Legality of Online Pharmacy in India

Pharmacy means a shop or hospital dispensary where medicinal drugs are prepared or
sold1. As per medical dictionary it also means the branch of the health sciences dealing with
the preparation, dispensing, and proper utilization of drugs or a place where drugs are
compounded or dispensed2. However, an online pharmacy, e-pharmacy, Internet pharmacy,
or mail-order pharmacy is a pharmacy that operates over the Internet and sends the orders to
customers through the mail or shipping companies3.
The growth of the Internet has made it possible to compare prices and buy products without
having to leave home. It started with books, gradually moving to gadgets, cars and clothes.
One of the progressive technology models that have evolved in the last few years is telemedicine that has enabled accessibility to the finest doctors at the tap of a button. Another
recent innovation that has positioned itself as an attractive model in the healthcare space is Epharmacy or Online Pharmacy4.
It might include:
i.
ii.
iii.

iv.

Pharmacy benefit manager A large administrator of corporate prescription drug plans

Legitimate Internet pharmacy in the same country as the person ordering.
Legitimate Internet pharmacy in a different country than the person ordering. This
pharmacy usually is licensed by its home country and follows those regulations, not those
of the international orders5.
Illegal or unethical internet pharmacy. The web page for an illegal pharmacy may contain
lies about its home country, procedures, or certifications. The "pharmacy" may send

1 Definition of pharmacy as per Cambridge dictionary.

2 Available at http://medical-dictionary.thefreedictionary.com/pharmacy, last visited on 28/08/2016.
3 Available at https://en.wikipedia.org/wiki/Online_pharmacy, last visited on
12/05/2016.
4 FICCI Stakeholders Consultation on Online Sale of Drugs and Medicines, available at
http://ficci.in/spdocument/20602/FICCI-Representation-to-DCGI-Final.pdf, last visited on 11/05/2016
5 Supra note 3

outdated (expired shelf life) or counterfeit medications and may not follow normal
procedural safeguards.6
An online pharmacy sounds convenient; no waiting in queues, no rushing to the pharmacy
before it shuts shop for the day, placing the order is easy, moreover, the order can be placed
any time of the day and the medicines are conveniently delivered via courier at your
doorstep. Yet, this convenience comes at a price. Not only there may be financial
implications for the patients, their safety may even be endangered at times. 7 The online
pharmacy may have its own cancellation policy and may not refund or only partly refund the
amount paid upon cancellation of the order or even non-delivery of an order. Unlike the local
neighborhood pharmacy or the hospital pharmacy, the patient does not have access to a
pharmacist if he/she has any questions about a medicine.8
Models of E-pharmacy or Online Pharmacy
Presently there are three models of online pharmacy that exist in Indiaorganised,
unorganised and illegal. These three models of E-pharmacy or online pharmacy have been
misunderstood and used interchangeably9. A common misconception behind the authenticity
of operations of an e-pharmacy is prevalent because there is skeptical knowledge behind the
legal business models vis a vis the illegal international trade of drugs online10. Clearly, model
under organized e pharmacy has scope of adding value to the ecosystem. While the
unorganized and international trade models need to be controlled, it is important to enable
and support the organized model which has tremendous benefits and opportunity to create
significant innovation.11
6 Available at https://en.wikipedia.org/wiki/Online_pharmacy, last visited on 28/08/2016.
7 IMA White paper on Online Pharmacy, available at http://www.ima-india.org/ima/left-side-bar.php?
scid=324, last visited on 02/06/2016.
8 Ibid.
9 FICCI Stakeholders Consultation on Online Sale of Drugs and Medicines, available at
http://ficci.in/spdocument/20602/FICCI-Representation-to-DCGI-Final.pdf, last visited on 11/05/2016
10 Available at http://businessworld.in/article/Organised-E-pharmacy-Increases-SafetyTransparency-/14-06-2016-99147/, last visited 29/08/2016.
11 Supra note7

1. The Organized e-pharmacy12: There are two models which operate in this category. One
is a market place model where a technology company connects neighbourhood licensed
pharmacies to the end user. Other is an inventory based model where E-pharmacy is an
online service of an offline licensed pharmacy 13. In other words this either connects
neighborhood licensed pharmacies to the end user or it operates as an inventory-based model
where e-pharmacy is an online service of an offline licensed pharmacy.
In an Organized Pharmacy, every order that is received is verified and checked by a team of
registered pharmacists. Drugs requiring a prescription medicine are checked for a copy of the
prescription. The validity of the prescription is checked as the set format. The medicines are
dispensed by registered pharmacists in a licensed premise in a sealed tamper proof pack.
Without a prescription the medicines are not dispensed. With the most advanced technology
aligned with their processes, they keep track of each and every order.
Drugs that do not require prescription from a medical practitioner or are sold over-thecounter ("OTC Drugs") are even better administered in Organized Pharmacy. Given that
OTC Drugs can be sold by any person holding a 'Restricted Drug License' and does not
require involvement of a registered pharmacist, such persons should be allowed to sell OTC
Drugs online as long as they hold a valid license14. The Drugs and Cosmetics Act does not
cover all loopholes and we also need a clearer definition of OTC (over-the-counter) drugs to
make e-commerce of drugs a safer and viable option.15
2. Unorganized e-pharmacy: In this model prescription medicines are ordered without any
validated prescription16. There is no check on the genuineness of the order due to absence of
qualified pharmacists. Also improper record keeping and no audits is a major area of
concern17.

