E-Pharmacies In India: The Need For Regulation

Shebani Bhargava comments on the need for regulation pertaining to E-Pharmacies in india.

I. INTRODUCTION

Advancements in technology, the availability of internet and digitalization have revolutionized the lifestyle of humans. The world is transitioning from offline to online markets. The increased trend and shift to E-commerce has led to the advent of online or E-pharmacies. E-pharmacies are virtual platforms that operate like E-commerce websites. An order of medicines is placed on the E-pharmacy website/app and the drugs are delivered to the customers chosen address. As a result, a customer need not visit a brick and mortar pharmacy. OTC medicines can be ordered directly, whereas for prescriptions drugs, the customer is required to upload a scanned copy of an original prescription.¹

E-pharmacies operate using three business models. First, the inventory model where the E-pharmacy possesses the drugs itself and sells it to customers directly through its own website/app; Second, the marketplace model where the E-pharmacy acts as a platform and an intermediary and connects the customer to a brick and mortar pharmacy; Third, a combination of both.² Some of the prominent E-pharmacies are Netmeds, 1mg, Medlife, Pharmeasy etc.

Benefits and Risks of E-pharmacies

E-pharmacies are increasing in demand because of their benefits. First, E-pharmacies improve customer convenience and access. They also improve access to rural areas where there is limited presence of retail pharmacies.³ Second, E-pharmacies are cost effective as they typically offer discounts.⁴ Third, E-pharmacies offer health information like drug interactions, side-effects, warnings and automated medicine reminders which enables the consumer in improving compliance.⁵ Last, online transactions on E-pharmacies can be tracked with complete details of the medicines, batch number and details of retail pharmacy, prescribing doctor and the customer. This can help prevent drug abuse and over consumption.⁶

There are also numerous risks involved with E-pharmacies. One of the biggest concerns is that E-pharmacies dispense drugs against the scanned copy of a prescription. These are easy to manipulate and hence, can result in over use of drugs.⁷ The second concern is the presence of illegal E-pharmacies which may sell low quality drugs.⁸ Third, the privacy of the customer is at risk as information is stored online.⁹ Fourth, some drugs require specific storage conditions and if not monitored properly, sensitive drugs may lose their efficacy and potency. Further, mishandling during transportation can also affect the drugs. Last, since the internet is easily accessible by minors, they can order medicines online and can consume them without parental supervision. This can lead to drug abuse and over-consumption.¹⁰

The risks associated with them cannot be ignored because of the far reaching consequences it can have on an individual’s health. In order to control and mitigate the risks, it is important for E-pharmacies to be effectively regulated.

II. LEGAL FRAMEWORK REGULATING E-PHARMACIES

In India, the manufacture, sale and distribution of drugs is governed by the Drugs and Cosmetics Act, 1940 (‘DCA’), Drugs and Cosmetics Rules, 1945 (‘DCR’), Pharmacy Act, 1948, Pharmacy Practice Regulations, 2015 and the Drugs and Magic Remedies (Objectionable Advertisement) Act, 1954.

Now the question that arises is whether these legislations regulate E-pharmacies. The DCA and DCR does not contain any provisions in relation to the online sale of medicines. In 2015, the Office of Drugs Controller clarified that the DCA and DCR do not distinguish between the conventional and over the internet sale of drugs and hence, the provisions of the DCA and DCR have to be complied with by E-pharmacies.¹¹ A Self-Regulation Code of Conduct was also released by FICCI in 2016, however this of course does not have the force of law.¹²

While the Office of Drugs Controller allowed the operation of E-pharmacies under the DCA, the High Courts expressed an opposite opinion. In 2018, the Madras High Court stated that until the Drugs and Cosmetics (Amendment Rules), 2018 were not notified, the online sale of medicines is not permitted.¹³ Following this, the Delhi High Court also injuncted the online sale of medicines without license.¹⁴ However, later a division bench of the Madras High Court stayed the order banning the online sale of medicines, saying that it would create inconvenience and health issues to the concerned persons, if the online sale of medicines was suddenly prohibited.¹⁵ Thus the online sale of medicines was allowed.

