The Delhi High Court on Wednesday ordered a blanket ban on online medicine sales and directed the Centre to implement the order with immediate effect.
Startups like 1MG, Netmeds, Pharmeasy and Medikabazaar will be affected by the order.
The PIL, filed by Delhi-based dermatologist Zaheer Ahmed, argued online pharmacies pose huge risk for patients and doctors due to lack of regulations. A division bench comprising Chief Justice Rajendra Menon and Justice VK Rao issued the order.
"Unlike common items, drugs are highly potent and its misuse or abuse can have serious consequences on human health, not just for the person consuming it but for humanity at large as some drugs can be addictive, habit-forming and harmful to the body. A large number of children/minors or people from uneducated rural background use the internet and can be victims of wrong medication while ordering medicines online," the PIL posited.
Ahmed said online pharmacies are functioning without proper licenses, resulting in misbranded and substandard drugs being traded.
Ahmed invoked the Drugs and Cosmetics Act, 1940 and the Pharmacy Act, 1948 to show online sales are illegal. While obviously these acts predate online pharmacies, they left some blank space in Indian pharmacy laws to oversee e-commerce.
Sajid Fazalbhoy, partner at Blume Ventures and an angel investor in an offline pharmacy chain, said the ban doesn’t bode well for the online players. He warned investors should err on the side of caution and vet for regulatory risks before putting money in “grey areas” like e-pharmacies.
The Union Health Ministry drafted rules to regulate online pharmacy industry in September. According to the guidelines, only government-registered e-portals can sell medicines. Also, they are required to register with Central Drugs Standard Control Organization (CDSCO), India’s drug regulatory authority.
Netmeds founder, Pradeep Dadha said, “the estimated size of the Indian e-pharmacy market is reportedly USD 142 million, just 1% of the traditional Indian pharma market, according to India Epharmacy Market Opportunity Outlook. Today, the e-pharmacy’s market potential is worth over a billion dollar with more than 30 startups contributing to the growth across India.
The Passage reached out to e-pharmacy startups Pharmeasy and 1MG and both of them declined to comment on the development.
We had previously reported on the friction between online pharmacies and physical stores.