Many factors have contributed to the adoption, growth, and surge of e-pharmacies across the globe. Ever-changing customer preferences, COVID-19, increased technological awareness, and enhanced convenience is the most important factors that have enabled and sustained this growth in many countries. In India, however, wide adoption of digital services, health consciousness and a growing number of total smartphone users have further accelerated their acceptance in mainstream India.

The reception e-pharmacies have received from the users in India post-covid period is nothing short of extraordinary. The current boom of demand in e-pharmacy platforms has led to many customers completely switching to online pharmacies.

According to the white paper published by the Federation of Indian Chambers of Commerce and Industry (FICCI), “Among Patients with Chronic Diseases, the acceptability for e-Pharmacy as an important prospect has been found to be higher, with 94% of the respondents currently buying medicines for chronic diseases showing the inclination to accept e-Pharmacy in the future, reluctance toward the same being displayed by only 6% of the sample.

So it is clear that when it comes to customers, are not reluctant in buying their medications from the e-pharmacies. But how well the facilitators i.e. pharmacy owners respond to this rising demand remains to be seen. Most pharmacy owners want to incorporate online pharmacies into their existing business but are perplexed owing to the vague rules and lack of clarity about this particular business model. To make things easier for the pharmacy owners, we have covered all the e-pharmacy rules that are in force in this article.

Before we begin to delve into the rules and regulations concerning e-pharmacies, it is better to take a brief look at the different models of e-pharmacies in India.

The different models of e-pharmacies:

     1. 'Online-only’ pharmacy:

  • It sells medicines directly
  • It has its inventory
  • It requires a retail pharmacy license
  • Workflow: Receive order > Verify medicine order > Ship Order > Deliver Order

2. A digital twin of ‘Brick-and-Mortar’ pharmacy:

  • Serves as an online extension of Brick-and-Mortar pharmacies
  • It may or may not operate its delivery chain
  • It requires a retail pharmacy license
  • Workflow: Receive order > Verify medicine order > Ship Order > Deliver Order

3. E-pharma marketplace:

  • Doesn’t sell medicines directly, acts as a facilitator between a buyer and a seller
  • It relies on third-party sellers
  • It connects the local pharmacies to customers
  • It delivers medicine from the local pharmacies
  • It doesn’t require a retail pharmacy license
  • Workflow: Receive order > Forward the order to a pharmacy > Pharmacy verifies medicine order > Receive confirmation > Ship Order > Deliver Order

The e-pharmacies are not regulated by hard and fast rules and regulations, and there are no laws designed to govern e-pharmacies specifically. The absence of clear regulations leaves space for interpretation and this has created some misconceptions about the e-pharmacies.

The need for clear regulations is catalyzed by the fact that in India several rules governing pharmacies and e-commerce are applied to the e-pharmacies.

The list of relevant laws includes, but is not limited to the following rules:

1. Medicines and Cosmetics Act, 1940 (D&C Act)

Defines the pharmacies and lays fundamental guidelines for the operation of medicines and cosmetics. It also mandates a retail license to sell the medicines on the basis of a valid medicine order.

2. Medicines and Cosmetics Rules, 1945 (D&C Rule)

Regulates manufacturing, sale, distribution, import, and advertisements of medicines and cosmetics.

Prescribes and ensures product and labeling standards.

3. Pharmacy Act, 1948

Regulates the pharmacy profession as a whole and sets rules and extent of punishment for an offense.

4Medicines and Magic Remedies (Objectionable Advertisement) Act, 1954

Regulates advertisements of medicines relating to certain conditions and diseases.

5Narcotic Medicine and Psychotropic Substances Act, 1985

Regulates operations, including sales, relating to narcotic medicines and psychotropic substances, and provides stringent punishments for matters related thereof.

6. Information Technology Act, 2000 (IT Act)

Regulates the bodies or persons who deal with sensitive data of all kinds. Implement measures to ensure data privacy and penalizes disclosure of personal information without consent.

It was further amended in 2011 as Information Technology (Reasonable security practices and procedures and sensitive personal data or information) Rules, 2011 to include medical records and history, biometric information, physical, physiological, and mental health condition; and other such sensitive data.

7. Indian Medical Council Code of Ethics Regulations, 2002 (MCI Code)

Regulates the professional conduct of registered medical practitioners in India, prescribes acceptable medical practices and provides penalties for the violation of these regulations.

Before we set out to understand the draft rules for e-pharmacies, it is fruitful to get a brief overview of the various government agencies governing the pharmacy market.