Presently, licensed E- pharmacies are operating leveraging the fuzzy difference between online and offline pharmacies under the DCA. Some E-pharmacies have even argued that they operate as a marketplace that connects registered pharmacies to customers, and since they act as intermediaries¹⁶ under the Information Technology Act, 2000 (‘IT Act’), they do not require a license for sale of drugs as the actual dispensation happens through physical pharmacies.¹⁷

Now even though E-pharmacies are governed by the DCA and the DCR, it is important to note that these legislations were enacted prior to the advent of the internet and consider the sale of drugs only through physical stores only. They were enacted keeping in view risks and challenges that arise while operating physical stores, and do not account for the risks associated with E-pharmacies. Therefore there are some key concerns and challenges that arise in applying the existing framework to E-pharmacies.

a) Dispensing of drugs

As per the Pharmacy Act¹⁸ and the DCR¹⁹, only registered pharmacists can dispense medicines on the prescription of a medical practitioner. With respect to E-pharmacies, it cannot be ensured whether the dispensation of drugs is happening through a registered pharmacist. Further the Pharmacy Practise Regulations 2015 require a pharmacist to counsel a patient regarding the usage of the drugs, the side effects, etc., while purchasing drugs, and this may not be possible on an E-pharmacy. One way to address this concern is to restrict the online sale of drugs to only over-the-counter medicines that need not be dispensed by a pharmacist.

b) Misuse of prescriptions

To order prescription medicines through an E-pharmacy, a customer has to upload a scanned copy of the prescription on the website. Once uploaded online, these became electronic records within the meaning of the IT Act,²⁰ which require an electronic/digital signature for authentication.²¹ Presently, there is no mechanism for verification and authentication of the scanned prescriptions. Scanned copies of prescriptions can be easily doctored, manipulated and misused and can lead to over use of drugs.²² Further, as per Rule 65 of the DCR, a noting is required to be made on the prescription regarding the supply of the drugs.²³ While ordering from E-pharmacies, there is no mechanism to ensure noting such that the same prescription not used repeatedly on different E-pharmacies.

c) Operation of illegal E-pharmacies

Section 18(c) DCA provides that for a pharmacy to operate, it has to be registered. Thus E-pharmacies also have to be registered. However it is possible that there could be certain e-pharmacies that are operating without a licence. These illegal pharmacies could be selling low quality or spurious drugs which could affect the health of the consumer. There should be a designated authority to identify and block illegal websites selling medicines.

d) Privacy of healthcare data

Since prescriptions are uploaded online by a customer, E-pharmacies have to ensure that the information remains private and confidential, because if this sensitive healthcare data is leaked, it would constitute a violation of the customers right to privacy.²⁴ There should be a privacy policy in place.

e) Storage and Transportation

Transportation of drugs is another factor that is not covered by the present laws. It is possible that during storage and transportation, some sensitive drugs lose their potency and degrade.

f) Regulatory machinery

The sale of drugs and registration of pharmacies is governed by State Licensing Authorities²⁵ considering that a brick and mortar store caters to customers in a particular State only. However, such a model of regulation may not be feasible for E-pharmacies that operate as marketplaces and can be accessed from any state. Therefore are they required to obtain licenses in every state from where their sellers are dispensing drugs?

As can be evidenced, E-pharmacies cannot be effectively regulated under the current framework and there is imminent need to enact specific guidelines that govern E-pharmacies and can account for all the challenges associated with them. Even the Sub-Committee appointed by the Office of Drugs Controller in 2015 concluded that the existing legal regime was inadequate and incompatible with the E-pharmacy business model, and consequently recommended various changes to the existing law.²⁶

III. ANALYSIS OF DRAFT E-PHARMACY RULES

In 2018, the Ministry of Health and Family Welfare promulgated the Drugs and Cosmetics (Amendment) Rules, 2018 (‘Draft Rules’) to make way for operation of E-pharmacies.

Overview of the Draft Rules

Under the Draft Rules, an E-pharmacy is the business of distribution or sale, stock, exhibit or offer for sale of drugs through a web portal or any other electronic mode.²⁷ The Draft Rules contain provisions for the following:

a) Registration

As per the Draft Rules, registration is mandatory for any person who wishes to run an E-pharmacy.²⁸ This registration is valid for 3 years²⁹ and can be renewed.³⁰

The Rules also lay down certain conditions of registration.

• The E-pharmacy has to comply with the provisions of the IT Act.³¹
• The information received by an E-pharmacy from any customer is not be disclosed and has to be kept confidential. It can be however be disclosed to the Central/State Government for public health purposes. Further, the health information must be stored locally i.e. it cannot be stored or sent outside India.³²
• The supply of any drug to the customer must be made against a cash/credit memo and the record of the same must be maintained.³³
• The E-pharmacy must not sell drugs enumerated under the Narcotic Drugs and Psychotropic Substances Act, 1985 (habit-forming drugs), tranquilisers and Schedule X drugs.³⁴
• The E-pharmacy is required to have a 24/7 customer support and grievance redressal facility. There should also be a registered pharmacist to answer the queries of customers.³⁵
• The E-pharmacy is required to mention data such as registration number, official logo of the E-pharmacy Portal, details of the logistic service provider, return policy of the dispensed drugs, name of the registered pharmacist, contact details of the E-pharmacy, and the procedure for lodging grievances.³⁶

