DCGI Sends Notices To Tata 1mg, Amazon, 18 Other Epharmacies For Violating Rules

The Drug Controller General of India (DCGI) has sent show-cause notices to 20 epharmacies, including Tata 1mg, Amazon, and Flipkart, for selling and distributing drugs in contravention of provisions of the Drugs and Cosmetics Act, 1940.

The companies have been asked to explain why action should not be taken against them for violating the rules.

The Drugs and Cosmetics Act, 1940 regulates the import, manufacturing and distribution of drugs in India.

In the notice, the DCGI said that the sale, or stock or exhibit or offer for sale or distribution of drugs through online, internet or other electronic platforms without a licence have potential impact on quality of drugs and pose risk to public health due to potential misuse of drugs through self-medication and indiscriminate use of the drugs.

“In view of above, you are hereby asked to show cause within 02 days from the date of issue of this notice, why action shall not be taken against you for sale, or stock or exhibit or offer for sale or distribution of drugs in contravention of the provisions of the Drugs and Cosmetics Act, 1940 and Rules made thereunder,” the notice dated February 8 said.

If the companies don’t reply to the notice, necessary action shall be initiated against them without any further notice, it added.

While there are various ongoing cases in courts for prohibition of online sale of drugs, the DCGI in its notice quoted the order by the Delhi High Court in the matter of Dr. Zaheer Ahmed Vs Union of India and others.

“Respondents are injuncted from online sale of medicines without licence and the respondents are directed to ensure that the same is prohibited forthwith until further orders,” the court order said.

Even after the issue of the order, epharmacies were found to be engaged in sale of drugs online without licence, the notice added.

The rising digitisation and the Covid-19 pandemic gave a boost to the online pharmacy sector in the country over the last few years. Tata’s 1Mg, IPO-bound PharmEasy and Amazon Pharmacy, Flipkart Health+ are among the major players in the sector in the country.

It is pertinent to note that last year, the government came out with the draft New Drugs, Medical Devices and Cosmetics Bill, 2022. The Bill also brought epharmacies under its ambit.

As per Section 41(2) of the draft Bill, online pharmacies will have to acquire a licence to continue operating as usual. The draft bill also includes suggestions for regulating epharmacies further. Online pharmacies would also not be permitted to sell medical devices without a licence if the bill is passed into law.

According to a report by Research and Markets, the Indian online pharmacy market was estimated at INR 25.50 Bn in 2021 and is estimated to expand at a compound annual growth rate (CAGR) of 22.20% to reach a size of INR 89.47 Bn by 2027.

India’s healthtech segment has more than 5,000 startups which raised nearly $6 Bn between 2014 and November 29, 2022. Of this, online pharmacy startups raised $1.25 Bn, according to Inc42 data.