Written by Kazim Rizvi
In his speech on Independence Day, Prime Minister Narendra Modi announced the National Digital Health Mission. The mission proposes to create a digital platform that will revolutionise healthcare and improve access by leveraging technology. Going forward, the mission will invite participation from healthcare providers, including e-pharmacies. However, many e-pharmacies in India have been fighting for independence in their own way. In 2018, the government introduced a draft amendment to the Drugs and Cosmetics Rules, 1945 (DCR) to regulate online sale of drugs (Draft Rules). Coming from a government that is big on the potential of technology platforms, the Draft Rules were not clear about its position on platforms that act as intermediaries between sellers and buyers of medicines. This lack of clarity has restricted e-pharmacies to operate on their full potential. Given the fact that physical purchase of medicines has become risky, there is a need for government intervention to make sure this critical sector does not suffer due to lack of regulatory certainty.
The pharmaceutical sector is one of the most densely regulated sectors in India. Production, distribution, sale and marketing of medicines is regulated through a variety of laws and regulations, primary amongst these being the Drugs and Cosmetics Act, 1940 (DCA) and the DCR. For e-pharmacies that source medicines from pharmaceutical companies and sell to consumers through an online channel, there is sufficient clarity. In December 2015, the Drug Controller General of India (DCGI) issued a notice clarifying that the DCR does not “distinguish between conventional and over the Internet sale/distribution of drugs” and both online and offline sellers will have to comply with its provisions. There is an array of regulations that could apply to e-pharmacy with a platform model, however, we are far away from harmonisation and regulatory certainty.
The DGCI left out an important category of e-pharmacies that do not follow the “inventory” model. Companies that have a “platform” model do not sell, stock, exhibit or offer for sale or distribute drugs and therefore do not require any license under the DCA and DCR. They merely act as a conduit between businesses and the end customer, facilitating convenience for all parties involved. As the e-pharmacy business started taking off in the country, petitions were filed in court against the online sale of medicines. The Delhi and Madras High Courts banned online sale of medicines without license, leaving companies which have a “platform” or a marketplace model in a difficult spot. It remains unclear whether intermediaries need a license in the first place, but the companies have somehow come under the purview of a ban, at least in the perception of many stakeholders.
In line with the government’s strong commitment in improving healthcare access in India and in promoting technology platforms, clarification on the draft rules is key. It should make it clear that sellers listing and selling drugs on platform-based e-pharmacies shall be responsible for the authenticity of the data that is displayed on the online marketplace. Online marketplaces, in turn, can develop necessary controls and build processes which will help sellers comply with the obligations stated under the Draft Rules. Online marketplaces can also be asked to collaborate with the (Central Drugs Standard Control Organisation) CDSCO for necessary enforcement against sellers.
Further, the Draft Rules mandate that an e-pharmacy has to mention various kinds of information on its e-pharmacy portal, including registration issued in Form 21AA, official logo of the e-pharmacy portal, constitution of the firm, details of the logistics service provider and the names of the registered pharmacists. As the platform-based e-pharmacies scale and reach customers across India’s length and breadth, real-time production of this data will be counter-intuitive. The government should rethink this provision and mandate that dynamic information like details of the logistics’ service provider, and name of the registered pharmacists be recorded and provided only on demand by CDSCO. Sellers on the platform may be encouraged to upload a copy of their registration issued by CDSCO which would contain all mandatory information. It might even be prudent to specify the categories of data that must be stored to provide utmost clarity that facilitates ease in compliance.
Editorial | For better health
Further, the Draft Rules mandate that supply of any drug shall be made against a cash or credit memo generated through the e-pharmacy and such memos shall be maintained by the e-pharmacy registration holder as record. This will be critical for promoting more innovative business models that follow the platform approach.
At the same time, the registration holder shall also be duty bound to provide such information to the central or state Government. The government should note that issues relating to sharing of personal data are presently being discussed under the Personal Data Protection Bill,2019 and all regulations pertaining to sharing of personal data of customers will soon be governed by that law. Therefore, the Draft Rules should amend provisions relating to data sharing and maintain the highest standards of privacy and data protection that is harmonised with the Data Protection law.
The pandemic has become a clarion call for the government to open the cage of regulatory uncertainty within which it has kept e-pharmacies that follow the platform model. Over the last few years, technology platforms have displayed their immense potential to impact Indian society and economy in a positive manner. Regulatory clarity can unlock innovation in this sector and increase competition in the pharma supply chain. A decade back, it was unimaginable to access food, taxis and many other goods and services on demand in India. However, with the ongoing digital revolution, citizens have become aware and well-adjusted to tech platforms. They prefer convenience and user experience of accessing goods and services through technology platforms. This is also helping in creating more job opportunities across the supply chain as more people are involved in procurement, and delivery. E-Pharmacies collaborate with local pharmacies for ease, which helps in stimulating economic activity in the area. The government needs to take this into account, along with the Prime Minister’s vision for healthcare as announced from the ramparts of the Red Fort, and unleash the full potential of e-pharmacies in the country. At a time like this, it will make Indians truly atmanirbhar.
(The writer is founder of The Dialogue, a policy think-tank)