Online Pharmacies To Resist New Draft Bill Proposing Licensing Frameworks

As the government seeks to regulate online pharmacies, these players are likely to oppose any regulatory or licensing frameworks. The Ministry of Health and Family Welfare recently released a draft of the New Drugs, Medical Devices and Cosmetics Bill, 2022, the first bill in the country proposing regulation of online pharmacies.

Online pharmacy players are likely to take up the matter with the Ministry of Health, as per a Financial Express report. These players will highlight that they work as intermediaries with wholesalers and distributors who are already licensed. Hence, a self-regulatory framework is needed, rather than repeating the process, they would maintain.

As proposed in the draft bill, online pharmacies will have to acquire a licence in order to continue operating.

“No person shall himself or by any other person on his behalf sell, or stock or exhibit or offer for sale, or distribute, any drug by online mode except under and in accordance with a licence or permission issued in such manner as may be prescribed,” Section 41, subsection (2) of the bill read.

While the existing Drugs and Cosmetics Act, 1940, is a pre-independence legislation, the new draft bill has been issued to keep pace with changing needs, times, and technology, the ministry said.

“In light of recommendations of the Central Government and the felt need to have comprehensive legislation, a committee was constituted for framing the New Drugs, Cosmetics and Medical Devices Bill,” the ministry also said in its notification issued on July 8.

The online pharmacy industry in India consists of many deep-pocket players including IPO-bound PharmEasy, Tata-owned 1mg and Netmeds, along with Amazon and Flipkart’s pharmacy businesses. Moreover, there are many other early and growth-stage startups who are trying to carve a niche in the market.

Considerably, a delegation of the Confederation of All India Traders (CAIT) met Union Health Minister Mansukh Mandaviya in June to discuss the issues related to online pharmacies.

“The Union Government is fully alive with the distortions and gross disturbance made by online pharmacies in distribution and sale of medicines through their online portals and the matter is under active consideration and needy steps will be taken soon to streamline the activities and no one will be allowed to violate the law and the rules,” CAIT said.

In the meantime, healthtech startups in India have raised around $700 Mn in H1 2022, as compared to $800 Mn in H1 2021, according to an Inc42 report. However, the deal count has slightly increased from 57 in H1 2021 to 59 in H1 2022.