The months of April and May saw an upsurge of activism by the Food and Drug Administration Authority (FDA) when it cracked the whip on several online pharmacies that were operating in the State of Maharashtra without prescribed licenses. They were involved in the sale of restricted drugs without following a process prescription verification. Through 27 raids the FDA of the State of Maharashtra seized drugs worth Rs2 crore and identified multiple online pharmacies rampantly trading in prescription drugs, illegally. In May, the FDA took a well-known e-commerce company to task, along with its promoters, for the sale of restricted drugs without prescription and for violation of various norms prescribed under the Drugs and Cosmetics Act, 1940 (the Drugs Act).
Given India’s steady rise in the e-commerce domain, several companies in the healthcare sector, with a view to connect pharmacists and consumers through a simplified platform, have set up online pharmacies. The top players in India’s online pharmacy market include names such as 1mg.com, medplusmart.com and medidart.com. Unfortunately, with the authorities coming down heavily on entities engaged in the online pharmacy domain for violating provisions of the Drugs Act and owing to the ambiguity arising out of the absence of a dedicated law as on date, companies engaging in the business of online pharmacies have been looking at a grim future.
The Drugs Act
The primary legislation that governs the sale of drugs in India is the Drugs Act. The Act, with prescribed rules and regulations, has strict guidelines pertaining the sale of drugs categorised under ‘Schedule H’ or ‘Schedule X’. As per the extant provisions of the Drugs Act, drugs under ‘Schedule H’ or ‘Schedule X’ can be sold only on prescription, and pharmacists who sell such drugs are required to comply with numerous requirements such as obtaining prescribed licenses, maintaining registers and following labelling and packaging guidelines. The Drugs Act, enacted way back in the year 1940, has since seen limited amendments and has not been harmonised to include guidelines to meet the demanding developments in the field of science and technology. This makes interpreting the Drugs Act highly ambiguous, while dealing with a sector as new as e-pharmacies.
The challenge of e-nabling pharmacies
Taking the healthcare industry to the e-space would require ensuring compliance with the provisions of the Information Technology Act, 2000 (the “IT Act”) along with the rules and regulations prescribed thereunder. The IT Act classifies a person’s medical records as ‘sensitive personal information’. An entity that collects such information is placed under the obligation to protect the privacy of a person disclosing such information. Such an entity is required to comply with all reasonable security practices, including the encryption of the data received and adoption of adequate privacy policies. It may be noted that noncompliance with the provisions of both the Drugs Act as well as the IT Act may attract pecuniary and penal consequences, and in certain cases, both.
New channel, new rules?
Despite the lucrativeness that the healthcare industry has seen in India, online sales of prescribed medication have been frequently open to abuse. Given the rise in the number of cases relating to the sale of restricted drugs online and the lack of legislation governing such transactions, the Drug Controller of India (the DGCI) has, in the month of May (2015), proposed an extensive study of existing regulations to come up with comprehensive guidelines to govern the sale of drugs through the internet.
Looking at the vastness of the task that lies ahead of the DGCI, any new regulations governing the sale of drugs on the internet appears to look like a double-edged sword. While only time can tell us what lies ahead, one needs to see if any new law regularising online pharmacies successfully manages to distinguish between the sale of over-the-counter drugs and prescription drugs. If such a distinction has been successfully carved out, retail pharmacies would definitely continue to have the edge over the sale of prescription drugs, and this would deter online pharmacies from taking advantage of the loopholes evident in existing laws.
Disclaimer: The views of the authors are personal, and should not be considered as those of the firm.
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