By: Probal Bose
The technology disruption has made a significant impact on the pharmacy segment with the online-pharmacy market recording over 700% growth in India in the last four years. Given the nature of the pharmacy sector and the sensitivities involved in matters of consumer health, the dynamics here are slightly different from the e-commerce sector.
We take a quick look at the regulatory framework and key issues involving this nascent sector.
Existing framework for pharmacies:
Presently, pharmacies are regulated under two central legislations, The Pharmacy Act, 1958 (PA) and The Drugs and Cosmetics Act, 1940 (DCA). The PA regulates the profession and practice of pharmacy and provides the framework for licensing and registration of a pharmacist in various states. The DCA and the rules made under the DCA regulate the sale and distribution of medicines and medical devices, stipulating the compliances for conducting the pharmacy business. This ranges from stipulating that specific drugs and medicines may be sold only on production of a valid prescription from a certified medical practitioner to prescribing minimum requirements of equipment, packaging and storage of medicines.
In October 2015, the ‘offline’ medicine retailers across the country protested against online pharmacies for flouting rules. This was followed by a notice in December 2015 from the Drug Controller General of India (DCGI), the regulatory authority under the DCA, calling upon online pharmacy retailers to strictly adhere to the rules framed under DCA as applicable to conventional pharmacies. In July 2016, the Indian Medical Association, a voluntary association of medical professionals, issued a White Paper vehemently opposing online pharmacies in the absence of a dedicated law regulating the sector.
So, is it possible to undertake pharmacy activities through the digital medium? What needs to be done to build in regulatory safeguards to foster efficiencies yet protect consumer health and safety?
Concerns around the e-pharmacy model:
The key concerns surrounding e-pharmacies revolve around some of the following aspects:
Licensing regime for e-pharmacies
As sale and distribution of medicines is possible only through licensed pharmacies, the conservative view is that online sale of medicines may not squarely fall within the provisions of the DCA and the PA unless it is merely to address the aspect of last-mile delivery. There has to be a mechanism for stand-alone online pharmacies to register themselves, subject to meeting specific eligibility criteria. The criteria should include financial strength, reputation/goodwill in the market (of the company and its founders), technological capabilities and infrastructure requirements for storage and record-keeping. Considering the high stakes involved in the e-pharmacy business, the licensing regime has to set fairly high entry barriers.
Sale of restricted drugs and medicines
The regulation of drugs presently depends on the nature of the drug (and the ailment). Over the counter (OTC) drugs can be sold by licensed retailers without any prescription from qualified medical personnel. However, the sale of non-OTC drugs, i.e., ‘restrictive drugs’ or Schedule ‘H’ and Schedule ‘X’ drugs is possible only on the basis of a prescription from a registered medical practitioner. Schedule ‘H/H1’ drugs include potent antibiotics (like anti-tuberculosis drugs), habit forming painkillers and anti-anxiety drugs that induce sleep while Schedule X drugs include narcotics and psychotropic substances. Given the high chances of drug abuse and addiction with the non-OTC drugs, their sale is subject to safeguards on sale, storage and record-keeping. Without a robust authentication mechanism, the ‘click and order online’ format of business may lead to cases of drug abuse, drug misuse and unregulated medication. The regulatory framework also has to ensure that there is no sale of such drugs to minors. Presently, most online pharmacies do not sell such restrictive drugs in India.
With 1 in 7 medicines reported to be sub-standard in the country and 35% of the counterfeit drugs supplied worldwide coming from India, the menace of fake and spurious drugs is a gigantic problem. Given the lack of regulatory framework on the sale of medicines through an online medium, it is a logistical nightmare – right from sourcing of medicines, its storage under controlled conditions, authentication by a registered medical professional to post-sale record keeping requirements. An unregulated online market for sale and distribution of medicines may well promote the spurious drug market in the country. Thus, a stringent inspection and regulatory mechanism is required to ensure transparency in the sourcing of drugs sold online as well as establish quality norms to counter the proliferation of fake/mislabeled drugs.
Mechanism to regulate doctor prescriptions
We have to have a robust mechanism to guard against abuse of prescriptions of medical professionals. Rather than placing reliance on a scanned version of a doctor’s prescription, introduction of a digital verification process (such as a digital signature or Aadhaar or a bar code) for validation of the credentials of the medical practitioners on their prescriptions may help weed out fake/forged prescriptions.
Most online pharmacies may fall under the category of “intermediaries” under the Indian information technology and must therefore follow norms for collection, storage and sharing of personal information. However, that alone may not be sufficient considering the extremely confidential nature of the personal information.
The way ahead for Indian online pharmacies
Presently, most of the online pharmacists operating in India have fairly robust contractual terms and checks and balances to address most of the aspects outlined above. However, there is no regulatory or independent oversight over compliance of these terms. Further, the law mandates pharmacies to adhere to certain standards with regard to storage, packaging, and record-keeping, etc., which may be relatively easier to comply with in case of a brick and mortar store as against the storage facility or warehouse for the e-pharmacy. Some of these consumer health and safety challenges may offset the convenience offered by the online pharmacies.
Going by recent press reports, the Federation of Indian Chambers of Commerce & Industry (FICCI) has come out with a self-regulation code of conduct to build in safeguards for customer health and safety as well as establish an ombudsman to deal with customer grievances in this sector. While further details of the code of conduct are not available in the public domain, it is a positive development while the regulatory framework is being drawn up.