12 In this model companies which are adhering to all the rules and regulations put forth by the
government taking into account proper record management as well as validation of all prescriptions
uploaded on their platforms.
13 Supra note 8
14 Supra note 7
15 Available at http://www.livemint.com/Politics/9hMPyMKYHTJSu5VVPRJmWO/Government-gearsup-for-epharmacies.html, last visited on 29/08/2016.

3. Illegal International trade through E pharmacy: Drugs being shipped across the
international borders without any prescription and approval from the concerned authorities. 18
This is generally used to order cheaper version of drugs like Viagra19.

Benefits of E- Pharmacy for the Patients

1. Consumer Convenience and access: The E-pharmacy can be very convenient and
significantly improve the access of medicines for the patients. This will be pertinent with
increasing nuclear family concept, working couples, increasing number of elderly population
and urban development in periphery of the metro cities20. The access of medicines is difficult
for a significant number of people in the country, especially when one is sick
2. Improved Availability: Offline pharmacies can only keep limited inventory, resulting in a
patient visiting multiple stores to get his or her medicine. With the use of technology and
access to Inventory of multiple stores at a time an E-Pharmacy concept can significantly
improve the availability of the drugs.21
3. Enhanced Services of the Pharmacist and Pharmacologist: The E- pharmacy can
enhance the services of the pharmacist. Routine questions about medication can be answered
by online pharmacists using e-mail or other real-time chat options. Knowledge of a patients
diagnosis, results of laboratory tests, and established drug monitoring parameters, largely
unavailable to pharmacists at present, could be made accessible through the Internet.
Digitally, very important information can be provided to help a patient learn more22.

16 Available at
http://economictimes.indiatimes.com/industry/healthcare/biotech/pharmaceuticals/h
ow-e-pharmacy-can-empower-consumers/articleshow/47418472.cms, last visited on
30/08/2016.
17 Ibid
18 Supra note 12
19 Supra note 14
20 Ibid
21 Ibid

4. Data records and Analytics: All medicine purchases can be tracked - effectively reducing
the problem of drug abuse and self-medication. The records of patients name and address of
delivery can be tracked. Online pharmacies can store and analyse large amounts of data on
consumers across the nation which can be very useful for planning public health policies
5. Patients Compliance and Education: E-pharmacies have the technology infrastructure to
provide value added information to consumers, such as precautions, side effects and
information on cheaper substitutes. The more aware consumer will always benefit from the
power of knowledge, which is easily distributed through the electronic medium. Using
Medication reminders the compliance of the patients can be improved23.
6. Transparency in the system and consumer education: Patients can compare the prices
of affordable equivalents and can discuss with their health care provider. All the transactions
will be digitally stored so making it easy to track the supply chain therefore decreasing the
risk of counterfeit medicines24. Also online pharmacies have the technology infrastructure to
provide value added information to consumers, such as drug interactions, side effects,
medicine reminders, and information on cheaper substitutes. The more aware consumers will
always benefit from the power of knowledge, which is easily distributed through the
electronic medium.25
7. Medicine Authenticity: With full tracking systems and solid technology backend,
counterfeit medicines can be traced back to the channel/ manufacturer/ supplier thereby
making the market a lot more transparent and ensuring authenticity is strictly maintained26
8. Transaction records: Organized online players would have systematic records for all
transactions, with full taxes paid on each transaction. A great benefit to the state considering
the size of the market.27
22 Supra note 5
23 Ibid
24 Ibid
25 Available at http://economictimes.indiatimes.com/industry/healthcare/biotech/pharmaceuticals/how-epharmacy-can-empower-consumers/articleshow/47418472.cms, last visited on 30/08/2016.
26 Supra note 5

Law on Online Pharmacies in India

There are no well-defined dedicated laws for online pharmacies in India like US or UK.
Pharmacies in India are governed by the following acts28

The Drug and Cosmetics Act 1940,

The Drugs and Cosmetic Rules 1945,
The Pharmacy Act 1948 and the Indian Medical Act 1956.

