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Relief for pharmacies as Madras HC suspends ban on online drug sales

A single-judge of the court had banned online sale of drugs and cosmetics effective from Thursday.

Gireesh Babu  |  Chennai 

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Online pharma companies have got temporary relief from the Madras High Court, after a division bench, consisting of Justice M Satyanarayanan and Justice P Rajamanickam, suspended a single-judge order banning online sale of drugs and cosmetics, till it gives final order in the matter.

A single judge had ordered a ban on online sale of drugs and cosmetics, which would have came into effect at 10:31 am on Thursday.

Pradeep Dadha, Founder and CEO, Netmeds, said, “We are extremely happy with the Madras High Court order suspending the ban on online sale of medicines. This ruling validates our commitment of providing affordable and accessible medicines to customers across the country. As a fully licensed pharmacy, Netmeds.com is committed to adhering to all the guidelines and standards as prescribed under the Drugs and Cosmetic Act of 1940.”

The development comes after a group of companies in the country early this week approached the Madras High Court with an appeal against the ban on online sales of medicines till the Government of India implements new regulations in the matter.

Six companies and a platform formed by major pureplay online pharmacies had impleaded in the petition filed by the Tamil Nadu Chemists and Druggists Association (TNCDA) before the single judge and most of them today submitted their appeal with the division bench against the order, said sources from Digital Health Platform, the organisation of companies.

There are around 20,000 people working in this sector, in around 10 online pharmacy firms in the country. Around 1.5 million customers buy medicines online and a ban would impact their lives.

The companies have told the Court through the appeal that they are not violating any rules or regulations under the Act. There are two types of online pharmacies -- one acting as aggregators to connect registered pharmcists with the consumer and the other which have their own registered pharmacies and stocks, and sales licences under the existing regulations.

PharmEasy argues that it is an aggregator model and works closely with registered pharmacies that dispense medicine to the customers. The industry is also expecting a new set of regulations under the Drugs and Cosmetics Amendment Rules, 2018, for online sales of medicine to be notified soon.

Online pharmacy firms including 1MG Technologies, Netmeds Market Place, 91 Streets Media Technologies, Medlife International and Practo Technologies were impleded in the case before the single judge.

Last Monday, after hearing the arguments from both, online pharmacies and the trade organisation, Justice Pushpa Sathyanarayana passed an order directing the Central Government to notify the rules in the Gazette not later than January 31, 2019 in the interest of public and the online drug trade. Thereafter, those who trade in on-line pharmacy will have to obtain their licences in the manner prescribed in the rules to be notified, within a period of two months from the date of such notification.

"As the draft rules are framed by the Central Government, after deliberations including the stakeholders, till the aforesaid rules are notified, online traders are bound not to proceed with their online business in drugs and cosmetics," the order had said.

The Court, after the pronouncement, added that the order passed against online sales will not be given effect to till 10.30 a.m. on December 20, allowing time for online pharmacies to appeal.

TNCDA has been arguing that the prevailing regulation has no provisions for selling medicines through online and draft rules for the same is still under consideration, which shows that current sales of drugs online are not legal. It argued that as per the existing regulation, prescription 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.

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, more than 30 startups bying for a piece of the pie. The Indian e-commerce industry is anticipated to grow at a CAGR of over 20 per cent, crossing the $3 billion mark by 2024. Online prices are around 10-20 per cent lower than brick-and-mortar rates.

First Published: Thu, December 20 2018. 18:47 IST
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