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E-pharmacy in India

Context:

Madras and Delhi High Courts recently banned the online sale of medicines.

Background:

The order was in response to a PIL filed by a Delhi-based dermatologist who said that unregulated online sale of medicines could lead to substandard drugs being sold, some of which have psychotropic substances that can be misused for criminal activities.

What is e-pharmacy?

E-pharmacy denotes the buying and selling of medicines and other pharmaceutical items with the support of web portal or any electronic mode. These are online platforms where consumers can purchase medicines without having to visit brick-and-mortar pharmacies.

Status of e-pharmacy in India:

The Indian pharmacy market is huge and, as of 2017, is the third largest in terms of volume and 13th largest in terms of value, globally. However, the e-pharmacy market is estimated to be a fraction of that. There are more than 200 e-pharmacy start-ups in India.

Prospects and Benefits of E-pharmacy

  1. 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 toThe Federation of Indian Chambers of Commerce and Industry(FICCI), 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 large population with unmet medical needs, increasing internet penetration in both urban and rural areas and changing consumer needs.
  2. 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 limited presence of retail pharmacy.
  • 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: E-pharmacy model reduces working capital, overhead costs, and trade margins to the pharmacists. This finally translates into a cost advantage to consumers.

Benefit to pharmaceutical companies:

  • Online sale will provide much deeper market penetration and a broader customer base for pharmaceutical companies.

Benefits to Regulators:

  • Authenticity: E-pharmacies enable efficient tracking of medicines which can help in tracing counterfeit medicines. This can help in making the market more transparent and ensuring that authenticity is strictly maintained.
  • Data analytics: E-Pharmacies can store and analyse large amounts of data on consumers across the country, which can be utilized for planning public health policies.

Issues with E-pharmacies in India:

  1. Regulatory issues:Medicinescome under the purview of the Drugs and Cosmetics Act, 1940. However, the current Drugs and Cosmetics Act, 1940 doesn’t explicitly deal with e-pharmacies. Thus, there is no clear-cut guidelines to regulate, control and monitor e-pharmacies in India.
  2. 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
  3. 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 re-ordered and misused by the consumers leading to drug abuse and other criminal activities.
  1. 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.
  2. Effect on retail sellers: The growth of e-pharmacies has given rise to concerns among the 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.
  3. Privacy issues: There medical privacy concerns associated with online transaction of drugs as the patient medical history could be leaked.

Government Measures:

In 2018, the Union Health Ministry notified a draft amendment to the Drugs and Cosmetics Rules 1945 by inserting a component “Sale of Drugs by E-Pharmacy” (Part VI-B) which will legalise the e-pharmacies in India.

Draft Rules on E-pharmacy

Key highlights:

  1. 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”
  2. Mandatory Registration: The draft rules make it mandatory for e-pharmacy businesses to register with the Central Licensing Authority
  3. 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.
  4. Privacy: It states that the details of patient should be kept confidential and not to be disclosed to any third party except the central government or the state government concerned.
  5. Prescriptions: For carrying out 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.
  6. Prohibition on sale of certain drugs: Sale of drugs covered by the Narcotic Drugs and Psychotropic Substances Act, 1985, tranquilizers and drugs listed under Schedule X has been prohibited.

Note: Schedule X drugs include narcotics and psychotropic substances.

  1. Prohibition on Advertisement: Advertisement of drugs is prohibited on any media for any purpose by an e-pharmacy.
  2. Compliance with IT Act: E-pharmacies have to comply with the provisions of the Information Technology Act, 2000 (IT Act) and Rules.
  3. 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.

Way Forward

  1. The e-pharmacy sector holds immense potential to address the persisting issue of affordability and accessibility of medicines in India. Steps should be taken to foster the e-pharmacy sector with sufficient safeguards and under stringent regulatory control to protect the interest of the consumers.
  2. A stringent licensing mechanism should be adopted for e-pharmacies. A logo and a registration number for e-pharmacies can be generated which would enable the consumer to check the authenticity of the platform. For example: The European Union (EU) has issued a common logo for legally operating e- pharmacies in the EU member states.
  3. Information regarding patient should be digitally stored to prevent medicinal abuse and ensure tracking in case there is any adverse event to a medicine.
  4. Government health schemes, e-health initiatives for example telemedicine can be linked to e-pharmacies to efficiently cater to a large section of population in rural and sub-urban areas with unmet medical needs.
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