What is an E-Pharmacy?
E-Pharmacy is an online mechanism or online pharmacy through which an individual requiring medications can obtain them by uploading the prescription online(website, app etc.), which is then acknowledged by a registered pharmacist or pharmacy(with whom such website app etc. have tie-up with) and then they deliver the medications so required by the individual, at his home. The E-Pharmacy Startups or Companies in India are Netmeds, Medlife, 1mg, PharmEasy, Myra, CareOnGo, Pharmasafe.
MODELS OF E-PHARMACY STARTUPS IN INDIA:
Marketplace Model:
In a marketplace model, E-pharmacy startup is carried on a platform like (Flipkart or Amazon), acting as a facilitator or technology platform for selling medicines and drugs by third party registered pharmacies/chemists to end consumers through its website or app. The products sold on the platform are owned by the third party registered pharmacies/chemists and the app or website acts as a mere intermediary or a technology platform or an online agent between the pharmacies and the consumers in the matter of price discovery or showcasing or exhibiting medicines or drugs, discounts, logistics and delivery.
Inventory Model:
Whereas in an Inventory model, a pharmacist/chemist sells the products that are owned by such pharmacist/chemist, online through its own website or app to the end consumers. In this model, the registered physical pharmacy develops its own website or app through which it sells its medicines or drugs online from their own pharmacy. For instance, Netmeds is a licensed and registered physical pharmacy offering prescription medications online. It has even provided its license no. on its website.
REGULATIONS GOVERNING E-PHARMACY
The Regulations which govern the traditional or conventional pharmacy also govern the online pharmacy or E-Pharmacy sector or E-Pharmacy Startups. This has also been clarified by the Office of Drugs Controller General (India) through its notification dated 30 December 2015. The Notification categorically mentions that the Drugs and Cosmetics Act, 1940 does not distinguish between the conventional and over the internet sale/ distribution of drugs and accordingly the provisions of Drugs and Cosmetics Act, 1940 must be complied by E-pharmacy companies as well.
So the present drug regulation in India governing E-Pharmacy is as follows –
· Drugs and Cosmetics Act, 1940.
· Drugs and Cosmetics Rules, 1945.
· Drugs and Magic Remedies (Objectionable Advertisements) Act, 1954.
· Pharmacy Act, 1948.
· Pharmacy Practice Regulations 2015.
· Information Technology (IT) Act, 2000 etc.
Indian Internet Pharmacy Association (Now ‘Digital Health Platform’) in 2016 has provided a “Self- Regulation Code of Conduct for the E-Pharmacy Sector” (“Code of Conduct“) which formulates the highest professional standards and proper safeguards to ensure that consumers’ health and safety is not compromised . This Code complies with the existing Drug and Cosmetic Act, 1940. On 28th August, 2018, the Ministry of Health and Family Welfare (Department Of Health and Family Welfare) published the Draft rules ‘Drugs and Cosmetics (Amendment) Rules, 2018’ to amend the Drugs and Cosmetics Rules, 1945. These Draft Rules are yet to come into force. They are not operative or effective as of yet and their status is still pending. But whenever it will come into force, then it will regulate all the E-Pharmacy sector or E-Pharmacy Startups in India and it would become mandatory to comply with the same.
‘E-Pharmacy in India and Its Regulatory Compliances’
Positive Regulatory Developments With Respect To E-Pharmacy In India:
The latest notification issued by the Ministry of Health and Family Welfare (Department of Health and Family Welfare) on 26th March 2020 has provided details regarding doorstep delivery of drugs and medicines by retail pharmacies. This is a very important notification with respect to the E-Pharmacy sector as it talks about “reception of prescription through email”. As per the notification any person intending to sell, stock or exhibit or offer for sale, or distribute drugs by retail with doorstep delivery of the drug by receipt of prescription physically or through email shall follow the following guidelines-
1. Should hold a license in Form-20 or Form-21 under the Drugs and Cosmetics Rules, 1945.
2. The licensee shall submit an e-mail ID for registration with the licensing authority if prescriptions are to be received through email.
Data Protection and Privacy Related Compliances for E-Pharmacy Startups:
With respect to the compliances relating to Data Protection, E-Pharmacies Startups (both marketplace and inventory) planning to start a website or an application for providing their services should have a Privacy Policy, Terms and Conditions, User Agreement on their app or website and they also have to adhere to the Information Technology Act 2000 and rules and regulations mentioned therein specifically to the following:
· Information Technology(Intermediaries Guidelines) Rules 2011.
· Information Technology(Reasonable Security Practices and Procedures and Sensitive Personal Information Rules, 2011).
· Section 43A of the Information Technology Act,2000.
Conclusion:
Anyone willing to start an E-Pharmacy startup or an E-Pharmacy business in India should first decide whether he is opting for an Inventory Model or a Marketplace Model. If one opts for an Inventory Model, then every physical pharmacy that one starts has to be licensed with respect to the relevant laws as have been discussed.
Whereas if one opts for a Marketplace Model, then he has to ensure that every physical pharmacy that he partners/collaborate/ties up with has to be registered and licensed. Compliances with respect to data protection laws, must be strictly adhered by an E-Pharmacy Startup whether opting on an inventory model or marketplace model. Having a robust Privacy Policy, Terms and Conditions is a must. Extreme precautions should be taken with respect to prohibited and habit forming drugs.
Finally providing a strong customer grievance redressal mechanism is a must. In the end, starting an E-Pharmacy startup or business is not like any other e-commerce startup or business. Here you deal with an individual’s health and so utmost care and precautions must be taken. It is very important to consult a lawyer who is solely focused on startups i.e. a startup lawyer who can ensure that all the required compliances have been adhered to. Such a startup lawyer can not only help you in legal compliances or drafting and vetting of legal documents(contracts and agreements) for an E-Pharmacy startup but he can also be helpful in various stages like getting investors in your startups, startup finances, getting angel investors or angel investment companies providing angel capital or angel money, crowdfunding or other funding opportunities for startups . So if you are an entrepreneur seeking investors for your E-Pharmacy startup or company, seeking consultation of a Startup Lawyer who has all round knowledge with respect to startups, is a must.
