Madras HC bans online medicine sales, asks Centre to notify rules by Jan 31

The Madras High Court has ordered a ban on the online sale of medicines in the country till the Centre notifies the rules — which are in the draft stage. It has fixed January 31, 2019 as the deadline for the government to issue the notification.

The direction follows a petition filed by the Tamil Nadu Chemists and Druggists Association (TNCDA). The court had, on October 31, issued an interim order restricting online sale of medicines without licence and had directed the Centre or competent authority to curb such transactions.

Following the interim order, six online pharmacy firms, including 1MG Technologies, Digital Health Platforms, Netmeds Market Place, 91 Streets Media Technologies, Medline International and Practo Technologies, were impleded in the matter. These firms then sought clarification from the court that the ban was only on unauthorised sellers.

The online aggregators argued that they sell only on prescriptions, and through registered pharmacists. The online aggregators said that they can give an undertaking that they are selling only from licensed pharmacies. Companies like Netmeds argued that they already have the licence to sell medicines and should not be affected by the order.

The TNCDA has been arguing that the prevailing regulation has no provisions for selling medicines online. Besides, since the draft rules are still under consideration, the current sales of medicines online are not legal. It argued that as per the existing regulation, non-OTC drugs could only be sold by a registered pharmacist against prescription and only from the premises for which the licence has been issued by the drug regulatory authority.

After hearing the arguments, Justice Pushpa Sathyanarayana on Monday passed the order directing the Centre to notify the rules before January 31, 2019 and asked the online pharmacies to get approval from the authorities for their operations following this. Till then, the court said, the stay on online sales of medicines would prevail.

TNCDA general secretary K K Selvan welcomed the order and said that the organisation had submitted its representation regarding the draft rules for online sales, calling for it to be helpful and safe for the public. If there are any aspects which are against the safety of the public, the association would look at legal action.

Amit Khanna, spokesperson for PharmEasy, an online medicine delivery firm, said that the order will not impact its business as it isn’t an online medicine seller and it is aggregating the registered pharmacists with sales licence to offer medicine to the customers.

TNCDA, in its petition, claimed that more than 3,500 sites were selling and distributing medicines online all over the country.

From a market size of $12.6 billion in 2009, the Indian pharmaceutical market is expected to grow to $55 billion by 2020, with the potential to reach $70 billion in an aggressive growth scenario.

ResearchAndMarkets.com estimates that the e-pharmacy market potential is worth over a billion dollars with global and domestic industry giants like Amazon and Flipkart, and more than 30 startups trying to grab the pie. Indian e-commerce industry is anticipated to grow at a CAGR of over 20 per cent, crossing the $3-billion mark by 2024.