The Information Technology Act, 2000 defines and governs the law relating to ecommerce in
India. According to Indian laws, a chemist can dispense prescription drugs only on the
prescription of doctor. A prescription requires the name of the doctor, his /her address and
registration number besides the name/s of the drug/s, their potency, dosage, and duration for
which the drugs are to be supplied. The chemist cannot dispense quantity in excess of what
has been prescribed by the doctor. Before dispensing the drugs, the pharmacist is expected to
verify the completeness, authenticity and legality of the prescription29.
Even over-the-counter (OTC) drugs can be sold only by licensed retailers. The major issue of
concern is that prescription drugs cannot be sold online. There are provisions in the various
acts mentioned above regarding the same.
As per Indian Pharmacy Act, 1948, No person other than a registered pharmacist shall
compound, prepare, mix, or dispense any medicine on the prescription of a medical
practitioner.30 It also states, Whosoever contravenes the aforesaid provisions shall be
punishable with imprisonment for a term which may extend to six months, or with fine not
exceeding one thousand rupees or with both.31

27 Ibid
28 Supra note 4.
29 Ibid.
30 Subsection 1 of section 42 of Indian Pharmacy Act 1948
31 Subsection 2 of section 42 of Indian Pharmacy Act 1948

Online availability of prescription drugs will violate provisions of various acts like Pharmacy
Act, Drugs & Cosmetics Act. The Act 32 prohibits import of any drug that is not of standard
quality, any misbranded, adulterated or spurious drug or any drug for requires a license for
import. It also does not permit import of any drug which by means of any statement, design
or device accompanying it or by any other means, purports or claims to cure or alleviate any
disease.33 Imported medicines may be fake, mislabeled and unsafe.
Likewise it also prohibits manufacture and sale of any drug without a license 34. It has
provisions for penalty for manufacture, sale, etc., of drugs in the form of imprisonment and
monetary fine35. It very clearly states in subsection b(ii) without a valid licence as required
under clause (c) of section 18. Recently, an FIR was filed against Snapdeal.com by
Maharashtra FDA for allegedly selling drugs, including prescription drugs, online for
violating provisions of the Drugs and Magic Remedies (Objectionable Advertisements) Act,
1954 and directly contravening Section 18 (c) of the Drugs and Cosmetics Act, 1940, which
prohibits manufacture and sale of certain drugs.36
The Drugs and Cosmetics Act, 1940, and the Drugs and Cosmetics Rules, 1945, have clear
guidelines on the sale of Schedule H and Schedule X drugs, which are restrictive drugs and
can be sold only on the prescription of a registered medication practitioner. Schedule X
drugs include narcotics and psychotropic substances. Chances of drug abuse and addiction
are higher with these drugs. They also require meticulous storage and dispensing records.
The prescription has to be in duplicate, one copy of which is to be retained by the licensed
pharmacist for 2 years37.
Schedule H1 of the Drugs & Cosmetic Act 1945 mandates a licensed pharmacist to maintain
a separate register for sale of drugs that are specified in Schedule H1 with details of the
patient, doctor and the name of the drug/s including quantity; it is to be kept for three years
32 Section 10 of the Drugs & Cosmetics Act 1940
33 Ibid
34 Section 18 C of the Drugs & Cosmetics Act 1940
35 Section 27 of the Drugs & Cosmetics Act 1940
36 Available at http://www.livemint.com/Politics/9hMPyMKYHTJSu5VVPRJmWO/Government-gearsup-for-epharmacies.html, last visited on 29/08/2016.
37 Supra note 5

and is open to inspection by regulatory authorities. Schedule H1 mainly includes potent

antibiotics (like anti-tuberculosis drugs), habit forming painkillers like Tramadol and antianxiety drugs that induce sleep.38
Schedule H1 drugs are also required to have special labeling, with symbol Rx in red to be
clearly displayed on the left top corner of the label and a box warning with a red border - It
is dangerous to take this preparation except in accordance with the medical advice. Not to be
sold by retail without the prescription of a registered medical practitioner.

Pros and Cons in regulating e-pharmacy

Online pharmacies may not abide by these regulations and bypass them. The objective of
Schedule H1 was primarily to check the indiscriminate use of antibiotics in India, in view of
the rising incidence of multi-drug resistant bacteria, a serious public health issue worldwide.
Easy access to antibiotics via online pharmacies will defeat this very purpose.
The Drugs and Cosmetics Act has no provisions for online sale of medicines, or home
delivery of medicines. Hence, online sale of medicines cannot be legally permitted.
The prescriptions submitted via fax/email may be fake and it could be difficult to verify their
authenticity. Online correspondence and/or scanned copies are legally not permitted. Online
pharmacies will promote drug abuse, drug misuse, self-medication etc. Any mediation taken
without the supervision of doctors may be dangerous and even potentially life-threatening.
Pharmacists are not allowed to accept and dispense prescriptions that are brought in by
children. Online pharmacies will provide easy access to controlled drugs or even street drugs
to this vulnerable group.
MCI Code of Ethics 39stipulates that pharmacists and doctors should work together. If online
pharmacies are allowed, then this relationship will be lost.
Many online pharmacies may be operating without the appropriate license. This increases the
chances that drugs sold by such unlicensed pharmacies maybe counterfeit, substandard, or
adulterated and therefore risky to the patient. There are no checks in place to make sure that
the drugs sold by online pharmacies are not spurious.

