E-pharma may have become one of the fastest-growing e-commerce verticals in India over the past few years, but start-ups in this field have been dealt a severe blow this week by the Centre’s decision to suspend sales until regulations can be notified for the sector.
According to government sources, the Drugs Controller General of India has issued an order last week directing all drug regulators across states and Union Territories to take “necessary action” to stop online pharma sales. The order cites a Delhi High Court order last year while hearing a PIL by Zaheer Ahmed, where the court had directed a ban on the unlicensed online sale of medicines until the government drafts rules to regulate e-pharmacies.
Currently, online pharmacies operate in a grey zone without a drug licence since there are no specific regulations framed for the sector.
The petitioner in the case had argued that since there was no mechanism to control the sale of medicines online, this puts the health and lives of people at risk.
He had also noted that the Ministry of Health, Central Drugs Standard Control Organisation and an expert committee appointed by the drug consultative committee have already concluded that online sale of medicines is in contravention of the provisions of Drugs and Cosmetics Act, 1940, and other allied laws.
For their part, e-pharmacies had told the court after Ahmed moved a contempt petition in April that they do not require a license for online sale of drugs and prescription medicines since they do not sell them. Instead, they were only delivering the medications, akin to food delivery apps like Swiggy and Zomato, they argued.
Pradeep Dadha, founder and CEO, Netmeds.com, noted that the said order was then stayed by a Divisional Bench of 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. Since then, we have been operating in a fully compliant manner. We work with only licensed pharmacies and we are committed to adhering to all the guidelines and standards that have been defined for our sector,” he said.
New policy in the works
Industry executives say this would no longer be a problem if the government releases its new regulations for the sector. In September, the Centre had said in an affidavit to the Delhi High Court that it is in the process of finalising the draft rules.
“We want India to come up with a progressive e-pharmacy regulation. This would give a lot of clarity and confidence to the sector… whether it is investors, whether it is our business partners or vendors,” 1mg Technologies Founder and CEO Prashant Tandon told reporters on Tuesday. Pharmeasy co-founder and CEO Dharmil Sheth agrees. “We need more visibility across the supply chain to meet the demand-supply gaps and improve the healthcare outcomes in the country,” Sheth said.
E-pharma sector has a substantial clientele
Industry executives say the e-pharma sector caters to about 50 lakh patients per month across India and employs around 30,000 skilled professionals.