Regulating online sale of drugs in India

In News

• All-India Organisation of Chemists and Druggists threatens a country-wide agitation against e-pharmacies.

About

• Recently, the Ministry of Health has pulled up at least 20 companies including Tata-1mg, Flipkart, Apollo, PharmEasy, Amazon and Reliance Netmeds, by issuing them a show cause notice, for selling medicines online.
• The Indian pharmaceuticals market is the third largest in terms of volume and 13th largest in terms of value, globally. 
• The growth in this space will be primarily driven by the high burden of disease, good economic growth leading to higher disposable income, improvements in healthcare infrastructure & improved healthcare financing, to name a few. 
• India is expected to be among the top three pharmaceutical markets by incremental growth and the sixth largest market globally in absolute size in the coming years. 
• Stakeholders in government have often argued that banning e-pharmacies would not be a viable option as the demand for online delivery of drugs is burgeoning and instead of banning businesses, the sector should be regulated.
• In an ecosystem that is moving towards a hybrid mode, all eyes are on the Ministry of Health which will have to effectively regulate the new way of doing e-commerce in the drug space.

E-Pharmacy

• E-pharmacy, or online pharmacy, refers to a platform that allows customers to purchase medicines and other healthcare products online.
• E-pharmacies operate through websites or mobile apps where users can upload their prescriptions, select the products they need, and place orders.
• The products are then delivered to the customers’ doorstep leading to such mode becoming increasingly popular due to their convenience, accessibility, and cost-effectiveness.
• However, they also pose regulatory challenges and concerns related to the safety, authenticity, and quality of medicines sold online.

Draft e-pharmacy rules

• The draft e-pharmacy rules were introduced in 2018, and were intended to whip e-pharmacy businesses into shape, but were shoved into cold storage.
• E-pharmacies made a bang in the market in 2015 by offering hefty discounts on medicines and calling themselves facilitators of doorstep delivery.
• However, companies like PharmEasy are building a supply chain from the ground up by buying out big and small wholesale drug distributors.
• Since 2015, e-pharmacies have recorded losses year-on-year. Tata-1 Mg posted a loss of ?146 crore in FY22, whereas PharmEasy’s losses widened to ?2,700 crore in the same fiscal. 
• Both e-pharmacies and offline retail pharmacists have realized that it is futile to stick to any one way of doing business.

Importance

• E-pharmacies are a part of the government’s intent to build digital infrastructure as a key pillar driving India’s long-term growth strategy.
• The potential of India’s over $344 million e-pharmacy market is promising and is expected to grow at an enviable 40-45% owing to its surging internet connectivity, mobile phone penetration, government initiatives, and rising investments.
• E-pharmacies can provide access to affordable and genuine medicines, especially in areas where traditional pharmacies may not be accessible.

Challenges

• Indian regulations don’t allow the supply of prescription medicines by unregistered pharmacies.
  • E-pharmacies have been accused of operating in the shadows and undertaking unlicensed drug and medicine sales.
• Even if pharmacies are registered with the central drugs regulator CDSCO, they need permits from state regulators for sales and distribution.
  • Online pharmacies fulfill orders from registered and licensed offline pharmacies, but they are often operating without necessary permits.

Laws regulating e-pharmacies

• The Drugs Controller General of India (DCGI) first banned the online sale of medicines in 2015.
• The latest draft New Drugs, Medical Devices, and Cosmetics Bill, 2022, has comprehensive provisions including:
  • Periodic inspections, complaint redressal mechanisms, monitoring e-pharmacies, and others.
• Indian regulations require that pharmacies, both online and offline, be registered with the central drugs regulator CDSCO and have permits from state regulators for sales and distribution.
• Previously, the Federation of Indian Chambers of Commerce and Industry developed a self-regulation code for e-pharmacies in 2016.

Way ahead

• The issue of regulating e-pharmacies in India is a complex one, with challenges related to the safety of medicines and drugs, the dominance of foreign investors, and the concerns of local retailers. 
• However, with the right laws and regulations in place, the potential of the e-pharmacy market in India can be harnessed, contributing to the growth of the digital infrastructure and long-term economic growth. 
• It is crucial for the government and stakeholders to work together towards ensuring that e-pharmacies operate efficiently and legitimately, while protecting the health and safety of the public.

Source: TH