38 Ibid
39 Regulation 5.3 of MCI Code of Ethics

Medicines have to be stored properly as recommended by the manufacture. Exposure of

medicines to high temperatures in storage or in transit could diminish their efficacy and are a
potential health risk. There is no way to check the storage conditions of the drugs sold by the
online pharmacies.
Regulatory authorities continue to monitor a drug for any adverse effect even after it has been
on the market. If the safety/quality of the medicine comes under question or, if it is
potentially contaminated, mislabeled or is improperly packaged, then they may recall or
withdraw a prescription or OTC drug from the market even after it has been approved.
Sometimes, the manufacturer may voluntarily recall a drug. If online pharmacies are
permitted, the drug recalls become very, very difficult, almost next to impossible.
Breach of confidentiality is another major concern. Online pharmacies may misuse personal
and financial information of the patient as well as of doctors leading to cases of identity
thefts and fraud.40. MCI Code of Ethics 2002, also does not allow a registered medical
practitioner to disclose the secrets of a patient that he/she may have been learnt in the
exercise of his / her profession. Declaration (g) given to doctors at the time of registration
states: I will respect the secrets which are confined in me. 41There is no legislation specific to
data privacy in India as yet. The laws that deal with data protection or privacy in India are
Section 43A of the Information Technology Act, 2000 and the Information Technology
(Reasonable Security Practices and Procedures and Sensitive Personal Data or Information)
Rules 2011. There is a proposed Privacy (Protection) Bill, 2013 (Bill), which focuses on
the protection of personal and sensitive personal data of persons. If passed and enacted, it
will override all existing provisions directly or remotely related to privacy.42
Online pharmacies offer drugs at low cost or at discounted prices to lure customers. If the
online pharmacy gives cheaper alternatives of drug/s prescribed, this violates the doctorpatient-pharmacist relationship, which is based on trust. Pharmacy laws in India do not allow

40 The WMA 2005 Declaration of Lisbon on the Rights of the Patient gives them the
right to confidentiality, which states that all identifiable patient data must be
protected.
41 Regulation 7.14 of MCI Code of Ethics 2002
42 Ssection 3 of the Privacy (Protection) Bill, 2013 provides that no person shall
collect, store, process, disclose or otherwise handle any personal data of another
person except in accordance with the provisions of this Act and any rules made
thereunder.

a pharmacist to substitute a brand written by a doctor. Pharmacists are also not authorized to
change potency of the prescribed drug, even if the patient asks for it.
Refilling of a prescription is not allowed by pharmacists unless authorized by the doctor. If
the doctor has prescribed a drug, e.g., 3 days, the pharmacist cannot dispense drugs for more
than this duration.
Online pharmacies may provide rebates and commissions to doctors to provide prescriptions
on the basis of online information that has been filled by the patient. This way doctors will be
vulnerable to malpractice suits. Regulation 6.4 of MCI Code of Ethics prohibits doctors from
giving or receiving any rebates or commissions.
Similar to the online search service Justdial.com, online pharmacies may also promote doctor
substitution, which is unethical. Ultimately online pharmacies will be taken over by
MNCs and Indian laws are not applicable to MNCs.
Indian Medical Association is against online pharmacies in India. This will encourage
substitution of cheaper and spurious drugs by the online stores and the doctor-patient
confidentiality will be affected. And, will be a violation of all the laws quoted above. It will
deny the patient the supervision of the Doctors in the use of medicines. This will encourage
patient to use one prescription repeatedly without the supervision of the Doctor. This can
cause many adverse drug related reactions, it will encourage drug abuse and overuse of habitforming drugs. The medico-legal liability will still fall on the doctor, when a patient misuses
this facility. The service of online pharmacy will be utilized by affluent and educated people.
Hence online pharmacy has no public health benefits or implications; but at the same time it
is loaded with scope for misuse, drug abuse, dependence and adverse reactions.

Recent Controversies of Online Pharmacy Business

The business of online pharmacy is $18 billion market set to grow to $55 billion by 2020 and
its finally beginning to get the kind of attention from investors and entrepreneurs those
numbers warrantdespite uncertainty over the legality of the business itself. It all started in
April 2015 when the Maharashtra state drug control department (Maharashtra FDA) raided
the warehouse of one ecommerce giant, and sought to file a criminal case against its CEO.
Maharashtra FDA alleged that prescription drugs were being sold through the e-commerce
company without a prescription. Around that time, Maharashtra FDA also raided the
operations of 27 online pharmacies. The drug control departments of other states followed
suit. Gujarat state drug control department raided the office and warehouse of a major online
pharmacy. The Karnataka state drug control department cancelled the licences of two major
firms for the online sale of drugs without prescription. And the Telangana state drug control
department reportedly banned the online sale of drugs. In the immediate aftermath of these

events various drug control departments, the major players in the online pharmacy space
united and released a white paper, which made the case for the lawful operation of online
pharmacies in a regulated environment. The said white paper was released in the presence of
the government authorities. Since then, a number of players have also submitted their formal
representations in an individual capacity to the Government of India. Meanwhile, Indias top
drug regulation recommendatory body, the Drug Consultative Committee (DCC), met in
July 2015 to lay out a roadmap for developing a regulatory regime for online pharmacies in
India. The DCC constituted a sub-committee to review existing regulations in India and
abroad, and asked the subcommittee to propose a new framework for the regulation of online
pharmacies in India. The sub-committee invited comments and suggestions from
stakeholders and the general public; the consultation period ran until 31 October 2015.
MUMBAI, JAN 6:

Online pharmacies continue to operate with the latest circular from the Drugs
Controller General of India (DGCI) not imposing any ban but only seeking strict
adherence to the Drugs and Cosmetics Act and Rules.
The circular dated December 30, a copy of which was seen by BusinessLine, has nowhere mentioned any
temporary or permanent ban on these e-pharmacies, which act as a marketplace for offline medical stores.
These online players do not directly sell any medicines.
The notice sent to various State FDAs states that there should be a strict vigil on the online sale of
medicines. Prashant Tandon, founder of 1mg (formerly Healthkartplus) said: We do not stock any
medicines but get them fulfilled to our customers only after they upload the prescriptions. The fulfilment
is done by the local stores present on our platform. We abide by all guidelines and have taken all
measures, wherein customers cannot even search for any sensitive medicines or schedule X medicines
such as sleeping pills and drugs falling under narcotics, MTP kits or erectile dysfunction medicines.
He further added that the circular does not specifically mention the kind of violation, and hence, there is
no clarity on the same.
The Drugs and Cosmetic Rules, 1945, under which the circular has been issued, regulates the sale and
distribution of drugs in the country and does not distinguish between conventional and over-the-Internet
sale of drugs. However, in the recent past, a few trade bodies of offline pharmacies have filed complaints
stating that online medical stores are violating provisions under the Act.
Dharmil Sheth, Founder of PharmEasy, a Mumbai-based online marketplace for small mom and pop
medical stores, said: I strongly feel it is a fight between the big organised players and small stores, who
empowered with technology, are giving tough competition to the large players. There have been
violations in the offline space too. For example, a drug such as Crocin also needs a prescription, but no
one asks for it.

Netmeds.com, another online player based out of Chennai, also is an aggregator of both organised and
unorganised retailers. Its founder Pradeep Dadha said the company fully complies with all the rules stated
by the Drugs and Cosmetics Act and does not allow any fulfilment of medicines without a proper
prescription.
Meanwhile, a few industry experts tracking online retail are of the view that offline players could be
miffed with the fact that online players offer better pricing with about 10-20 per cent discount, thus
leading to the growing popularity of these sites. There are 15-20 odd online players who have come up in
this space in the last few years.
In October last year, the All India Organisation of Chemists and Druggists (AIOCD), an umbrella body of
over eight lakh druggists and chemists, went on a nationwide strike to demand action against the illegal
online sale of medicine.

Online pharmacies laws in India are still in nascent stage and there are no
dedicated online pharmacy laws in India. The Information Technology Act 2000 governs some of
the legal issues pertaining to online dealings but it is silent on the aspect of online pharmacy. As a result,
illegal online pharmacies have been increasing in India.[1] If properly regulated, Online pharmacies in
India could prove beneficial to various stakeholders.[2]

Contents [hide]
1Deficient Indian Laws
2

Recent Developments

Medicines Exports

Needed Regulations

See also

References

Deficient Indian Laws[edit]

The Drugs and Cosmetics Act, 1940, and the Drugs and Cosmetics Rules, 1945, have guidelines on the
sale of Schedule H and Schedule X drugs. These can be sold only on prescription and there are specific
rules, including for labelling. As most of the online pharmacies in India are not complying with Indian
laws and the laws of other jurisdictions, they have been facing regulatory sanctions.[3] Media reports
claim that some of the online pharmacies are even controlled by organised criminal networks.[4]

The anti-narcotics cell (ANC) of India has witnessed widespread addiction and rampant sale of a new
chemical drug, MD ( chemical mephedrone), that can be bought online from online pharmacies without
any restrictions. ANC is expecting an amendment in the Narcotics Drugs and Psychotropic Substances
Act (NDPSA) of 1985 to tackle this nuisance.[5]

Recent Developments[edit]
Patients would be able to book online a bed in All India Institute of Medical Sciences (AIIMS) very soon.
[6] The King George's Medical University (KGMU) of India is in the process of preparing an inventory of
all generic medicines available across the country. Once the list is ready, it would be uploaded on the
patient information management system and prescription would also be issued online and any medicine
other than the one in the inventory will not be accepted by the system.[7] India is also promoting the
traditional medicines and practices of Ayurveda, yoga, naturopathy, Unani, Siddha and homeopathy.[8] A
telemedicine application has also been launched that connects patients in remote clinics with the doctors
in tertiary hospitals via a video conference, launched through BlackBerry Messenger. The doctor then
performs live face-to-face consultation for the patient by means of a video session.[9] These
developments show that online pharmacy related legal issues would also be taken up by Indian
government very soon.

