Over a dozen online pharmacies are seeking an audience with health ministry officials to explain their stance over show-cause notices issued to them last month over sale of drugs in alleged violation of norms, top executives said. These efforts come even as the ministry is seeking the opinion of other government departments on the revised draft of the New Drugs, Medical Devices and Cosmetics Bill.
The proposed regulation seeks to include a clause that empowers the government to “regulate, restrict or prohibit” any sale, stocking or distribution of any drug by online mode, by issuing a notification. The draft regulations are being circulated for internal consultations and are expected to replace the earlier legislative framework, which was released to the public in July 2022 for stakeholder comments, the sources added.
Despite multiple communications being sent by representatives of e-pharmacies seeking audience with the health ministry on the issue, “there has been no response,” according to the people cited above. They spoke to ET on the condition of anonymity. “There is an impasse between the government and industry on several matters. The government has done its own analysis of the sector and its business model, and companies are looking to have conversations,” the sources said. “We have been trying (to get an audience) …there are quite a few people in the government handling these matters but our attempts are on.”
Earlier, on February 8, the Central Drugs Standard Control Organisation (CDSCO) sent show-cause notices to 20 e-pharmacies, including Tata 1mg, Amazon, Flipkart, NetMeds, MediBuddy, Practo, and Apollo, over the online sale of drugs in alleged violation of norms.
Following this, the companies, through industry associations, reached out to the health ministry to explain their viewpoint. Those issued notices have also responded to charges that online pharmacies were operating without the requisite licences, the sources said.
An email query sent to the health ministry went unanswered until press time.
Overtures to government
Following the government notices, Tata 1mg cofounder and chief executive Prashant Tandon wrote to health minister Mansukh Mandaviya, requesting an audience on behalf of top founders and CEOs of e-pharmacy companies.
Tandon’s letter was sent in his capacity as the chair of the Federation of Indian Chambers of Commerce and Industry’s (Ficci) e-pharmacy working group. ET has reviewed a copy of the letter.
“All e-pharmacies are compliant today under the provisions of the Drugs & Cosmetics Act. Having said that, there is a need for regulations to keep pace with the innovation in the sector…all e-pharmacies have assured their help and cooperation in helping frame regulations and abide by any/all regulations brought in by the government,” he wrote.
A few days after Tandon’s missive to the government late in February, Ficci wrote again — this time to Rajesh Bhushan, secretary of the ministry of health and family welfare — with a detailed representation on the show-cause notices issued to online pharmacies.
Ficci also sought an appointment to explain its stance. ET has seen a copy of the communication.
“We have responded to the notices, saying we are compliant, and all sales are under valid licences,” said a senior e-pharmacy executive, adding that other platforms have also done the same.
According to current regulations, an e-pharmacy requires a licence from state drug regulators to sell medicines online, whether in an inventory-led model or as a marketplace, this person said. “That compliance is in place. There was a draft on regulation, but it has not been notified into a law yet,” he added.
India’s e-pharmacy segment is backed by some of the world’s top investors, including Tiger Global, Sequoia Capital, Temasek and Prosus, in addition to having large conglomerates such as Reliance Industries and Tata group investing in companies such as NetMeds and 1mg.
Industry executives said health ministry officials had met select executives of some of the top e-pharmacies prior to issuing show-cause notices. “There were questions raised on data privacy and sale of narcotics, but we presented our case, clarifying that (it) doesn’t happen,” a senior executive said. “But after that, notices were sent, and companies haven’t been able to brief government officials.”
These developments come in the backdrop of a group of chemists and druggists planning a nationwide agitation against the online sale of medicines. On January 23, the All-India Organisation of Chemists and Druggists (AIOCD), which represents 12 lakh small retail pharmacists, wrote to the Prime Minister’s Office, giving an advance notice of its plan to strike from February 15.
On Tuesday, the government acknowledged being aware of the agitation. In response to a question in the Rajya Sabha, minister of state for health and family welfare Bharati Pravin Pawar said, “Chemist Association had given an advance notice of nationwide agitation from 15th February against sale of drugs on internet.”
AIOCD postponed the agitation indefinitely after meeting Mandaviya and other health ministry officials on February 8 — the day when the show-cause notices were issued.
“Sale of drugs is regulated under provisions of the Drugs & Cosmetics Act, 1940, and Rules, 1945, by the state licensing authorities (SLAs) through a system of licensing and inspection. SLAs are legally empowered to take stringent action against violation of provisions of the Act and rules,” Pawar added.
In written representations to the government sent following the show-cause notices, e-pharmacies argued that the notices served by the Drugs Controller General of India (DCGI) to companies was “a cause for anxiety” for the industry.
“The retail pharmacy sector needs a lot of supply chain, technology and access solutions to make healthcare delivery more efficient and affordable, and a prerequisite for this is a simple and clear regulatory pathway for innovation to thrive in this important space,” the Ficci communication read.
“The recent show-cause notice may cause regulatory uncertainty at ground level in several states. Hence, there is a need for direct engagement/dialogue between sectoral players and relevant government stakeholders to avert any further state level market disruptions…,” it added.