Setback for e-pharmacies as Madras HC suspends online sale of medicines

In what could be a major setback to the blossoming e-pharmacy business in India, the Madras High Court on Wednesday issued an injunction prohibiting online vendors from selling drugs online until 9 November.

Justice R Mahadevan granted the injunction in response to a plea filed by the Tamil Nadu Chemists and Druggists Association (TNCDA), which was seeking a direction to block the links of all websites selling Schedule H, H1 and Schedule X medicines.

The court said it will hear the matter in the second week of November and has asked the central government to submit a counter affidavit.

According to the Drugs and Cosmetics Rules, 1945, online retailers can only sell medicines with a valid prescription and under the supervision of a registered pharmacist who has a licence.

The central government had released a draft bill in August this year, legitimising the sale of drugs on e-commerce websites. However, the government had given 45 days to record and consider objections to the bill. The association argued that the matter is still pending in the court and that the sellers had consequently violated Rules 65 and 97 of the act by selling medicines without licences.

“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 licence and directs the first respondent or the competent authority to stall such online sales forthwith,” Justice Mahadevan said in his ruling.

The chemists and druggists body, TNCDA, represents nearly 30,000 members engaged in pharmaceuticals retail and wholesale trade.

Responding to the ruling, Pradeep Dadha, founder and chief executive of online pharmacy Netmeds said, "We came to know from the media that some order was passed by the Honorable Madras High Court. We would not be in a position to comment on this till our legal team examines the implications of the ruling."  

Earlier this month, the Internet and Mobile Association of India (IAMAI) had sought clarification on whether the e-Pharmacy Bill was applicable to small offline retailers who act as sellers on pharmacy marketplaces. The industry body had also suggested amending a clause in the draft bill pertaining to the centralised registration of e-pharmacies, which can be canceled by the state governments if periodic inspections prove unsatisfactory. The IAMAI has requested a single centralised registration and monitoring mechanism.

The e-pharmacy space has attracted considerable investor interest with the impending announcement of the bill. In September, online pharmacy NetMeds raised $35 million from Daun Penh Cambodia Group in Singapore and drug delivery platform PharmEasy raised $50 million led by Eight Roads Ventures.