Medicines Exports[edit]
India medicines are also exported and United States has taken a tough stand against Indian medicines
supplied through online pharmacies. In 2014, The U.S. FDA, in partnership with other federal and
international agencies, took action against websites, some based in India, that were selling drugs to U.S.
consumers against U.S. laws.[10]

Needed Regulations[edit]
Online pharmacies in India must be adequately regulated so that they could prove beneficial to various
stakeholders.[2]

Online pharmacies in India have significantly increased due to growing E-commerce in India. An online
pharmacy is an Internet-based vendor of prescription drugs, and the term encompasses both legitimate and
illegitimate pharmacies. Online pharmacies have been increasing in India, with the rise attributed to little
regulation of the industry.[1] The Maharashtra Food and Drugs Administration (FDA) has also raided 27 online
pharmacies located in Mumbai, Thane and Pune and seized drugs worth Rs. 2 Crore. [citation needed]

Technology can help in meeting the healthcare objective of India. [2][3][4] Indian government is planning to spend
Rs 500 crore on computer literacy project for 50 lakh people over a period of 3 years. This would help Indian
citizens to access government services in the fields of e-education, e-health and e-governance. [5]Healthcare
providers in India are also expected to spend $1.1 billion on IT products and services in 2014. [6]
Contents
[hide]

1Legal status in India

2Legal actions in the United States

3See also

4References

Legal status in India[edit]

The Drugs and Cosmetics Act, 1940, and the Drugs and Cosmetics Rules, 1945, have guidelines on the sale
of Schedule H and Schedule X drugs. These can be sold only on prescription and there are specific rules,
including for labelling and bar coding.[7]
It appears that electronic prescriptions should be valid especially in the light of the Pharmacy Practise
Regulations of 2015 declared by Pharmacy Council of India in January 2015. In these regulations,
Prescription is defined by regulation 2 (j)[3] means a written or electronic direction from a Registered
Medical Practitioner.[8] On basis of existing regulations it appears that a scanned copy of prescription will
be perfectly considered as a valid prescription. However, whether such electronic prescriptions can be used to
buy medicine from online pharmacies has been questioned.[9]

Legal actions in the United States[edit]

The FDA believes that many selling illegal pharmaceutical products without prescriptions are controlled by
organised criminal networks.[10] In 2014, The U.S. FDA, in partnership with other federal and international
agencies and technology companies like Google, took action against websites, some based in India, that were
selling drugs to U.S. consumers.[11] Mail Order pharmacies are regulated by the federal laws of the US [12] and
hundreds of them operate legally in the US. ICANNand U.S. regulatory authorities are also engaged in hot
debate about blocking and seizing of illegal online pharmacies websites that ICANN is not very much
interested in doing these days. [13]

I am founder & CEO of http://BookMEDS.com, an online pharmacy based out of Hyderabad. We are
angel funded and have spent considerable amount of time researching on this subject. Below are the
details:
There is lot of material on internet regarding legality of online pharmacies in India. Most of this
material is written by amateurs who do not have much understanding of Indian Law. Also, online
pharmacy is a very generic word that can be interpreted in many ways. Prior to founding
BookMEDS, we consulted several lawyers including lawyers who have experience at Supreme Court
regarding the same. We wanted to identify clear-cuts rules as per Indian laws and regulations.
Following are the key points highlighted by our lawyers:

Laws for Pharmacies in India are derived from Drug and Cosmetics Act 1940, Drugs
and Cosmetic Rules 1945, Pharmacy Act 1948 and Indian Medical Act 1956. Apart from
this, there are few high court judgments that have provided further insights and
interpretation of the laws.
Indian Laws related to pharmacies were written prior to arrival computers, let alone
internet.
India doesnt have any concrete laws defined for Ecommerce Companies. The only laws
related to internet in India are defined under Information Technology Act, 2000. As per
several media a report, Indian Government is currently drafting new set of laws for
Ecommerce companies.
After analyzing the various laws, our lawyers have come up with the following zones
for online pharmacies in India. Below, GREEN ZONE refers to activities that are legal
under Indian Laws, GREY ZONE refers to activities that are uncertain under current
legal system and RED ZONE refers to activities that are illegal. An online pharmacy
must operate under GREEN ZONE.

Green Zone:
Following items are allowed as per Indian Laws:

Medicines can be sold only by a registered pharmacy that has retail license. The
pharmacy should have a registered pharmacist on payroll.
It is mandatory for the customer to have a prescription for the medicines he/she is
ordering. Over the Counter products can be sold without prescription.
Orders can be taken from the customer either over the phone or internet only from the
areas where the pharmacy retail license applies. For example, if the pharmacy has
license is issued by Telangana State Government, orders can be taken over phone or
internet only in Telangana State.

All the medicines that go out for delivery has to be verified and certified by the
registered pharmacist.

Grey Zone:

Rules related to shipping medicines from one state of India to another arent clear.
Every state has a Drug Department that grants license for certain medicines to be sold
within a state. There is a possibility that, certain medicines valid in one state might not
have license in another. Hence, there is ambiguity regarding shipping of medicines from
one state to another.
There is ambiguity in the Indian law whether a pharmacy is allowed to take money prior
to delivery of medicines. Certain provisions of the law mandate, money to be collected
from the customer only after medicines are physically handed over to the customer.