The list of such regulatory agencies is as follows:

     1. Central Medicine Standard Control Organisation (CDSCO)

         Responsibility: Setting and ensuring the quality of standards for medicines.

     2. State Medicine Standard Control Organisation

         Responsibility: Regulating the manufacturing, sale, and distribution of medicines in the respective states.

     3. The Medicine Controller General of India (DCGI)

        Responsibility: Heading the CDSCO and carrying out the licensing and controlling function of CDSCO.

The Ministry of Health and Family Welfare, in consultation with the Medicines Technical Advisory Board, released a draft vide its notification G.S.R. 817(E), dated 28th August 2018 aiming to amend the Medicines and Cosmetics Rules,1945 to better govern the e-pharmacies.

The ministry concerned had floated this draft and stipulated a time period of 45 days for objections and suggestions from all the stakeholders involved. But, the rules are yet to come into force. And therefore the e-pharmacies in India are still governed mostly by existing laws that govern brick-and-mortar pharmacies. In simpler terms, it means that the law doesn’t distinguish e-pharmacies from brick-and-mortar pharmacies.

Although these rules are yet to be finalized and are yet to become law, taking a deep dive into this draft will give us important insights into how the government intends to regulate e-pharmacies in the future.

These draft rules aimed to properly define the online sale of medicines, and medicine orders and sought clarity on what type of licenses e-pharmacies would need from regulators to operate. Some of the noteworthy revisions suggested in the draft rules are as follows:

     1. Definition of ‘e-pharmacy’:

  • For the first time, the term ‘e-pharmacy’ was defined; It was accurately defined as a business of distribution or sale, stock, exhibit, or offer for sale of medicines through a web portal or any other electronic mode.

     2. Registration of e-pharmacy:

  • The rules require that any person intending to conduct an e-pharmacy business needs to mandatorily apply for registration to the central licensing authority by filling the form 18AA along with furnishing the required documents and making a payment of INR 50,000.
  • The validity of the registration would be three years from the date of issue. After the expiration, the pharmacist is required to renew the license.

     3. Audit:

  • The draft rules also make clear provisions for a periodic inspection of the business. The e-pharmacy registration holder must allow the inspection by the authorized team of the central licensing authority every two years.

    4. Data Localisation:

  •  According to the draft, e-pharmacies are required to establish the e-pharmacy portal through which they conduct business in India and shall keep the data generated localized.
  • These rules also specify that the data generated or mirrored through the e-pharmacy portal shall not be sent or stored outside India.

    5. Confidentiality of the Information:

  • The e-pharmacies are required to keep all the details of their customers discreetly. Further, they are also required to disclose these details to the concerned government for public health purposes.

    6. Helpline and Grievance Redressal:

  • The e-pharmacy registration holder will have to set up a support and grievance redressal mechanism for a minimum period of 12 hours a day for 7 days a week, and a registered pharmacist is required to answer the customer queries.

    7. Central License:

  • The draft rules mentioned a provision of a central license from the country’s apex medicine regulator, to allow them to operate across the country.
  • According to a report from the Indian Express, “India’s medicine regulations mandate retailers to have a license to dispense medicines from the state in which they are being sold. This may have been a reason behind Amazon restricting its pharmacy operations to Bengaluru at present.

    8. Regulatory Authority:

  • These draft rules propose to appoint a central licensing authority i.e. Medicine Controller General of India (DCGI) to replace state medicine regulators. DCGI will be the sole authority for granting approvals with a validity of three years.
  • By the means of an extraordinary gazette vide CG-DL-E-26032020-218928 dated 26th March 2020, the ministry of health and family welfare made some formal rules for the doorstep delivery of medicines. It dictated that the medicines for which a medicine order is required shall be sold based on receipt of medicine order physically or through e-mail, subject to the licensee providing an email ID for registration. Furthermore, it decreed that the bill or cash memo shall be sent by the return email, and records of all such transactions shall be maintained by the licensee.

What is the current status of this draft?

In the same article from the Indian Express, it is reported that “In June 2019, these draft rules were pushed to two expert committees by India’s apex medicine regulatory body under the Central Medicines Standard Control Organisation.”

But unfortunately, we are yet to see the outcome of the said meetings. Whatever the outcome may be, pharmacists across the country would like to see separate rules for the e-pharmacies be formed and implemented as soon as possible.

The Federation of Indian Chambers of Commerce and Industry (FICCI) has encouraged the government, to define policies and guidelines for e-pharmacies and come up with a clear-cut operating model.

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