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e-Pharmacies Appeal Against Order Banning Online Sales of Medicines

A group of online pharmacy companies in the country today approached the Madras High Court with an appeal against a single judge’s order banning online sales of medicines till the Government of India implement new regulations on the issue. The matter is expected to come up for hearing on Wednesday. Six online pharmacy companies and a platform formed by major pureplay online pharmacies had impleaded in the petition filed by the Tamil Nadu Chemists and Druggists Association (TNCDA) before the single judge. Most of them submitted their appeal today to the division bench against the order, said sources from Digital Health Platform, the organization of Online Pharmacy Companies. “There are around 20,000 people working in this sector, in about 10 online pharmacy firms in the country. Around 1.5 million customers are purchasing medicines online and a ban would impact their lives,” said Dharmil Sheth, co-founder of PharmEasy, a major player in the sector, and a founding member of Digital Health Platform. The companies would be submitting to the Court that they are not violating any rules or regulations under the Act.

There are two types of online pharmacies — one acting as aggregators to connect registered pharmacist with the consumer and the other, with their own registered pharmacists and medicine stocks and sales licenses under the existing regulations. PharmEasy argues that it is an aggregator model that works closely with registered pharmacists who dispense medicine to customers. The industry is also expecting a new set of rules under the Drugs and Cosmetics Amendment Rules, 2018, for online sales of medicine, to be notified soon. Online pharmacy firms such as 1MG Technologies, Netmeds Market Place, 91 Streets Media Technologies, Medlife International and Practo Technologies were impleded in the case before the single judge. On Monday, after hearing the arguments from both the online pharmacies and the trade organization, Justice Pushpa Sathyanarayana passed an order directing the Central Government to notify the rules in the Gazette at the earliest, and not later than January 31, 2019 in the interest of the public and the online drug trade. Thereafter, those who are trading online have to obtain their licenses in the manner prescribed in the rules to be notified, within a period of two months from the date of such notification. “As the draft rules are framed by the Central Government, after deliberations including the stakeholders, till the aforesaid rules are notified, the online traders are bound not to proceed with their online business in drugs and cosmetics,” said the order.

The Court, after the pronouncement, added that the order passed against online sales will not be given effect to till 10.30 am on December 20, allowing time for online pharmacies to appeal, based on their request. TNCDA has been arguing that the prevailing regulation has no provisions for selling medicines online and draft rules for the same are still under consideration. This, it said, shows that the current sale of medicines online is not legal. It argued that as per the existing regulations, prescription drugs can only be sold by a registered pharmacist against prescription and only from the premises for which the license has been issued by the drug regulatory authority. From a market size of USD 12.6 billion in 2009, the Indian pharmaceutical market is expected to grow to USD 55 billion by 2020, with the potential to reach USD 70 billion in an aggressive growth scenario. estimates that the e-pharmacy market potential is worth over a billion dollars with global and domestic industry giants like Amazon and Flipkart, more than 30 startups vying for a piece of the pie. The Indian e-commerce industry is seen growing at a CAGR of over 20 percent, crossing USD 3 billion by 2024. Online prices are 10-20 percent lower than brick-and-mortar prices. – Business Standard