Amid huge chaos, the e-pharmacies were established in India. With the upsurge in the Coronavirus pandemic, the government announced a lockdown which made retailers forcefully shut their shops. As a result of which, the e-commerce industry boomed and earned profits. Similarly, the business of e-pharmacies in India increased leaps and bounds. However, the Indian legislations are still at a nascent stage to tackle the problems that might arise out of e-pharmacies.
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In simple terms, e-pharmacies can be defined as a pharmacy that operate over the internet or an online pharmacy, which sells drugs, and medicines, and delivers them to the customer. The customers can buy the medicines after uploading the prescription on the website/app, or if they do not have any such prescription, then e-pharmacies provide a third-party doctor who will call the customer and confirm his/her illnesses and medicinal uses.
Although later the medical stores and other medicinal services were characterized as essentials and allowed to remain open during the Covid-19 lockdown, the e-pharmacies have seen a huge upsurge in demand for medicines vis-à-vis medical stores and others. Considering the same, the article attempts to focus on how these online pharmacies in the future might become a norm in India. It also puts forth what contemporary legislations in India regulate the same. Further, it talks about issues and challenges related to such online pharmacies and attempts to provide a few solutions for the same.
Online Pharmacies: A Norm In The Future?
The Indian pharma sector is dominated by e-pharmacies like PharmEasy, Medlife, Netmeds, 1mg, etc. These pharmacies were the biggest beneficiary after the implementation of the Covid-19 lockdown as people preferred to order medicines online at heavy discount rates from the comfort of their homes instead of going outside and buying them physically. As a result of which, Reliance, Tata, and Amazon entered or are soon going to enter the industry to gain the profit in future. According to the Indian Brand Equity Foundation (IBEF), the Indian online pharma industry would grow in the future at a compound annual growth rate of 22.4 per cent to reach US 55 billion dollars by 2020.
Amazon might invest nearly 100 million dollars in Apollo pharmacy which is India’s largest branded pharmacy chain. Moreover, earlier in 2020, Reliance acquired a major stake in Chennai-based ‘Netmeds’ for 620 crores, while the Tata group is in talks with 1mg to acquire a majority stake. PharmEasy, backed by Singapore Temasek Holdings, LGT Group, and the Canadian pension fund CDPQ, acquired a smaller rival Medlife, in August 2020. Various other foreign investors are also pondering acquiring the major stakes in various online pharmacies in India. These funding deals come after medicine sales through e-pharmacies doubled in the first few months of the lockdown. According to a FICCI report, online pharmacies had over three million users before the pandemic, but more than 6 million new customers have been added since then.
The government launched Janaushadhi Kendras to ensure that underprivileged strata, as well as other general populations in the country, have access to quality medicine at a cheap price. This program with the Digital India program will make Janaushadhi Kendras easily accessible through a website or app on mobile phones. Thus, such an upsurge in foreign as well as national investments and welfare schemes of the government in online pharmacies clearly shows that they contain a huge potential, and in the future, might become a norm in society.
E-pharmacies Regulation And Challenges
In the USA and Europe, online pharmacies are flourishing and are a structured medical service industry. However, in India, there is no such legislation that explicitly regulates such industries. In India, there is legislation to regulate the medical industry such as the Drugs and Cosmetics Act, 1940 (D&C Act), Pharmacy Act, 1948, Drugs and Cosmetics Rules, 1945 (D&C Rule), Drugs and Magic Remedies (Objectionable Advertisement) Act, 1954, Narcotic Drug and Psychotropic Substances Act, 1985 (NDPS Act), Indian Medical Council Act, 1956, Information Technology Act, 2000 (IT Act), and Code of Medical Ethics Regulations, 2002. However, these decades-old legislations are not adequate enough to regulate the e-pharmacies.
However, the Government of India 2018 floated a draft regulation for e-pharmacies, which never saw the light of the day. As per those draft regulations, “e-pharmacy” means a business of distribution or sale, stock, exhibit, or offer for sale of drugs through a web portal or any other electronic mode. Furthermore, as per the rules, the e-pharmacies are required to register themselves to a Central Licensing Authority to get a license to distribute or sell, stock, exhibit, or offer for sale of drugs through e-pharmacy. The rules also specified application procedure, conditions that need to be fulfilled to obtain the license, rules regarding validity and renewal of registration, and complaint redressal mechanisms in case of any supply of a non-standard quality or adulterated or misbranded or spurious drug through e-pharmacy.
