The Indian Pharmaceutical sector has already been witnessing a fast paced growth; however, concomitant with the evolution of e-commerce in India, e-pharmacy has also gained considerable importance over the last couple of years. As a result, numerous pharmaceutical players have set up their online operations. In the absence of proper legal framework governing such online operations, the modus operandi of these online pharmaceutical businesses’ have largely remained unregulated and often misused. Consequently, the central government of India has proposed to amend the Drugs and Cosmetics Rules, 1945 with these draft amendment rules, 2018 (Draft Rules) which have been introduced vide a notification by the Ministry of Health and Family Welfare for public comments and suggestions. These Draft Rules in its chapter VI-B lay down certain provisions governing the ‘sale of drugs by e-pharmacy’.
Provisions of the Draft Rules
‘Sale of drugs by e-pharmacy’ under the Draft Rules has a broad construct and refers to the sale of drugs through an online platform not only to a hospital or a dispensary or an institution (whether research or medical) but also to any person on a retail basis. Under these Draft Rules, any person who intends to sell, distribute, stock, exhibit or offer the drugs for sale either through online portals or through any other electronic mode has to at first be registered with the central licensing authority (as constituted under the Drug and Cosmetics Act, 1985 (“DC Act“)) in accordance with the provisions of the DC Act. Registration fee of an amount of fifty thousand rupees has been prescribed for obtaining an initial registration for a period of three years by any person upon making a suitable application along with the necessary documents and any subsequent renewals thereof will have to be applied for in a similar manner by such person intending to register as an e-pharmacy prior to lapse of validity of initial registration. This move is an attempt to eliminate disingenuous applications coming forth. The grant of registration however to such applicants is dependent upon a thorough scrutiny of the application and documentation submitted with the central licensing authority and subject to any further inquiry as may be deemed appropriate by such authority.
There are certain prescribed conditions which are required to be followed by an e-pharmacy registration holder upon such registration being granted under the Draft Rules. By way of linking such registration conditions to the provisions of Information Technology Act, 2000 and underlying rules, the Government has made an attempt to ensure compliance in sync with the ongoing developments relating to data privacy and confidentiality in India. Having regard to the same, amongst others, an e-pharmacy registration holder is required to keep the data of the patients or customers confidential and not disclose the same to any person, other than the central or the state Government, as the case may be. To ensure reliability and authenticity of such registered pharmacist operating the e-pharmacy, credentials of respective e-pharmacy portals is to be maintained and updated by such registered pharmacists at all times so that the same may be monitored by the central or the state licensing authority at their discretion to ensure that the said portal is updated at all times with certain information such as information regarding drug availability, vendors, registered pharmacy, registered practitioner, etc. as required under the DC Act at all times. For the purposes of sale of any drugs by a registered pharmacist (on behalf of the e-pharmacy registration holder) a due process as prescribed under the Draft Rules will have to be followed at all times.
In terms of ensuring compliance checks on the e-pharmacy, there is a two pronged mechanism, which includes, an inspection to be conducted by the relevant field officer on the premises where the e-pharmacy operates its business from (on a periodic basis) and a data monitoring to be conducted by the central or state licensing authority to ensure updating of credentials and other details and records on the e-pharmacy portal maintained by such an e-pharmacy. Additionally, a customer facility will also be introduced for responding to any queries or addressing any grievances which the customers may have at any point in time. However, the said facility is a time bound facility, which is accessible for a period of twelve hours, throughout the seven days of the week. In order to deter the e-pharmacy registration holders from contravening or violating the DC Act and/or the Draft Rules, a provision for suspension (for a period as considered necessary by the central licensing authority) and cancellation of such registration of e-pharmacy registration holders is provided for.
Assessing the way forward
Overall, whilst the Draft Rules with its implementation will unleash welcome changes to the functioning of e-pharmacies in India; there seem to be certain lacunas in the legislation. A few suggestive changes would include specifying what qualifies as a violation or contravention under the Draft Rules as in its current form, the Draft Rules state that any violation of the DC Act or the Draft Rules may lead to at first a suspension for a period as considered appropriate by the central licensing authority which may even be followed by a cancellation of registration. In view of the substantial amount of registration fee and the fact that registration or re-registration, irrespective is charged at the same amount, specifying the contravention or violation explicitly may be helpful. Furthermore, the requirement and the events upon which disclosure of confidential information of customers is to be made to the central or the state Government by an e-pharmacy registration holder may be amply set out in the Draft Rules as it currently seems to be an open-ended ask by the Government.