Take Action Against Illegal Epharmacies, Formulate Rules: Delhi HC To Centre

After their recent brush with government agencies, the homegrown digital pharmacy ecosystem is now facing the ire of the judiciary.

Earlier this week, the Delhi High Court (HC) came down hard on the union government for failing to formulate rules to govern the country’s burgeoning epharmacy industry. A bench comprising Chief Justice Satish Chandra Sharma and Justice Subramonium Prasad directed the Centre to take action against illegal epharmacies.

In an order issued on May 22, the court also noted that the pendency of ongoing cases ought not to prevent the union government from taking action against non-licenced digital pharmacies.

“It is made clear that the pendency of the present matters will not come in (the) way of the Union of India in taking action against the persons who are violating the interim order dated 12.12.2018,” the HC said in its order.

In its December 2018 order, a Delhi HC bench had issued an injunction on the sale of medicines by online platforms without licence. It had also directed all relevant authorities to ensure the prohibition is enacted with full force till further orders.

The HC, on Monday, also gave a six-week deadline to the union government to file final submission before it on its ongoing consultation with digital pharmacies and other stakeholders.

The order came close on the heels of the union government submitting the status report sought by the HC on the issue. In its order, the court hinted that the report, submitted on May 19, was still inconclusive and no firm decision was yet taken on the operation on the epharmacies in the country.

Welcoming the order, the South Chemists and Distributors Association (SCDA) termed the HC’s directive a commendable step which would ensure welfare and protection of the general public.

“The proliferation of illegal epharmacies poses significant risks to public health and safety… During the hearing, the division bench observed that unregulated sale of medicines poses a greater risk than sale of liquor. The Delhi High Court’s decision that action be taken against such illegal entities is a commendable step in ensuring the welfare and protection of the public,” SCDA’s legal and media head Yash Aggarwal said.

Speaking to Inc42, Aggarwal urged the government to frame laws and regulations concerning the space. He also emphasised the need for temporarily shutting down epharmacy platforms in the country till full-fledged legislations are drafted for governing the industry.

“Uphold the laws and draft laws carefully. When things are against the law, especially with regards to the health of the public, follow court’s directions and shut these platforms, during the interim, till norms are promulgated in the matter,” Aggarwal told Inc42.

It is pertinent to note that the case is nearly five years in the making. It all began after a petition was filed before the Delhi HC seeking regulation of digital pharmacies in the country. In the intervening period, the union government tried to bring in a draft legislation (New Drugs, Medical Devices and Cosmetics Bill, 2022) to regulate the healthtech segment but it soon hit a stonewall and is currently in limbo.

The proposed norms are being mulled over as there are no specific laws governing the digital pharmacies, barring a few aspects under the IT Act, 2000. In the absence of rules, a slew of companies and startups have propped up to cater to the growing segment of online users even as regulation seems sparse.

The crackdown from Delhi HC has also seen government agencies crack the whip on epharmacies.

In February, the Drugs Controller General of India (DCGI) issued notices to as many as 20 such players, including Tata 1mg, Amazon, Flipkart, NetMeds and MediBuddy, for violating rules under the Drugs and Cosmetics Act, 1940. Quick on the heels of that, reports also emerged that the Centre was mulling a ban on digital pharmacies for flouting data privacy norms and predatory pricing.

Despite the hurdles, the Indian epharmacy market still continues to be a lucrative segment and is estimated to soar to a market size of INR 8,947 Cr by 2027.

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