Legality of Online Pharmacy in India

Authored by- Vivek Dubey

Assistant Professor of Law
Dr. Harisingh Gour Vishwavidyalaya Sagar

Pharmacy means a shop or hospital dispensary where medicinal drugs are prepared or
sold1. As per medical dictionary it also means the branch of the health sciences dealing with
the preparation, dispensing, and proper utilization of drugs or a place where drugs are
compounded or dispensed2. However, an online pharmacy, e-pharmacy, Internet pharmacy,
or mail-order pharmacy is a pharmacy that operates over the Internet and sends the orders to
customers through the mail or shipping companies3.
The growth of the Internet has made it possible to compare prices and buy products without
having to leave home. It started with books, gradually moving to gadgets, cars and clothes.
One of the progressive technology models that have evolved in the last few years is telemedicine that has enabled accessibility to the finest doctors at the tap of a button. Another
recent innovation that has positioned itself as an attractive model in the healthcare space is Epharmacy or Online Pharmacy4.
It might include:
i.
ii.
iii.

Pharmacy benefit manager A large administrator of corporate prescription drug plans

Legitimate Internet pharmacy in the same country as the person ordering.
Legitimate Internet pharmacy in a different country than the person ordering. This
pharmacy usually is licensed by its home country and follows those regulations, not those
of the international orders5.

1 Definition of pharmacy as per Cambridge dictionary.

2 Available at http://medical-dictionary.thefreedictionary.com/pharmacy, last visited on 28/08/2016.
3 Available at https://en.wikipedia.org/wiki/Online_pharmacy, last visited on
12/05/2016.
4 FICCI Stakeholders Consultation on Online Sale of Drugs and Medicines, available at
http://ficci.in/spdocument/20602/FICCI-Representation-to-DCGI-Final.pdf, last visited on 11/05/2016

iv.

Illegal or unethical internet pharmacy. The web page for an illegal pharmacy may contain
lies about its home country, procedures, or certifications. The "pharmacy" may send
outdated (expired shelf life) or counterfeit medications and may not follow normal
procedural safeguards.6

An online pharmacy sounds convenient; no waiting in queues, no rushing to the pharmacy

before it shuts shop for the day, placing the order is easy, moreover, the order can be placed
any time of the day and the medicines are conveniently delivered via courier at your
doorstep. Yet, this convenience comes at a price. Not only there may be financial
implications for the patients, their safety may even be endangered at times. 7 The online
pharmacy may have its own cancellation policy and may not refund or only partly refund the
amount paid upon cancellation of the order or even non-delivery of an order. Unlike the local
neighborhood pharmacy or the hospital pharmacy, the patient does not have access to a
pharmacist if he/she has any questions about a medicine.8
Models of E-pharmacy or Online Pharmacy
Presently there are three models of online pharmacy that exist in Indiaorganised,
unorganised and illegal. These three models of E-pharmacy or online pharmacy have been
misunderstood and used interchangeably9. A common misconception behind the authenticity
of operations of an e-pharmacy is prevalent because there is skeptical knowledge behind the
legal business models vis a vis the illegal international trade of drugs online10. Clearly, model
under organized e pharmacy has scope of adding value to the ecosystem. While the
unorganized and international trade models need to be controlled, it is important to enable
5 Supra note 3
6 Available at https://en.wikipedia.org/wiki/Online_pharmacy, last visited on 28/08/2016.
7 IMA White paper on Online Pharmacy, available at http://www.ima-india.org/ima/left-side-bar.php?
scid=324, last visited on 02/06/2016.
8 Ibid.
9 FICCI Stakeholders Consultation on Online Sale of Drugs and Medicines, available at
http://ficci.in/spdocument/20602/FICCI-Representation-to-DCGI-Final.pdf, last visited on 11/05/2016
10 Available at http://businessworld.in/article/Organised-E-pharmacy-Increases-SafetyTransparency-/14-06-2016-99147/, last visited 29/08/2016.

