Amidst years of uncertainty over the regulation of e-pharmacies in the country, the draft Drugs, Medical Devices and Cosmetics Bill, 2026, proposes to bestow the powers with the drugs inspectors to inspect the office premises of online pharmacies.
The draft bill circulated by the ministry of health and family welfare for comments and suggestions by revising the previous draft bill issued in early 2023, in Chapter III touches upon the powers to regulate sales of drugs by online mode.
Under the chapter, the revised draft specifies that the drugs inspector may, within the local limits of the area for which he is appointed, inspect any premises wherein any drug is being manufactured, standardised or tested, and is being sold or stocked or exhibited or offered for sale or distributed.
In an explanation to this, the draft bill states, “For purposes of this section premises will also include the office premises engaged in sale, exhibition or offer for sale through online mode”.
The draft also covers the segment in the same chapter, while dealing with prohibition of manufacture and sale of drugs, stating that the Central government may, by notification, regulate, restrict or prohibit the sale, stocking, exhibiting or offer for sale or distribution of any drug, by online mode.
The draft also covers the online sale of medical devices in another chapter, stating that the Central government may, by notification, regulate, restrict or prohibit the sale, stocking, exhibiting or offer for sale, or distribution of any medical device, by online mode.
Similar provision has also been included in the chapter related to Ayurveda, Unani, Siddha, Sowa-Rigpa and Homoeopathy (AUSSH) drugs, medical devices and cosmetics, reserving powers with the Centre to regulate, restrict or prohibit the sale, stocking, exhibiting or offer for sale, or distribution of any AUSSH drug or cosmetic by any mode including online mode.
The previous draft bill circulated in 2022-23 covered the e-pharmacy sales by mentioning, “No person shall himself or by any other person on his behalf sell, or stock or exhibit or offer for sale, or distribute, any drug by online mode except under and in accordance with a license or permission issued in such manner as may be prescribed.”
It also reserved powers with the Central government to decide the manner for regulation and restriction for online mode of sale, or stock or exhibit or offer for sale, or sell, or distribution, of drugs. These clauses where also replicated to the matters related to medical devices and AUSSH systems of medicines.
The e-pharmacy firms started operations more than a decade back, around 2015, with the launch of major platforms including 1mg, PharmEasy, and Netmeds, according to information from the public domain.
With the online pharmacy business taking off, several venture capital investors and even major pharma manufacturers had shown interest in getting into the segment, according to reports.
1mg was later acquired by Tata Group, and Netmeds was launched by a major pharma distributor family, and saw the majority stake acquired by Reliance Industries Ltd through its subsidiary. PharmEasy started under its parent company API Holdings, has seen multiple private equity, venture capital investors including Temasek Holdings, Bessemer Venture Partners, among others investing into the business, says reports.
India’s ePharmacy industry has grown significantly, achieving an annual growth rate of around 20% over the past five years, said the industry in September, last year. Currently valued at approximately $1.4 billion, the market still represents only around 5% of the overall retail pharmacy sector in the form of organized ePharmacy. Some of the other key companies in this space include Apollo 24/7, MedPlus, Flipkart Health+, and Amazon Pharmacy, among others.
However, there is no dedicated law at present to govern and regulate the online sale of medicines in the country even after more than a decade of the existence and growth of the business model. The segment is covered under the existing Drugs & Cosmetics Act, 1940 and the rules, and the Pharmacy Act, 1948.
Despite a draft rule containing provisions for registration of e-pharmacy, periodic inspection of e-pharmacy, procedure for distribution or sale of drugs through e-pharmacy, prohibition of advertisement of drugs through e-pharmacy, complaint redressal mechanism, monitoring of e-pharmacy, data privacy etc., was published on August 28, 2018, it has not been finalised over years.
While the new Drugs, Medical Devices and Cosmetics Bill, 2022-23 also had provisions related to online pharmacy, it has now been revised to the new draft seeking suggestions and objections from the public.
The pharma traders in the country under the All India Organisation of Chemists and Druggists (AIOCD) have been collectively opposing the online pharmacy sales and engaged in litigation in various Courts in the past, pointing out that the online sales of drugs is not allowed as per the existing rules and regulations. The central drug regulator has also time and again advised the State drug regulators to take action in case of any violation of the conditions of sale licenses.
As reported earlier, the South Chemists & Distributors Association’s (SCDA), a traders’ body based in Delhi, has been pursuing a petition seeking a ban on the online pharmacies in the Delhi High Court and the High Court has sought the Ministry of Health to submit an update regarding framing rules for e-pharmacies.
However, despite repeated opportunities from the Court to update regarding the framing of policy, the Centre in May, 2024, stated that it has not been able to frame the rules. Following this, the Court proceeded to hear petitions to ban online sale of medicines on merit.
