Netmeds, Practo, 4 other firms implead in e-pharma case in Madras HC

Chennai-based Tamil Nadu Chemists & Druggists Association has sought a stay on selling medicines online

Six online pharmacy majors in the country have pleaded before the Madras High Court that the recent interim stay on selling medicines online should only be implemented on unauthorised companies. They have argued this as part of the appeal to implead them in the case. Meanwhile, the Chennai-based Tamil Nadu Chemists & Druggists Association (TNCDA), which sought a stay on selling medicines online, argued that no company has the licence to do the same.     

The companies that impleaded on Friday were 1MG Technologies, Digital Health Platforms, Netmeds Market Place, 91 Streets Media Technologies, Medline International and Practo Technologies.    

The online pharmacies, according to legal sources, sought that the restriction should only be applicable to unauthorised companies. They said that they were giving an undertaking that they were selling only from licensed pharmacies.

Responding to Friday's developments, Netmeds.com Founder and CEO Pradeep Dadha said, "We are pleased with the outcome of the hearing today at the Madras High Court, which reiterated its earlier observation on November 1, that it will not restrain licensed online pharmacies from selling medicines through their platforms. As a fully licensed online pharmacy, Netmeds.com is committed to adhering to all the guidelines and rules under the D&C act."  

On October 31, the court granted an interim injunction on a plea moved by the TNCDA. "... In view of the above, taking note of the seriousness of the issue and public cause, this court grants interim injunction against the online sale of medicines without license and directs the first respondent (Government of India) or the competent authority to stall such online sales forthwith," said the court's order. 

The court also directed the Centre to file a counter and posted the matter for the second week of November.  

TNCDA argued on Friday that the interim order issued on October 31 was clear and did not need an update. It alleged that the companies that came up for impleading also didn't have a licence to sell medicines online. The prevailing regulation does not allow anybody except a licenced, registered pharmacist to sell medicine and even such sales have to be within the premises of the licensed pharmacy. The drafting rules for e-pharmacy have not been implemented at present, argued the association. 

The association, which claims itself as a representative body of nearly 30,000 members engaged in pharmaceuticals retail and wholesale trade, filed a plea seeking a direction to authorities concerned to block links of websites that were selling medicines online.

In the plea, it was stated that though online shopping might be convenient to consumers, purchasing medicines from unlicensed online stores can be risky as they may sell fake, expired, contaminated, unapproved drugs or otherwise unsafe products that are dangerous to patients and which might put their health at risk. 
 

The association claims that online sales are being carried on by several persons through about more than 3,500 sites, which are dealing in online medicines and distributing the same all over the country.  

Moreover, laws for pharmacies in India are derived from the Drugs and Cosmetics Act, 1940, Drugs and Cosmetics Rule, 1945, and Pharmacy Act, 1948. 

These laws were written prior to the arrival of computers and India does not have any concrete laws defined for the online sale of medicines, the association said in the affidavit, a copy of which is available with Business Standard. 

Though various amendments have been made to the 1948 Act, no provision has been made to utilise information technology for the sale of medicines online, it said. 

From a market size of $12.6 billion in 2009, the Indian pharmaceutical market will grow to $55 billion by 2020, with the potential to reach $70 billion in an aggressive growth scenario. 

ResearchAndMarkets.com estimates that today, the e-pharmacy market potential is worth over a billion dollars, with global and domestic industry giants such as Amazon and Flipkart, along with more than 30 start-ups, trying to grab the pie. The Indian e-pharmacy industry is anticipated to grow at a CAGR of over 20 per cent, crossing the $3 billion mark by 2024.  

E-pharmacies are recent entrants in the Indian e-commerce industry landscape, which is receiving increased attention from the government and investors. 

As of September-end, deals in the e-pharmacy space surged 210 per cent in value over all of 2017. Data from Venture Intelligence shows e-pharmacy had a total of seven deals between January and September, with a cumulative value of $115 million (Rs 8.3 billion). The corresponding period last year had only three deals whose total value was $23 million. In all of 2017, the space had five deals, totalling $37 million.