This registration can be suspended or cancelled, in case the e-pharmacy registration holder contravenes any provision of the DCA or DCR.³⁷

b) Procedure for distribution or sale of drugs

On receipt of a prescription, the registered pharmacist on behalf of the E-pharmacy is required to verify the details of the patient, registered medical practitioner and arrange for the dispense of the drugs. The e-pharmacy is required to dispense and make arrangements for supply of drugs from any licenced premises under the DCA. Further, the details of the drugs dispensed and the patient details have to be maintained.³⁸

E-pharmacies cannot advertise any drug on radio or television or internet or print or any other media for any purpose.³⁹

c) Inspection and Monitoring

The premises from where the E-pharmacy business is conducted shall be inspected every 2 years by the Central or State Licensing Authority.⁴⁰ Further, the Licensing Authority is required to monitor whether data and information regarding the drugs availability, types of drugs offered for sale, supply channels or vendor lists, details of registered pharmacists, registered medical practitioner, are being maintained by the registration holder.⁴¹

The Rules also provide for a Complaint redressal mechanism in case of supply of low quality, adulterated or spurious drugs.⁴²

Lacunae in the Draft Rules

While the Draft Rules are a step towards regulating E-pharmacies and tackling the imminent risks associated with them, there are various issues that the Draft Rules have failed to address. The Draft Rules have failed to address the previously mentioned concerns of validity of prescriptions, misuse of prescriptions, dispensing of prescription drugs, operation of illegal pharmacies, storage and transport, and the issue of multiple licensing.

Apart from this, there are some other lacunae in the Draft Rules.

While the Draft Rules provide that the information of the customer can be disclosed to the Central or State Government for public health purposes. This provision fails to define the situations in which government can access the such data. The broad ambit of ‘public health’ can lead to the violation of the customers right to privacy. Further, the Draft Rules also do not mention the authority within the government which will have the power to order for such a disclosure. The Draft Rules also do not mandate the E-pharmacies to display a privacy policy on their website for their customers. Additionally, the Draft rules do not provide the time period for which e-pharmacies are required to keep details of the drugs dispensed and the patient details on their portal. Lastly, the Draft Rules state that the data of a patient cannot be sent outside India. This is inconsistent with the Personal Data Protection Bill, 2019 which allows such sensitive data to be transferred with the explicit consent of the patient.⁴³

The Draft rules do not provide clarity on how an E-pharmacy will verify the details of a customer and registered medical practitioner. This is mainly to ensure that drugs are not being ordered by children without parental supervision, and that prescriptions are not being handed out by fake doctors.

The Draft Rules also do not provide any clarity on whether legal implications for E-pharmacies will differ based on their business model The rules should mention whether E-pharmacies that operate as a market place require a license under the DCA. This is because the DCA regulates ‘manufacture and sale of drugs’ as well as the ‘exhibition, offer for sale and distribution’ of drugs. Thus, one can argue that an E-pharmacies operating as a marketplace engage in ‘exhibit for sale’ and/or ‘distribution’ of drugs and hence are required to be registered under DCA. Further, the Draft Rules should clarify whether the marketplace E-pharmacies would qualify as ‘intermediaries’ within the IT Act.

IV. CONCLUSION

Considering the growing dependence on E-commerce and that Covid 19 disables customers from physically visiting pharmacies, E-pharmacies are the need of the hour. Regulating E-pharmacies is inescapable considering the significant impact they can have on health. Therefore it is of utmost importance that the Draft Rules are enacted at the earliest after addressing the pointed out problems. Further, to tackle the problems of effective regulation of E-pharmacies, policymakers can take into consideration the measures introduced by other countries like the USA and EU. For instance, in order to prevent customers falling prey to illegal pharmacies, the EU currently uses a system where every E-pharmacy that is legally operating and registered uses the common logo which links to the website of the national authority where all legally operating pharmacies are listed.⁴⁴ The logo ensures safety of the drugs and authenticity of the website.⁴⁵ In fact the Sub-Committee had recommended this. Similarly, even in the USA, E-pharmacies that are accredited with the Verified Internet Pharmacy Practice Sites, display a seal on the website, so that customers can verify if the E-pharmacy is legal.⁴⁶ In order to deal with the issue of fake prescriptions, India can adopt the US model, where E-pharmacies are allowed to dispense medicines only through of E-prescriptions. Scanned prescriptions or images of the prescription are not permitted.⁴⁷ This could be extended in India to include digitally signed prescriptions. Apart from this, steps can be taken to verify the details of the customer through a valid ID card.