogue worldwide since years. Various laws such as the Information Technology Act, 2000; the Drug and Cosmetics Act, 1940; Drugs and Cosmetic Rules, 1945; Pharmacy Act, 1948; and the Indian Medical Act, 1956, govern the online pharmacies in India. Many of these, including the Drugs and Magic Remedies Act, under which drug advertisements are regulated, were written when use of computers and the internet was not as prevalent as it is now.

Online pharmacies offer better pricing than offline stores, with increased access, lower transaction and product costs, convenience and greater anonymity for consumers. They offer accessibility to people with limited mobility and people in remote areas. These provide medialerts (personalized medicine reminder service), discounts, doorstep delivery within a short time, and validation of prescription through licensed pharmacists.

II. REGULATIONS ON E-PHARMACIES:

At present, the main legislation governing the manufacture, sale and distribution of drugs and cosmetics in India is the Drugs and Cosmetics Act, 1940 (“D&C Act”), read with the Drugs and Cosmetics Rules, 1945 (“D&C Rules”) (collectively, the “D&C Act and Rules”), and the Pharmacy Act, 1948. The D&C Act and Rules contain several provisions to ensure the quality and standard of the drugs. Significantly, no person can manufacture for sale or distribution, sell, distribute, or stock, exhibit or offer for sale (i) any drug other than under and in accordance with the conditions of an issued licence[1], and / or (ii) any drug which is adulterated, misbranded or spurious, or is not of a standard quality.[2] Contravention of the aforesaid provisions can lead to imposition of penalty, in the form of monetary fine and imprisonment.[3] Specifically, the drugs specified in Schedule H, Schedule H1 or Schedule X of the D&C Rules can be sold by retail only on production of and in accordance with a prescription of a registered medical practitioner.[4] In addition, only a registered pharmacist can dispense any medicine on the prescription of a medical practitioner.[5]

The deficiency of specific rules and regulations does not explain the continued operation (and recognition) of entities engaged in the online sale and distribution of medicines either. This can be explained on reading the notice issued to the state and union territory drug controllers by the Office of Drugs Controller General in December 2015[6], which stated that the provisions of the D&C Rules would be applicable even in the online sale of drugs and that the provisions of the said rules need to be complied in both online and offline sale of drugs. Essentially, the notice paved way for the issuance of licences for e-pharmacies as well. Certain e-pharmacies have adopted an inventory model, wherein they stock their own medicines and then sell it to customers. On the other hand, other e-pharmacies have adopted a marketplace model; such e-pharmacies qualify as ‘intermediaries’ under Section 2(1)(w) of the Information Technology Act, 2000 (“IT Act”), for they facilitate the online sale and delivery of drugs from the physical registered pharmacies they have a tie-up with.

In 2018, the Ministry of Health and Family Welfare vide its notification G.S.R. 817 (E) dated August 28, 2018[7] came out with a draft to amend the Drugs and Cosmetics Rules, 1945 (“Rules”). The Rules propose to incorporate a chapter on ‘sale of drugs by E-Pharmacy’[8]. Under the draft Rules, the term ‘e-pharmacy’ has been for the first time introduced to define it as the business of distribution or sale, stock, exhibit or offer for sale of drugs through a web portal or any other electronic mode[9]. Further, the terms ‘e-pharmacy portal’ has been defined as a web or electronic portal or any other electronic mode established and maintained by the e-pharmacy registration holder to conduct business of e-pharmacy[10] and ‘sale by way of e-pharmacy’ has been defined as a sale whether to a hospital, or dispensary, or a medical, educational or research institute or to any other person through e-pharmacy by way of retail sale[11].

In addition, provisions for application for registration and its validity; conditions for registration imposed on the e-pharmacy like location, disclosure of information, procedure for distribution and sale etc. were provided. Certain restrictions are imposed on the e-pharmacy which include the prohibition of advertisement of any drugs on radio, television, internet, print or any other media for any purpose; and restriction on dealing in narcotic and psychotropic drugs as defined under the Narcotic Drugs and Psychotropic Substances Act, 1985, tranquilizers and the drugs specified in the Schedule X of the Rules. Additionally, monitoring of e-pharmacy, complaint redressal mechanism has been introduced which provides the rights to file a complaint to the state drugs controller (the “Drugs Controller”) for any suspicion of supply of non-standard quality, adulterated or misbranded drugs through the e-pharmacy besides the Consumer Protection Act, 1986.

In addition to the above, the provisions of the IT Act along with its rules as well as The Consumer Protection (E-Commerce) Rules, 2020 (“E-Commerce Rules”) is also applicable to e-pharmacies and its portal. The IT Act and it’s rules lay down provisions and requirements to run a web-portal, whereas, the E-Commerce Rules has provided a well detailed obligations[12] of an e-commerce entity[13] or marketplace e-commerce entity[14], which are required to be complied with and the information that is mandatorily required to be disclosed in the portal.

