After an increase in cases involving the sale of fake medicines online, the government has tightened regulations to ensure the authentication of online pharmacies.

According to the new Ministry of Health and Family Welfare draft rules, it will now be mandatory for e-pharmacies to register with a central authority and they will be restricted from selling narcotics, tranquilisers, and psychotropic drugs (medicines that affect the mental state of a person).

The Drug Controller General of India will issue licenses for three years and e-pharmacies will be regulated under the Drugs and Cosmetics Rules 1945 as well as the Information Technology Act 2000. The draft says e-pharmacies will have to pay Rs 50,000 to renew licenses and the premises from where e-pharmacies operate will be inspected every two years.

Any violations could lead to suspension or cancellation of licenses.

“People will have more transparency to access prescription medicine through e-pharmacies by company and pricing to patients,” says Atul Sharma, founder and CEO, Healthscape Business Solutions, a healthcare consulting firm.

He adds that “people will know whether patients are treated in line with global and local guidelines. Currently, there is no way you know the price of a drug other than its MRP. E-pharmacies will be forced to quote the right prices to the patients. Supply of medicine requires a cold-chain but I don’t know how that chain will be maintained under the proposed guidelines”.

Online pharmacies that were earlier governed by state drug regulators have welcomed the move. They believe it will ensure authentication of pharmacies online and ensure that patients are able to procure genuine medicines.

“With this notice, at least unfounded doubts on the legitimacy of e-pharmacy are put to rest,” says Prashant Tandon, founder, 1mg, an e-commerce health care company. “This sector needs strengthening of supply chains if we want to make medicines accessible at low prices across the country. The additional clarity will streamline the sector and encourage more entrepreneurship, reform and FDI interest in this important sector.”

The much-awaited draft helps address ambiguity in regulations. “Even though license requirements will be relaxed, functionality of e-pharmacies will be closely monitored, and for violation of rules e-pharmacies could face stringent penalties,” the draft reads.

But experts believe the draft is silent on details of penalties, and treats online and offline pharmacies differently.

“Should the policy identify the online pharmacies and brick-and-mortar pharmacies as two businesses? A unified license would enable a more practical approach for online and offline business models to cut across as the market evolves. And what if a physical pharmacy wants to sell online? There is no clarification on that,” says Suresh Satyamurthy, co-founder and CEO of pharma-tech company Tarnea Technology Solution.

The draft also requires e-pharmacies to establish customer support operating for at least 12 hours every day, but experts fear monitoring might be a problem. Information related to types and quantities of medicines, and supply channels/vendor lists will have to be regularly updated by e-pharmacies on their portals. It will be their responsibility to safeguard data of patients and keep it from being misused. Details of a patient shall be kept confidential and not be disclosed to any person other than the Central Licencing Authority, the draft said.

“This is going to increase cost of operations. Cost of data and security management is going to be a major issue. Offline pharmacies are not bound by any of these regulations,” says Jayant Singh, senior vice president, Heathcare atHome, a healthcare service provider.

He adds that “counterfeiting is an issue which can’t be addressed by this particular legislation. It has no bearing with whether you are selling medicines online or offline. No mechanism has been designed to stop counterfeiting of drugs”.