Red Zone:

Exporting medicines outside of India directly to the customers (patients) is highly

regulated. There is no provision in the Indian law to recognize the prescription written
by the foreign doctor. (Note: India is one of the largest exporter of medicines but these
exports happen to authorized agencies with the approval from the Drug departments of
respective countries)
Selling Schedule X medicines to customer without prescription is a crime. Proper
customer record including name of the patient, doctor and address needs to be
maintained for every Schedule H and Schedule X medicines sold by the pharmacy.
Selling medicines to minors (under age 18).
Selling banned drugs/medicines i.e. selling any medicine that is not approved by the
States Drug Department.
Selling medicines at cost higher than MRP unless customer is upfront told about
delivery or service charges.

Based on the above analysis, we decided to operate BookMEDS in the green zone, which has legal
basis as per Indian Laws. We will soon be releasing a white paper on future of pharmacies in India,
especially online pharmacies.

There are 6 primary factors that have inhibited the growth in this sector:
1. Regulation & its understanding: The Drug & Cosmetics Act is from the 1940's. No surprise that
the online model was never contemplated. However, what this means is that the ePharmacy is also
under the purview of the existing Act. As per the Drugs and Cosmetics Act, there is no concept of
digital prescriptions. While as per the recent IT act, digital documents have full legal sanctity and this
Act takes precedence over all other acts where digital documents are in question, the fact is that the

bible for drug controllers (Drugs and Cosmetics Act) is enforced by inspectors who do not always
understand/ recognize the provisions of the IT Act. Additionally given that the regulation is a Central
as well as a State license subject under a very entrenched system of inspectors and controllers, it is
common to see different interpretations and views taken in different neighborhoods. A consistent and
clear interpretation of the rules, or rather a clear explanation of the law to all officials is required.
2. Different standards for online vs offline: Everyone knows how pharmacies operate in India.
Most do not have a pharmacist on premises, they generally do not ask for prescription, dispense
without bill and substitute medicines openly. However, an organized player should and is expected to
adhere to all key provisions of the letter of the law (simply because the size of the organized player
makes it more visible both to the law makers and also to the fragmented market). In such cases, if
the offline context was equally enforced, then transactions would move online at a much faster pace.
3. Lack of Technology: This industry is a bit like agriculture: very small operations that are unable
to leverage the economies that come with technology (like tractors in small fields), since technology
used to be expensive in the past. This is critical for this industry to grow. Most pharmacies do not
have basic inventory management systems, do not have online presence etc. and as a result are illsuited to scale or support an at scale player.
4. Vested Interests/ Lobby groups: This industry is heavily unionized and the industry association
of pharmacies actively opposes any new models. This group blocks new entrants into the ecosystem,
stifles price competition and actively dissuades pharmacies from working with ePharmacies. The
small vendors do get scared making it a challenge to find partners). If this were a free market, all
good pharmacies who want to grow their business would love to work with any scale player (or scale
their own business).
5. No Parallel examples in evolved markets: For multiple reasons, US/ Europe did not see
significant ePharmacy models. While the context of operation, the pain points and quality of
organized competition is very different and mobile has really changed the game; the model in India
needs to be made to solve local problems. There is no model to copy-paste from the west and hence
investors have been hard to come by. However, this is starting to change.
6. Structural opacity for the consumer: Unlike a few other sectors, when it comes to healthcare, a
consumer is not used to choice in this sector. Too many middlemen, too much opacity and very little
reliable information make the consumer a follower, and he/she does not demand quality in the same
way as one would for food or entertainment or any other sector. Hence not much has happened to
drive innovation. This is changing - and at a hearteningly rapid pace. As transparency and
understanding evolves, people will demand service and the ecosystem will have to deliver
Net Net - Spring is coming! :)

Almost everything that had been holding this sector back is getting solved (by a variety of players)
and we are hopeful that there will be massive innovation in the coming years in this sector!
Written 30 Jun 2015 View Upvotes

Ankit Dudhwewala, Co-Founder @ SoftwareSuggest.com

18k Views

Saurabh Garg , margins is there. The retailer margin in pharma prescription is 20% and the stockiest
margin is 10%. if one becomes both the stockiest and the retailer, a 30% margin is sure. To add to it,
medicines has a lot of deals. Like, the retailer may get 1 free for every 9 units it buys. The deals go
upto 1 free on 1.
As for urgency, chronic diseases like diabetes, asthma, blood pressure, arthritis, thyroid etc will be
the money spinner for pharma companies in about 5 yrs time. Meds for such diseases usually don't
have urgency as the intake is well planned. These meds are also expensive hence even 15% discount
will make sense to the customer.
However as you have said, the regulations are constraint in online pharmacy in india.
Besides what you have mentioned, according to the Indian law, prescription drugs can only be issued
on seeing the prescription of doctor by the retailer in presence of its chemist. Also the bill the retailer
gives the patient should have the license no. and name of the doctor. to add to it, the drug supplied
should not be in excess of the quantity mentioned by the doctor.
These issues actually make it difficult to run an online pharmacy. If a person wants to order, he/she
will have to send a scanned copy of the meds to the online pharmacy for starter.
Add to it, the retailers association is so strong , that only time will tell the issues.
Updated 31 Dec 2011 View Upvotes

Saurabh Garg, certified #fail

14.1k Views

Here are a few reasons.