III. PRESENT STATUS:

The Hon’ble High Court of Delhi and Madras had been approached through various petitions praying to ban on e-pharmacy operations on grounds of public safety. Both the Hon’ble Courts favoured banning the online sale of drugs and medicines, where the Hon’ble High Court of Madras went ahead requesting the government to implement new rules to govern the online sale of drugs. Further, in an official letter dated November 28, 2019, the Drugs Controller General of India (DCGI) issued a notification to all drug Controllers to enforce an order given by Delhi High Court in December 2018 in the case of Zaheer Ahmed v. Union of India[15] which prohibited the online sales of medicines without a valid license.

Although the Government of India has framed the draft Rules to amend the D&C Rules, the same has not been notified yet and therefore, awaits enforcement.

IV. PERILS OF E-PHARMACY:

1. Eradication of illegal e-pharmacies:

As mentioned above, the draft Rules define E-pharmacy as the “distribution or sale, stock, exhibit or offer for sale of drugs through a web portal or any other electronic mode”. This means only those e-pharmacies that are registered with the Central Licensing Authority (“CLA”) are allowed to operate. The draft Rules are a step in the right direction but they are not sufficient to deal with the complexities involved in functioning of online pharmacies. The countries world-wide are struggling with the issue of eliminating illegal online pharmacies as these pharmacies provide sub-standard or banned medicines to customers in unregulated quantities, without proper prescription. It is extremely difficult to identify such websites and impose liability as they operate in a clandestine manner. Further, the draft Rules only provide for periodic inspection of the already registered pharmacies and cancellation of license if regulations are not followed. The draft Rules neither provide a mechanism to deal with illegitimate websites nor do they impose any liability on such websites. The policy makers must establish a dedicated agency or empower the Drugs Controller General of India to, firstly, identify and block illegal websites selling medicines and, secondly, generate consumer awareness among citizens. A clause imposing liability in the form of a fine or penal prosecution must also be included in the draft rules to deter the presence of illegal pharmacies.

2. Restriction on fake/illegitimate prescriptions:

The draft Rules describe a prescription as an instruction from a registered medical practitioner, which is either handwritten or in electronic mode and is duly signed by the afore-mentioned practitioner. Although E-prescription has been mentioned in the draft Rules, the issue has not been dealt with comprehensively by the policymakers. The draft Rules focus on the responsibility of online pharmacies to verify the validity of prescriptions. Such an approach is not entirely effective and there should be a liability on consumers as well to not provide fake prescriptions or use the same prescription repeatedly either on the same website or different websites.

3. Provisions on lifestyle drugs:

As discussed above, along with pros and cons of the draft Rules, another issue which is un-recognized under the draft Rules is with regard to regulating the lifestyle drugs. We understand that there are many people who have issues such as smoking, drinking alcohol, over-eating, hair loss, etc. All thanks to science, new medicines have come up in the market which claim weight loss, hair growth, reduce the urge of smoking, drinking and over-eating, and to assist in better lifestyle. These drugs, commonly termed as lifestyle drugs, do not fall within the ambit of controlled substances and in most cases, are available without providing a prescription. Although lifestyle drugs do not lead to addiction, they can still be dangerous for individuals with other health issues and therefore, regulations are needed to ensure safe and secure selling of these medications.

V. CONCLUSION:

Now, as digitalization is booming and so is E-Health services[16] across the globe and as a part of post effect of Covid-19, the need for e-pharmacy is in rise and demand. It may be expected that the Government would soon amend the D&C Rules and enforce the Rules framed in 2018, which would dissolve any ambiguity with regard to the operations of e-pharmacy.

Author: Abhishek Gupta, Associate.

Disclaimer: The content of this article is intended to provide a general guide to the subject matter. For any queries, the author can be reached at abishek@samistilegal.in.

[1] Section 18(a), Drugs and Cosmetics Act, 1940

[2] Section 18(c), Drugs and Cosmetics Act, 1940

[3] Section 27, Drugs and Cosmetics Act, 1940

[4] Rule 65(9), Drugs and Cosmetics Rules, 1945

[5] Section 42(1), Pharmacy Act, 1948.

[6] No.7-5/2015/Misc/e-Governance/091, Office of Drugs Controller General (India), 30 December 2015

[7] http://egazette.nic.in/WriteReadData/2018/189043.pdf

[8] Part VIB of the Rules

[9] Rule 67-I (a) of the Rules

[10] Rules 67-I (b) of the Rules

[11] Rules 67-I (e) of the Rules

[12] Rule 4 and 5 of E-Commerce Rules

[13] Rule 3 (b) of E-Commerce Rules: E-Commerce Entity means any person who owns, operates or manages digital or electronic facility or platform for electronic commerce, but does not include a seller offering his goods or services for sale on a marketplace e-commerce entity;

[14] Rule 3 (g) of E-Commerce Rules: Marketplace E-Commerce Entity means an e-commerce entity which provides an information technology platform on a digital or electronic network to facilitate transactions between buyers and sellers;

[15] W.P.(C) 11711/2018

[16] https://samistilegal.in/e-health-laws-and-regulations/

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