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May 16, 2022

CAIT seeks ban on online medicine sales

by CA Shivam Jaiswal in GST

CAIT seeks ban on online medicine sales

Confederation of All India Traders

“Vyapar Bhawan” 925/1, Naiwala, Karol Bagh, New Delhi-110005.
Phone: +91-1145032664, Telefax: +91-11-45032665,
E-mail; teamcait@gmail.com Website: www.cait.in

Dr. Mansukh Mandaviya
Minister of Health and Family Welfare Nirman Bhawan
New Delhi — 110011

Subject: Reminder for an immediate need for prohibiting e-pharmacy marketplace platforms in India to safeguard public health and safety .

Dear Shri Mandaviya Ji,

In continuation of our letter dated March 16. 2022 and 5th April. 2022. we are constrained to note that what to say of taking action, your Ministry did not think it proper to even acknowledge our above communications on a very critical subject concerning public safety and health. In this context, we would like to draw your immediate attention towards various companies doing e-pharmacy by violating the law.

Further, we invoke your immediate attention towards the report of a Group of Ministers headed by Union Defence Minister Shri Rajnath Singh formed to adjudicate upon this critical issue. We have reason to believe that the said GoM has submitted its report long back but so far it has not come in public domain, therefore, we also request you to please put the said report in public domain as well.

The Drugs & Cosmetics Act and Rules have laid down a comprehensive framework for standard and quality of drugs is maintained so that public health and safety arc not compromised.

Through this communication, we draw your immediate attention towards rampant malpractices being resorted to by select e-pharmacy marketplace platforms which are in staggering violation of the DC Act and Rules. Such practices can not only put the health and safety of the Indian consumer in jeopardy but also have irreparable and fatal consequences. In addition to playing with the lives of Indian consumers, most of whom are unaware of these dire consequences. malpractices by e-pharmacy marketplace platforms have even led to the business killing of numerous traditional retail pharmacies or neighborhood chemist shops.

We maintain of that e-pharmacy marketplaces are not only operating without valid pharmacy licenses but have also been failing to undertake reasonable due diligence gravely compromising consumer safety and health. It must also be noted that e-pharmacy marketplaces often hide behind intermediary protection provisions like Section 79 of the Information Technology Act. 2000 in the event of an adverse incident where the consumer receives a counterfeit or adulterated or spurious or incorrect drug. This is similar to how e-commerce marketplace entities dodge liability by claiming intermediary protection in e-commerce. However, we would like to urge you to appreciate that the consequences in the case of e-pharmacy marketplaces are not only more grave but also irreversible in most cases. It is for this reason that we urge you to issue urgent directions to prohibit all e-pharmacy marketplaces from operating in India so that the Indian consumer is not exposed to any more harm to his health and safety.

To further strengthen the existing framework that regulates and governs e-pharmacies in India, we would like to suggest some amendments (in Blue and bold) in the Draft Drugs and Cosmetics Amendment Rules, 2018 published for public comments by the Ministry. We would like to suggest a change in the definition of “sale by way of e-pharmacy” under Rule 67-1(e): “sale by way of e-pharmacy” means a sale of drugs by the e-pharmacy entity whether to a hospital, or dispensary, or a medical, educational or research institute or to any other person through e-pharmacy by way of retail sale.” This will ensure that only those e-pharmacies which distribute or sell, stock and exhibit or offer for sale are permitted and all other e-pharmacies are expressly prohibited.

It is also suggested to add Rule 67J (5) to ensure total compliance with 67-N i.e. ensuring that whoever is required to obtain a license does so failing which a penalty would be imposed. Therefore. we suggest the following: ” (5) Whoever, being required to obtain a registration under rule 67N, distributes or sells. stocks, exhibits or offers for sale of drugs through e-pharmacy portal, without being registered shall be punished with fine which shall not be less than one lakh rupees but which may extend to ten lakh rupees.

It is further suggested that a few additional conditions must be added under Rule 67M “Conditions of registration of e-pharmacy” as sub-rule 6 & 7 in the following manner: “67M. Conditions of registration of e- pharmacy. – (6) No person shall establish a web portal to act as an intermediary between the e-pharmacy entity and the consumer; (7) Any person who intends to conduct business of retail sale in e-pharmacy under the category of multi-brand retail shall be required to comply with the provisions of Consolidated FDI Policy issued by the Government of India for Multi Brand Retail Trading.

Rule 67P provides for the ‘Procedure for distribution or sale. of drugs through e-Pharmacy’ and the following amendment is suggested under sub-rule (2): (2) The e-pharmacy registration holder who has received prescription in sub-rule (1) shall dispense and made arrangement for supply of drugs from any drugs from its retail or wholesale licensed premises under the Drugs and Cosmetics Act, 1940 and rules made thereunder.” This amendment is suggested to further strengthen the intent and objective of the Act and ensure that drugs arc disbursed only from the registered retail pharmacy and only by a registered pharmacist after following due verification process.

Finally, it is also suggested that details of the pharmacist who is licensed to dispense drugs under the DC Act and Rules are not only made available but also that compliance of such details is stringent. In light of the same, the following changes are suggested under Forms 18AA and 21AA:

Under Form 18AA (4). ‘Name of the Pharmacist In-charge of the e-pharmacy’ must be replaced with ‘Name of the Pharmacist In-charge of the e-pharmacy on whose registration the Pharmacy license is obtained’.

Under Form 2IAA (4) ‘Name and registration number of registered pharmacist in-charge’ should be replaced with ‘Name and registration number of registered pharmacist in-charge on whose registration the Pharmacy License has been obtained’.

These changes are in keeping with the consumer interest in so far that the benefits of technology and e- pharmacies can reach the Indian consumer without putting their health and lives at risk, of any kind. Further, ban on marketplace intermediary e-pharmacies will put an end to the deep discounting and predatory pricing being done by leading e-pharmacy intermediaries by way of cash burning and will ultimately protect the interests and livelihood of millions of small traders and consumer alike.

Thank you. With regards Yours truly

National Secretary General
Confederation of All India Traders

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