January 08, 2019

India: Dissenting Opinion of Two High Courts on Online Sale of Medicines

 


Pharmacies in India are regulated under the Drugs and Cosmetics Act, 1940, Drugs and Cosmetics Rule, 1945, and the Pharmacy Act, 1948 under the authority of Central Drugs Standard Control Organization (hereinafter referred to as the ‘CDSCO’).

A state of confusion

It is strange and rather unusual to see that online pharmacies are in a state of confusion due to different views taken by the Delhi High Court and Madras High Court over sales of medicines on online platform. In a case before the Delhi High Court regarding the sale of medicines online, the Division Bench extended the stay order further till February 06, 2019, and said that when the rules regulating the sale of medicines online is formalized, then only it will enable licensing of online drug selling platforms, while on the other hand the Madras High Court on January 2, 2019, lifted the ban so imposed and overturned a Single Bench Order. It is seen that with two conflicting orders by two different High courts, the online medical retailers are going to differ in their approach unless a final order along with the rules governing it is passed.

Madras High Court’s View

The recent Writ Petition preferred by the Chennai based Tamil Nadu Chemists and Druggists Association (hereinafter referred as “TNCDA”) seeking a direction from the Court to block all the links that are selling medicines on online platforms and through applications on the mobile phones, has brought about a heat wave amongst the e-retailers in India. With the advancement of technologies and the ease of internet, majority of people are opting for getting the medicines delivered at their door step. TNCDA vide its petition strongly argued that the purchase of online medicines from unlicensed online stores can turn out to be risky as the medicines can be fake and unapproved which can cause serious health issues and further sought directions from the Court concerned to “block the link of all such websites from India who are selling Schedule H, H1 and Schedule X medicines in violation of Rule-65 & 97 of Drugs & Cosmetics Rules, 1945, till the license are granted to sell medicines through online.” On October 31, 2018, the Madras High Court had granted an interim stay on online sale of drugs without license or Competent Authority on the said petition.

On December 17, 2018, the Single Bench of the Madras High Court imposed a ban on online sale of medicines until the issuance of notification of the regulatory draft and further directed that the e-pharmaceutical companies to apply for requisite licenses within two months of the date of the notification. Vide the said order direction was also issued to the Union Government to notify the proposed Drugs and Cosmetics Amendment Rules, 2018 in the Gazette before or by the end of January 2019.

After such a ban, the whole e-pharmaceutical industry was thrown in a state of confusion as there was a complete prohibition on the sale of medicines online until the government notifies regulations to that effect and a sudden ban would inconvenience people dependent on online sale and home delivery of drugs.

Aggrieved by the ban as imposed by the Learned Single Judge vide its order on December 17, 2018, an appeal was preferred by the e-pharmacy companies before the Division Bench of the Madras High Court. A two-judge Bench, comprising Justice M Satyanarayanan and Justice P Rajamanickam, of the Madras High Court vide order dated January 2, 2019, suspended the said order of Court banning online sale of medicines and the interim relief to online pharmacies will continue until a final order of the Court comes out.

Delhi High Court’s View

A PIL was filed before the Delhi High Court by the Delhi-based dermatologist Zaheer Ahmed who alleged that a lot of medicines were sold everyday on the internet and online portals without any rules and regulations governing them which effects the health of the patients and might lead to drug epidemic, drug abuse. It was further alleged in the said PIL that the online sale of medicines is not permitted under the Drugs and Cosmetics Act, 1940 and the Pharmacy Act, 1948.

In the said case, initially the Single Judge of the Delhi High Court after considering the submissions made by the either parties directed the Central Government as well as the Delhi Government to restrain the online sale of medicines by e-pharmacies as the same is not permitted under the Drugs and Cosmetics Act, 1940 and the Pharmacy Act, 1948. Thereafter, in an appeal before the Division Bench of the Delhi High Court, the Court extended the stay order further till January 8, 2019.

On January 8, 2018, the a bench of Chief Justice Rajendra Menon and Justice V K Rao, after an application for impleadment was moved by the online pharmacies, said that "once the rules come into play, you (online pharmacies) can start selling it (medicines). Problem is that today there are no rules regulating it". The Hon’ble Judges in the said order refused to vacate the stay order on the sale of drugs and medicines on online portal and further ordered that the stay to be continued till the next date of hearing, February 06, 2019.

The view was averred by the said bench after relying on the counter affidavit filed by the Union of India wherein it was categorically stated that the statutory rules with regard to the sale of drugs and medicines online is yet to be framed. The order regarding refusing to vacate the stay order was passed even after the Hon’ble Division Bench was informed about lifting of the ban on online sale of medicines by the Madras High Court and it was viewed by the court that “We go by what is stated before us“.

Conclusion

It can be rummaged by the entire scenario that the e-retailers of the medicines and e-pharmacists are in the awe of serious scepticism after two contrasting views have been taken by two different courts of India The rules governing the sale of the medicines online to be issued by the Union Government is much awaited. It will be surprising to see how the industry is going to react after the amendment in the rules for online sales of medicine under the old Drugs and Cosmetics Act, 1940. The Indian pharmaceutical market is expected to grow more in an aggressive growth scenario. While the domestic pharmaceutical market size is about INR 1.25 trillion, e-pharmacies constitute a diminutive portion of it but the e-pharmacy market has the prospective to be huge even if it manages to capture a fraction of the offline market.

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