1. Regulations. You may be surprised but India has you laws on pharmacies and such. Although no
one enforces those laws but the laws are a huge detriment. You need to have a trained and registered
pharmacist on the shop at all times. You need to have some 20 licenses, including one from the state
medical association etc. So, you need a strong legal expert on your side even before you setup one.
2. Immediacy. Most of the times, people would need medicine at a very short notice. And most
doctors and hospitals are surrounded by multiple pharmacies. So if you are going to see the doctor,
it's not really convenient to actually pick the medicines on the way.
3. Internet. I don't think Internet is a deterrent. People are very comfortable in buying things online
now.
4. It may work if you club pharmacy and daily household stuff. So what if I order a Disprin and a
talcum powder together?
5. Risk. People still have that, touch/feel issue. And especially with their health, they may not
compromise.
6. Misc things. Like ticket size. It costs about 30 bucks to deliver something in a city. To make
money on it, I must have an order that is above 300. Then issues like inventory control. Then I am
not sure what kind of discounts is available on drugs. Then how do I go about delivering prescription
drugs? It would be interesting to know the percentage of prescription and OTC drugs used in India.
There are many more factors but IMHO the top four are the ones that I have listed above.
But seems like a very good idea. Ripe to be executed. Just need someone to execute it well. All the
best.
Updated 25 Jan 2013 View Upvotes

Yashu Kapoor, Just brainstorming!

2.3k Views

This market is ready to be disrupted and evolution is bound to happen.

Standing at 1 bn usd+ pharma retail market of india is the most lucrative segment.
I am already riding on the wave with Indias 1st e-pharmacy for chronic patients :Pillofy, we have
created a exclusive pharmacy network for chronic illness helping people with BP, Diabetes, Cancer

manage their disease more effectively.

With Personalized Medicine Reminder Service: Medi Alert service and Pillofy service, we ensure
that you never ever run out of medicine and take your medicines on time to ensure your speedy
recovery!
What we do here is we screen and select our registered chemists and then empower the registered
retail chemists to leverage the online growth channels and evolve with the transformation. So, far we
have received great demand and cooperation from our sellers as well as our customers.

There are 6 primary factors that have inhibited the growth in this sector:
1. Regulation & its understanding: The Drug & Cosmetics Act is from the 1940's. No surprise that
the online model was never contemplated. However, what this means is that the ePharmacy is also
under the purview of the existing Act. As per the Drugs and Cosmetics Act, there is no concept of
digital prescriptions. While as per the recent IT act, digital documents have full legal sanctity and this
Act takes precedence over all other acts where digital documents are in question, the fact is that the
bible for drug controllers (Drugs and Cosmetics Act) is enforced by inspectors who do not always
understand/ recognize the provisions of the IT Act. Additionally given that the regulation is a Central
as well as a State license subject under a very entrenched system of inspectors and controllers, it is
common to see different interpretations and views taken in different neighborhoods. A consistent and
clear interpretation of the rules, or rather a clear explanation of the law to all officials is required.
2. Different standards for online vs offline: Everyone knows how pharmacies operate in India.
Most do not have a pharmacist on premises, they generally do not ask for prescription, dispense
without bill and substitute medicines openly. However, an organized player should and is expected to
adhere to all key provisions of the letter of the law (simply because the size of the organized player
makes it more visible both to the law makers and also to the fragmented market). In such cases, if
the offline context was equally enforced, then transactions would move online at a much faster pace.
3. Lack of Technology: This industry is a bit like agriculture: very small operations that are unable
to leverage the economies that come with technology (like tractors in small fields), since technology
used to be expensive in the past. This is critical for this industry to grow. Most pharmacies do not
have basic inventory management systems, do not have online presence etc. and as a result are illsuited to scale or support an at scale player.
4. Vested Interests/ Lobby groups: This industry is heavily unionized and the industry association
of pharmacies actively opposes any new models. This group blocks new entrants into the ecosystem,
stifles price competition and actively dissuades pharmacies from working with ePharmacies. The
small vendors do get scared making it a challenge to find partners). If this were a free market, all

good pharmacies who want to grow their business would love to work with any scale player (or scale
their own business).
5. No Parallel examples in evolved markets: For multiple reasons, US/ Europe did not see
significant ePharmacy models. While the context of operation, the pain points and quality of
organized competition is very different and mobile has really changed the game; the model in India
needs to be made to solve local problems. There is no model to copy-paste from the west and hence
investors have been hard to come by. However, this is starting to change.
6. Structural opacity for the consumer: Unlike a few other sectors, when it comes to healthcare, a
consumer is not used to choice in this sector. Too many middlemen, too much opacity and very little
reliable information make the consumer a follower, and he/she does not demand quality in the same
way as one would for food or entertainment or any other sector. Hence not much has happened to
drive innovation. This is changing - and at a hearteningly rapid pace. As transparency and
understanding evolves, people will demand service and the ecosystem will have to deliver
Net Net - Spring is coming! :)