Why online pharmacies are now in a legal limbo

30 May 2023 , 09:52 AM

The business environment has undergone a rapid transformation as a result of the growth of the digital economy, which the policy cannot keep up with. The rapidly expanding online pharmaceutical market in India is currently mired in regulatory uncertainty. 

Online pharmacies have sprung up all over India due to the promise of fast scaling up in the digital business. But their future is now in jeopardy because of pushy sales tactics and a murky regulatory environment. The emerging industry now faces the possibility of being shut down.

Online pharmacies not only offer simple access to basic medications but also to medications for serious illnesses that are not always and everywhere offered by offline pharmacies. Medicine will be sold online once most commerce has moved online. However, there are a number of issues with the sale of medications online, particularly since there is no explicit legislation to address them.

Along with major conglomerates like Reliance Industries and Tata Group investing in businesses like NetMeds and 1mg, the online pharmacy market in India is backed by some of the top investors in the world, including Tiger Global, Sequoia Capital, Temasek, and Prosus.

Large players like Reliance Industries and the Tata Group entered the market as a result of the Covid-19 pandemic, and they acquired Netmeds and 1mg, respectively. There are about a dozen large pharmacies in this industry, together with other well-known brands like Amazon, Flipkart, and Apollo. 

Under the aegis of its subsidiary Netmeds, Reliance Retail entered the independent pharmacy store market at the beginning of the year. Two large online pharmacies, Tata-owned 1mg and its competitor PharmEasy, had planned to go offline to have an omnichannel presence to increase their user base less than two years ago.

An organisation of pharmacists has written to the Cabinet Secretary pleading with him to take action and outlaw online pharmacies for flouting regulations and endangering people’s lives. Online pharmacies are charged with exploitative pricing, breaching data privacy, allowing excessive and illogical prescription drug usage, and selling drugs without a valid licence.

The pharmacists call for a ban on online pharmacies since they offer medications without a licence. Online pharmacies cannot, however, be licenced or regulated under existing drug laws because they are not mentioned in them.

Recently, when the DCGI issued show-cause letters, API Holdings, the parent company of PharmEasy, requested the Union Health Minister’s assistance in expediting the publication of the draft rules in order to end any regulatory confusion regarding their existence.

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