This is the second part of a 2-part post authored by Anubhuti Garg, 4th year, and Gourav Kathuria, 2nd year, of NALSAR University of Law. Part I can be found here.

The previous post analysed the laws applicable to e-pharmacies in India. The present post looks at the draft e-pharmacy rules and its implications and suggests ways to ensure the smooth application of the law in India.

Draft E-Pharmacy Rules

On August 28, 2018, the government came out with the Sale of Drugs by E-Pharmacy (Draft Rules) for regulating the sale of drugs through e-pharmacies. These Rules aim to put in place an extensive regulatory regime for e-pharmacies and are important in light of the concerns that e-pharmacies pose. Given below are the salient features of the Rules:

1. According to the Rules the definition of e-pharmacy includes within its ambit sales made through websites as well as through mobile phone apps termed ‘e-pharmacy portals’.
2. Mandatory registration is prescribed for all e-pharmacies and sales have to be routed through specified portals. A registration application must be reviewed within 30 days.
3. Mandatory uploading of prescription by the customer is recommended which must specify the prescribed drugs and quantity thereof. This does not apply to over-the-counter drugs.
4. All generated data must be kept confidential and localized.
5. An e-pharmacy cannot sell drugs covered by the Narcotic Drugs and Psychotropic Substances Act, 1985 or and the restriction extends to those listed under Schedule X of the Drugs and Cosmetics Rules.
6. An e-pharmacy has to comply with the provisions of the Information Technology Act, 2000 and the associated Rules.

Implications of the Policy

Firstly, it will fill the regulation gap that currently exists and will put into place a robust framework to deal with e-pharmacies. Existing laws are inadequate when it comes to addressing the requirements of e-pharmacies, however, the Rules will resolve the issue and prevent misuse of medicines and data.

Secondly, sales of conventional brick and mortar outlets will be adversely affected due to competitive pricing offered by e-pharmacies. Conventional stores may fail to compete with online pharmacies which provide substantial discounts as a result of which offline stores will suffer due to loss of business.

Thirdly, the question of jurisdictional conflicts remains unaddressed as it remains to be seen which law holds the field in case of legal inconsistencies. Several inconsistencies may be spotted in the Draft Rules which need to be resolved if a solution to this issue is to be found.

Impact on the Right to Privacy

Privacy forms an important concern for consumers. There need to be adequate safeguards regarding how the data given by a customer is protected and this warrants heavy regulatory compliances in addition to strict penalties in cases of violations. The recent Aadhar judgment also brought to light numerous concerns regarding privacy which need to be kept in mind when implementing a regulatory framework for e-pharmacies.

The Draft Rules prescribe that e-pharmacies would keep data confidential and localized, however, state and central governments can secure access to the data for “public health purposes”. No criterion is prescribed for what would constitute such a purpose and the Rules also fail to mention which authority can compel e-pharmacies to share health information.  Such ambiguities pose a threat of misuse of data by government.

Further, the Draft Rules come in direct conflict with the draft of the Personal Data Protection Bill, 2018, which allows for the transfer of data outside India where the patient has expressed his/her consent or where the transfer is necessary for prompt action. The conflict between the two needs to be resolved before the Draft Rules can be implemented.

Conclusion

In conclusion, it can be said that the e-pharmacy regime is changing slowly but steadily. The government has taken cognizance of the fact that there are many health concerns surrounding the sale of medicines online and accordingly has formulated a policy which address these concerns. India is taking a step forward in terms of drafting a full-fledged policy exclusively for e-pharmacies; this is sure to make the lives of a lot of citizens easier.

There is no doubt that the proposed Rules are progressive in nature. By making regulations that stand in conformity with global best practices the government is providing impetus to the continued growth of the e-pharmacy industry. However, there exist issues that need to be resolved sooner rather than later, such as the tendency of the government to misuse data and the conflicting nature of its provisions with those of the IT Act, 2000.

India has a long way to go in governing e-pharmacies and there are a lot of loopholes that need to be plugged. Currently, there is no law governing the actions of drug companies and as a result they are operating with little regard to the consequences of their actions. There is a need to bring the Rules into force as quickly as possible, and despite the government’s promise to implement them within 100 days of the elections they are yet to act in this matter.

It is hoped that concerns about consumer privacy are addressed in a more stringent manner by the government and that provisions are put in place which ensure that misuse of the data of the customers is strictly prohibited. The government should address loopholes in the policy and examine how they come into conflict with existing rules and amend them to resolve such contentious issues.