Setback to e-pharmacies as Centre bans online drug sale

In a setback for the companies selling medicines online, India's drugs regulator, on Wednesday, ordered all the states to enforce a court directive prohibiting online medicine sales.

According to a report by Livemint, the Drugs Controller General of India, V.G Somani, in November had directed all the states and union territories to ban the sale of medicines through unlicensed online platforms.

India is yet to finalise regulations for online drug sales, or e-pharmacies, but the growth of several online sellers such as Medlife, Netmeds, Temasek-backed PharmEasy, and Sequoia Capital-backed 1mg has threatened traditional drug-store businesses.

K Bangarurajan, a senior official at the Central Drugs Standard Control Organisation (CDSCO), said the federal agency had asked states earlier this year to comply with the court's order, and a reminder had now been issued to all authorities.

"State drug controllers are the regulating authority, they have to implement this and if anyone is dealing (in online sales) they need to take action," Bangarurajan told Reuters.

The CDSCO's directive was sent on November 28 to all states, according to a copy seen by Reuters. It was not immediately clear what subsequent action states would take.

Trader groups have protested for years against e-pharmacies, saying they challenge their businesses and could allow medicines to be abused by being sold without proper verification. They also allege e-pharmacies make it easier to use one prescription to buy medicines multiple times.

Steep online discounts have also hit offline businesses, which according to industry estimates recorded $18.4 billion in retail sales in 2018-19. Sales growth has averaged only 8.2% a year since 2015-2016 when sales grew by 12.3%.

"Online retailers have been offering discounts more than our margins," said Yash Aggarwal, legal head of South Chemists and Distributors Association in New Delhi.

Some are not worried, however. Pradeep Dadha, CEO and founder of online e-pharmacy Netmeds, said his firm was complying with all Indian laws and regulations and business was continuing as usual.

(With PTI inputs)