Madras HC Stays Ban On Online Sale Of Medicines, Epharmacies Welcome Move

The Madras High Court has stayed the order which banned the online sales of drugs and cosmetics till it announces a decision in the matter.

The order was passed today (January 2) by the High Court’s division bench, comprising Justice M Satyanarayanan and Justice P Rajamanickam. The bench had earlier provided a temporary relief by suspending the single judge order and has now given its final order in the matter.

However, media reports said that the single judge’s direction to the central government to notify the epharmacy rules before January 31 remains in force.

Pradeep Dadha, founder and CEO, Netmeds.com said: “We are extremely grateful for the observations made by the bench which validates the work that we have put in for the last three years. As part of the observations, the bench recognised that mechanisms are in place to prevent any real abuse of process by the online pharma sector. One of the most pertinent observations made was that the Central Government is not opposed to online pharmacies, and is actively putting in place systems for regulating the sales.”

The bench also observed that online sales have been going on without any problems for a long time, and shutting this down would be detrimental to the nascent industry. Also, it noted that people are not always in a position to always go out to buy medicines.

Dharmil Sheth, cofounder, PharmEasy said, “We are glad to have this verdict on the ongoing case. Online pharmacies are bringing in a lot of transparency in the entire supply chain and consumers will benefit a lot out of this.”

The decision comes after the division bench of the Delhi High Court led by its Chief Justice, Justice Rajendra Menon extended its interim order banning the online sale of medicines through epharmacies till January 8, 2019.

Earlier in October 2018, the Madras High Court had issued a country-wide interim stay order on online pharmacies and last week it had reserved its verdict after the final hearing in a similar case. The order had raised alarm among private equity funds that have invested nearly $42.3 Mn (INR 300 Cr) in them.

This was followed by an appeal by six online pharmacy companies and a platform formed by the major pureplay online pharmacies who had impleaded in the petition filed by the Tamil Nadu Chemists and Druggists Association (TNCDA) before the single judge.

The companies have informed the court, through the appeal, that they are not violating any rules or regulations under the act. There are two types of online pharmacies, one acting as aggregators to connect registered pharmacists and the consumer and the other which have their own registered pharmacists, medicine stocks and sales licenses under existing regulations.

In December 2018, Justice Pushpa Sathyanarayana had passed an order directing the central government to notify the epharmacy rules in the Gazette at the earliest, not later than January 31, 2019, in the interest of public and the online drug trade.

Under the rules, those selling drugs and cosmetics online, have to obtain licences in the manner prescribed, within a period of two months from the date of notification.

The agitations erupting in India’s pharmaceutical industry, which was valued at $33 Bn in 2017, may have a major impact on the sector’s growth which is expected to expand at a CAGR of 22.4% over 2015–20 to reach $55 Bn.