The Big Pharmacy Showdown Against Online Sale of Medicines: Government To Weigh In After Elections

Since their advent circa 2015, e-pharmacies found their sunshine during the Covid-19 outbreak and the nationwide lockdown. The who's who of the Indian corporate world – Tatas, Reliance, Health+, Apollo, Amazon, PharmEasy and MedPlus – have invested some US$3 billion in e-pharmacies, according to industry experts.

Among the many reasons why the e-pharmacy business is occupying a grey area is that the government is wary of alienating the 12.5 lakh brick-and-mortar chemists and pharmacies in an election year. Still, the e-pharmacy business is booming! Global investment heavyweights Temasek, Sequoia, BlackRock and others have already invested millions of dollars in the e-pharmacy sector.

Consumers can’t get over the convenience factor. Rakesh Gupta, a retired Haryana government engineer, has been buying medicines online for some three years. Gupta, who now lives in Delhi's Kalkaji, said he has not been to a chemist’s shop for more than three years.

“Buying medicines online is a blessing for us. Earlier, we fetched medicines from the nearest outlets, which took time. Now, we can order medicines from home,” Gupta said. “It's easy, convenient and cheaper. We have become used to it now.”

Invest India, a central government agency for promotion of investment, noted: “e-pharmacies emerged around 2015, have disrupted the markets and gained traction rapidly and the market is expected to reach US$4.5 billion by 2025." Its estimate says the pharmaceutical market is expected to touch US$65 billion by the end of 2024 and US$130 billion by 2030. The retail pharmacy market will alone be worth US$40 billion.

Traditional Chemists’ Grouse

The first stone against e-pharmacies was cast by the chemists and pharmacists body, the All India Organisations of Chemists and Druggists (AIOCD), which threatened to go on a nationwide agitation if the government didn't shutter e-pharmacies.

The AIOCD insists that the business of e-pharmacy companies is illegal. In February 2023, the Central Drugs Standard Control Organisation issued show-cause notices to the e-pharma companies for the alleged violations.

The companies responded that they were only providing online platforms for the sale of medicines and that their roles are nothing more than intermediaries as defined in the IT Act, 2000.

“The role of an e-pharma company is very limited. We are working like intermediaries. We have been allowed to sell medicine by an amendment in 2018. A large number of foreign and domestic companies have invested in this new sector,” said a senior executive of a big e-pharmacy firm.

“We don't expect any adverse decision from the government, we expect that the smooth operations of e-pharmacy companies will continue and enough space for us would be provided in the policy that the government is expected to bring in,” the executive said.

But AIOCD general secretary Rajiv Singhal doesn’t flinch when he zeroes in on the faults of e-pharmacies. “Online medicine sales are illegal, it violates the mandate of drug sales provided as per Indian laws. There is currently no provision under the Drugs and Cosmetics Act, 1940 and Drugs and Cosmetics Rules, 1945 for online pharmacies,” Singhal pointed out.

Singhal added, “There are several other issues that need to be taken care of, for example, the doctors who prescribe on behalf of e-pharmacy companies are not registered. Who would be responsible if some untoward issues happen and patients’ lives are in danger?”

Government Stance On E-pharmacy

During the last monsoon session of Parliament, Minister of State for Health and Family Welfare Prof. S.P Baghel said in a written reply that e-pharmacies were selling medicines in line with government regulation.

“In order to regulate the online sale of medicines comprehensively, the Government had published draft Rules vide GSR 817 (E) dated 28th August 2018 for amendment to the Drugs and Cosmetics Rules, 1945 for incorporating provisions relating to regulation of sale and distribution of drugs through e-pharmacy,” the reply said.

“The draft Rules contain provisions for registration of e-pharmacy, periodic inspection of e-pharmacy, procedure for distribution or sale of drugs through e-pharmacy, prohibition of advertisement of drugs through e-pharmacy, complaint redressal mechanism, monitoring of e-pharmacy,” the Minister said.

Despite several consultations with stakeholders, the government is yet to finalise the draft policy on e-pharmacy. In the meanwhile, traditional chemists moved court in several parts of the country against e-pharmacies.

Now in the Delhi High Court, an eight-week deadline for the government to come up with a final policy draft set by the court went unheeded. Recently, the Centre implored the court for more time. The court then granted four more months to draft policy after the government cited the machinery's preoccupation with the oncoming general elections.

While e-pharmacies exist in the USA, the UK and Germany, China doesn’t allow online sale of medicine. India has allowed it despite the laws pointed out by AIOCD's Singhal above.

Tough Call On Policy

The decision for the government is not a straightforward one. Would the government take a chance against the interests of the 12.5 lakh retail and distributor outlets in the country?

Chemists and stockists in the country are vehemently opposed to e-pharmacy operations. They want the Centre to stop the online sale of medicines. They are planning to give several presentations to the government, citing other serious aspects of this trade.

With a firm grip at the grassroots, pharmacists wield considerable political influence. It is also debatable how pressure groups like AIOCD can force the Centre to block a business model that has attracted such large sums of investment. Besides, can people be denied the convenience?

The government is expected to decide the way forward after the general elections. There is merit in the arguments of both sides and the government faces a tough task of balancing between the imperative to promote innovation and investment on the one hand and, on the other, its obligation to protect livelihoods and jobs.