As specified above, these rules are still pending, the online pharmacies, due to the absence of clear regulations, work as a marketplace that provides a patient platform to order the medicines from sellers that adhere to the Drugs and Cosmetics Act and Rules of India. The draft falls short in addressing the issue of what would be the guidelines that need to be adhered to by e-pharmacies relating to their operation as a marketplace.
However, the draft also addresses the issue related to the privacy of the patient buying medicine at e-pharmacies. E-pharmacy requires a medical prescription to be uploaded on their website/app, or if the person does not have any such prescription, then they provide a third-party doctor that confirms the illness/es and further confirms the order by making a prescription. Thus, online pharmacies might use this prescription for their own benefit, or in case of leakage of data from these platforms, it might create a major issue for the person concerned. The draft addressing this issue states that non-disclosure and confidentiality regarding the information procured from the consumer should be maintained by the e-pharmacies, except in the case of public health required by the Central or State governments.
Further, another challenge is the standardization of the verification process as patients mostly attach the screenshots of the prescriptions when they make an order. The prescription needs to be verified by the concerned doctor lest it might provide harmful medicines or drugs written in the prescription (that can be fake) that might be used in some illegal and unlawful activities. On the other hand, when there is no prescription, the third-party doctor calls the patient, and the questionnaire from the side of the doctor should be extensive so that the person concerned might not state misleading information and obtain the drugs.
The Central government has to consider the issue seriously and pass adequate rules or legislation as soon as possible as the sector of e-pharmacy is developing day by day at a rapid pace that might pose an unprecedented threat in near future. The government should address the issues and challenges that are not covered by the draft rules to regulate the market. Further, decades-old regulations such as the D & C Act might be inadequate in dealing with the challenges posed by e-pharmacies. Thus, there is a need for a fresh regulation mechanism for e-pharmacies or reconsideration of such legislation.
Other challenges, regardless of the issues in draft rules, can be a lack of technical infrastructure. E-pharmacies need a strong technical infrastructure for their smooth functioning. Even though cheap data rates and smartphones are increasing the accessibility of Indians to e-pharmacies, the rural population remains largely out of reach and unaware of such developments. Government initiatives like Janaushadhi Kendras that are rapidly shifting to the online medium and that are formulated for the benefit of underprivileged and poor individuals might also remain out of reach of the rural population. Expansion of online payment mechanisms and banks across the country was a positive and much-appreciated effort, but more programs are required to ensure the safe onboarding of the rural population on the e-commerce bandwagon.
Thus, the central, as well as state government, should disseminate the information through media channels or various such methods so that the rural population might not remain ostracized from such developments and can take the benefit from them. E-pharmacies carry a huge potential that would surely become a major industry in the near future as per the estimates stated above. Thus, there is a need that the benefits not only to remain reserved for the privileged class but for each individual in the society.
- “Pharmaceutical Exports from India” Indian Brand Equity Foundation (IBEF), available at: https://www.ibef.org/exports/pharmaceutical-exports-from-india.aspx (Last Visited on May 13, 2021).
- Navneet Maji, “E-Pharmacy: The Growth Story of 2020” Businessworld, December 12, 2020.
- Biswaroop Gooptu, “PharmEasy in Investment talks with Naspers, TPG” The Economic Times, October 15, 2020.
- “2020 Year in Review| How Covid-19 is reshaping online pharmacy in India” The Economic Times, December 29, 2020.
- Bureau of Pharma PSUs in India (BPPI), Pradhan Mantri Bharatiya Janaushadhi Pariyojana (PMBJP), Department of Pharmaceuticals, Government of India, available at: http://janaushadhi.gov.in/aboutbppi.aspx (Last Visited on May 13, 2021).
- The Drugs and Cosmetics Act, 1940 (Act 23 of 1940).
- The Pharmacy Act, 1948 (Act 8 of 1948).
- The Drugs and Cosmetics Rules, 1945 (as Amended up to August 15, 2013).
- The Drugs and Magic Remedies (Objectionable Advertisements) Act, 1954 (Act 21 of 1954).
- The Narcotic Drugs and Psychotropic Substances Act, 1985 (Act 61 of 1985).
- The Indian Medical Council Act, 1956 (Act 102 of 1956).
- The Information Technology Act, 2000 (Act 21 of 2000).
- The Code of Medical Ethics Regulation, 2002 (as Amended up to October 8, 2016).
- Pranav Mukul, Prabha Raghavan, “Explained: How India’s online pharmacy market is regulated” The Indian Express, August 21, 2020.
- The Drugs and Cosmetics (____ Amendment ) Rules, 2018 (Draft Rules).
BY KAUSTUBH KUMAR | NATIONAL UNIVERSITY OF STUDY AND RESEARCH IN LAW, RANCHI