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Regulating online sale of drugs

  • Published
    1st Mar, 2023
Context

Recently, the Ministry of Health has asked the pharma giants to ban the sale of online drugs/medicines, after the All India Organisation of Chemists and Druggists (AIOCD), a powerful lobby of over 12 lakh pharmacists, threatened to launch a country-wide agitation against the government.

About

About the e-pharmacy culture in India:

  • In the past eight years, the market penetration of e-pharmacies has seen single-digit growth from 3% to 5%.
  • The concept of e-pharmacy has boomed during the COVID times when medicines were needed at doorsteps.

After, these e-pharmacies gave competition to retail and physical stores, the Ministry of Health in early February 2023 pulled up at least twenty companies including Tata-1mg, Flipkart, Apollo, PharmEasy, Amazon and Reliance Netmeds, by issuing them a show cause notice, for selling medicines online.

Prospects and Benefits of E-pharmacy:

  • Economic Potential: At present, e-Pharmacy is at its nascent stage in India, but like other e-commerce categories, it has the potential to be a very large industry segment in the near future.
  • According to the Federation of Indian Chambers of Commerce and Industry (FICCI), the online pharmacy model could account for 5-15% of the total pharma sales in India.
  • The major factors driving the growth of the sector are a large population with unmet medical needs, increasing internet penetration in both urban and rural areas and changing consumer needs.

Benefits to consumers:

  • Increased Convenience: E-pharmacy enables consumers to order medicines in a convenient manner, from their mobile or computer.
  • Increased Access: Online platforms can aggregate supplies, making otherwise hard-to-find medicines available to consumers across India. Further, e-Pharmacies also enable access to rural areas where there is a limited presence of retail pharmacies.
  • Improved drug information and patient Awareness: E-pharmacies have the technology infrastructure to provide value-added information to consumers, such as drug interactions, side effects, medicine reminders, and information on cheaper substitutes
  • Affordability: The e-pharmacy model reduces working capital, overhead costs, and trade margins for pharmacists. This finally translates into a cost advantage for consumers.

Issues with E-pharmacies in India:

  • Regulatory issues: Medicines come under the purview of the Drugs and Cosmetics Act, of 1940. However, the current Drugs and Cosmetics Act, of 1940 doesn’t explicitly deal with e-pharmacies.
    • Thus, there is no clear-cut guidelines to regulate, control and monitor e-pharmacies in India.
  • Promotion of self-medication: There are concerns that e-pharmacies will encourage self-medication or irrational use of medicines which is already a common practice in India
  • Misuse:
    • Prescriptions submitted to e-pharmacies may be fake, and it could be difficult to verify their authenticity.
    • There are concerns that scheduled drugs can be reordered and misused by consumers leading to drug abuse and other criminal activities.
  • Fake/Illegal sites and substandard medicines: There are concerns over fake or illegal sites coming up thus undermining consumer interest. Further, there are concerns over substandard and counterfeit drugs being sold.
  • Effect on retail sellers: The growth of e-pharmacies has given rise to concerns among retail sellers that their business would be adversely affected as they would not be able to compete with the discounted pricing provided by online platforms.
  • Privacy issues: There are medical privacy concerns associated with the online transactions of drugs as the patient's medical history could be leaked.

Draft rules for E-pharmacy 2018:

  • Definition of E-pharmacy: “business of distribution or sale, stock, exhibit or offer for sale of drugs through a web portal or any other electronic mode”
  • Mandatory Registration: The draft rules make it mandatory for e-pharmacy businesses to register with the Central Licensing Authority
  • Data Localization: It mandates e-pharmacy portals to be established in India through which they are conducting their business and the data generated has to be kept localised.
  • Privacy: It states that the details of the patient should be kept confidential and not to be disclosed to any third party except the central government or the state government concerned.
  • Prescriptions: For carrying out the sale of prescription drugs (i.e. drugs listed under Schedule H, H1 of the Drugs and Cosmetic Rules) a prescription by a Registered Medical Practitioner has to be uploaded by the customer.
  • Prohibition on sale of certain drugs: The sale of drugs covered by the Narcotic Drugs and Psychotropic Substances Act, 1985, tranquillizers and drugs listed under Schedule X has been prohibited.

Note: Schedule X drugs include narcotics and psychotropic substances.

  • Prohibition on Advertisement: Advertisement of drugs is prohibited on any media for any purpose by an e-pharmacy.
  • Compliance with the IT Act: E-pharmacies have to comply with the provisions of the Information Technology Act, 2000 (IT Act) and Rules.
  • 24*7 helpline: The rules state that complete information on the medicines will have to be provided by the e-pharmacy holders and a 24/7 helpline should be made available.
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