It is business as usual for online pharmacies as various High Court orders calling for a clampdown on these websites selling medicines remain on paper in the absence of a concrete law.
“The ban is theoretically valid, but as things stand today, it will never be enforced,” said a Mumbai-based investor in e-pharmacies. His cynicism is understandable.
Even as the Drug Controller General of India (DCGI) and the State drug controllers were dragging their feet on implementing the court-imposed ban, a Division Bench of the Madras High Court stayed the order, allowing players like NetMeds, PharmEasy, 1Mg and Medlife to ply their trade without the fear of a regulatory backlash.
At the State-level, while Delhi’s Drug Controller Office has not moved against any e-pharmacy business, Maharashtra’s Food and Drugs Administration has been investigating and taking action against the businesses in a fragmented manner. “Fourteen licences have been cancelled. Charges were framed for manipulation of prescription as also quantity of drugs,” said AT More, Assistant Commissioner (Zone 4), FDA Maharashtra. However, in all these cases, the State FDA Minister reversed the suspension of licences issued by the FDA.
Atul Nasa, head of Delhi Drug Controller Office, said they had taken no action against any online pharmacy.
Former FDA Commissioner of Maharastra Mahesh Zagade, who had initiated a crackdown on e-pharmacies in 2013 — even before an inter-State committee was set up to come out with recommendations and the Centre had come out with the draft rules — said that in the absence of rules, running online pharmacies is illegal.
The courts have asked the government to notify the rules by January.
“The Drugs and Cosmetics Act is clear that there is not even an iota of ambiguity that e-pharmacies are illegal. It states that there should be at least a 100 square feet space in which a qualified pharmacist can tender drugs. The place should be open for inspection at any time for it to be licensed as a pharmacy,” Zagade said.
Demand for CBI probe
And then there is the money-laundering angle. Zagade explained. “For example, a person sitting in Canada may procure medicines from Maharashtra for $50. While only a partial payment of $5 is made to the chemist in Maharashtra, $45 gets routed to the Caribbean Islands. A local person in India may later reimburse $45 to the chemist in Maharashtra,” he said. Zagade had written to the DCGI and the CBI to probe such cases further, but there has been no traction on this.
E-pharmacies account for only 1.5-2 per cent of the total domestic drug sales that tip ₹1.6 lakh crore. Investors explain that even as they are facing losses, e-pharmacies are in a race to swell their valuations.
A person who holds an equity stake in PharmEasy said, “At least ₹250 crore has been invested in PharmEasy till date. Its valuation is around ₹1,200 crore as of now. They are burning further money on expansion, though they are currently making losses. But it is all a game of valuation at this point.”
Dilip Mehta, President, Pharmaceutical Wholesalers’ Association, Mumbai, said that once the rules are in place, more regional players will emerge and consumers will definitely benefit with competition.