This is the first part of a 2-part post authored by Anubhuti Garg, 4th year, and Gourav Kathuria, 2nd year, of NALSAR University of Law. Part II can be found here.
The growth of the Internet and rise of companies like Amazon and Flipkart has meant that e-commerce is rapidly gaining traction in India. A notable emergence in this regard has been that of e-pharmacies, which provide heft discounts and hassle-free deliveries to attract consumers. Their arrival on the scene has been acknowledged by the government which has tried to bring in a draft policy in order to regulate these entities, however it is yet to be implemented. The existing laws are inadequate when it comes to dealing with e-pharmacies and there is an urgent need for new legislation governing the issue which is precisely what the Sale of Drugs by E-Pharmacy (Draft Rules) aim to do.
The present post aims to analyse the laws currently applicable to e-pharmacies in India, and Part II will look at the consequences of implementing the proposed policy. The focus is on highlighting the lacunae in existing laws and providing suggestions with a view to implementing a better solution.
Laws Regulating E-Pharmacies
India does not have a special law dedicated to governing e-pharmacies. Most of the laws which are applicable to e-pharmacies were made at a time when computers did not exist and consequently, they are incapable of addressing the issues faced by e-pharmacies.
Drugs and Cosmetics Act, 1940 and the Drugs and Cosmetics Rules, 1945
The Drugs and Cosmetics Act, 1940 and the Drugs and Cosmetics Rules, 1945 regulate the sale, distribution and storage of drugs and other pharmaceutical products in India. According to the law pharmacies need to necessarily comply with two conditions: first, they need to acquire a license from the state food and drugs authority, and secondly, specified medicines can only be sold on the basis of a prescription provided by a medical practitioner. Recently, a notification passed by the Office of Drugs Controller General clarified that the present law did not distinguish between online and offline pharmacies; which implies that the present Act would govern e-pharmacies as well.
Information Technology Act, 2000
The Information Technology Act, 2000, does not contain specific references to e-pharmacies. In general, any transaction happening on the internet falls within the ambit of the Act and as a result e-pharmacies will be governed by its provisions.
Challenges with the Laws
Firstly, the current laws are inadequate when it comes to governing the functioning of e-pharmacies. For instance, the Drugs and Cosmetics Act and Rules mandate that a physical pharmacy have proper storage facilities for the medicines with special requirements pertaining to hygiene etc. However, in the case of e-pharmacies it becomes very difficult to assess where the medicines are stored or obtained from, which increases the possibility of the medicine being of below the required quality.
Secondly, the possibility of repeated use of prescriptions gives rise to the risk drug misuse and addiction. There is a need to regulate the manner in which e-pharmacies sell these drugs as restrictions applicable to conventional drug stores cannot be applied in the case of e-pharmacies.
Thirdly, there exist pertinent concerns regarding the privacy of online customers and the confidentiality of their data which need to be addressed. This aspect is not governed by any law and storage of customers’ data by e-pharmacies could prove to be problematic in the long run.
Fourthly, accountability of e-pharmacies is an increasing concern as some pharmacies claim that by virtue of their position as “intermediaries” they should not be held accountable for any problems that may arise in the future. Intermediaries are governed by the IT Act and Section 2(w) classifies online market places like Amazon and Flipkart as intermediaries. Section 79 provides them with immunity from liability for third party information provided they conform to the requirements of Section 79(2). Rule 3 of the Information Technology (Intermediaries Guidelines) Rules 2011 makes intermediaries responsible for informing the users about its policies and provides for a redressal mechanism. However, it fails to impose a high enough burden on information uploaded to the portal, as a result of which serious liability cannot be imposed on e-pharmacies.
The picture that emerges is that of inadequate laws governing the functioning of e-pharmacies, with the varied approaches taken by courts posing another problem. The Madras High Court had earlier imposed an interim ban on e-pharmacies, which was later reversed by a division bench order. Similarly, the Delhi High Court had also banned e-pharmacies however this was overturned by the government’s legislation which was upheld in a later order.
It was to deal with the confusion existing over e-pharmacies that the government came up with draft policy, however this is yet to be implemented. The next part will analyse the draft rules and highlight some concerns surrounding the legislation and will attempt to show the way forward for the regulation of e-pharmacies in India.