and support the organized model which has tremendous benefits and opportunity to create
significant innovation.11
1. The Organized e-pharmacy12: There are two models which operate in this category. One
is a market place model where a technology company connects neighbourhood licensed
pharmacies to the end user. Other is an inventory based model where E-pharmacy is an
online service of an offline licensed pharmacy 13. In other words this either connects
neighborhood licensed pharmacies to the end user or it operates as an inventory-based model
where e-pharmacy is an online service of an offline licensed pharmacy.
In an Organized Pharmacy, every order that is received is verified and checked by a team of
registered pharmacists. Drugs requiring a prescription medicine are checked for a copy of the
prescription. The validity of the prescription is checked as the set format. The medicines are
dispensed by registered pharmacists in a licensed premise in a sealed tamper proof pack.
Without a prescription the medicines are not dispensed. With the most advanced technology
aligned with their processes, they keep track of each and every order.
Drugs that do not require prescription from a medical practitioner or are sold over-thecounter ("OTC Drugs") are even better administered in Organized Pharmacy. Given that
OTC Drugs can be sold by any person holding a 'Restricted Drug License' and does not
require involvement of a registered pharmacist, such persons should be allowed to sell OTC
Drugs online as long as they hold a valid license14. The Drugs and Cosmetics Act does not
cover all loopholes and we also need a clearer definition of OTC (over-the-counter) drugs to
make e-commerce of drugs a safer and viable option.15

11 Supra note7
12 In this model companies which are adhering to all the rules and regulations put forth by the
government taking into account proper record management as well as validation of all prescriptions
uploaded on their platforms.
13 Supra note 8
14 Supra note 7
15 Available at http://www.livemint.com/Politics/9hMPyMKYHTJSu5VVPRJmWO/Government-gearsup-for-epharmacies.html, last visited on 29/08/2016.

2. Unorganized e-pharmacy: In this model prescription medicines are ordered without any
validated prescription16. There is no check on the genuineness of the order due to absence of
qualified pharmacists. Also improper record keeping and no audits is a major area of
concern17.
3. Illegal International trade through E pharmacy: Drugs being shipped across the
international borders without any prescription and approval from the concerned authorities. 18
This is generally used to order cheaper version of drugs like Viagra19.

Benefits of E- Pharmacy for the Patients

1. Consumer Convenience and access: The E-pharmacy can be very convenient and
significantly improve the access of medicines for the patients. This will be pertinent with
increasing nuclear family concept, working couples, increasing number of elderly population
and urban development in periphery of the metro cities20. The access of medicines is difficult
for a significant number of people in the country, especially when one is sick
2. Improved Availability: Offline pharmacies can only keep limited inventory, resulting in a
patient visiting multiple stores to get his or her medicine. With the use of technology and
access to Inventory of multiple stores at a time an E-Pharmacy concept can significantly
improve the availability of the drugs.21
3. Enhanced Services of the Pharmacist and Pharmacologist: The E- pharmacy can
enhance the services of the pharmacist. Routine questions about medication can be answered
16 Available at
http://economictimes.indiatimes.com/industry/healthcare/biotech/pharmaceuticals/h
ow-e-pharmacy-can-empower-consumers/articleshow/47418472.cms, last visited on
30/08/2016.
17 Ibid
18 Supra note 12
19 Supra note 14
20 Ibid
21 Ibid

by online pharmacists using e-mail or other real-time chat options. Knowledge of a patients
diagnosis, results of laboratory tests, and established drug monitoring parameters, largely
unavailable to pharmacists at present, could be made accessible through the Internet.
Digitally, very important information can be provided to help a patient learn more22.
4. Data records and Analytics: All medicine purchases can be tracked - effectively reducing
the problem of drug abuse and self-medication. The records of patients name and address of
delivery can be tracked. Online pharmacies can store and analyse large amounts of data on
consumers across the nation which can be very useful for planning public health policies
5. Patients Compliance and Education: E-pharmacies have the technology infrastructure to
provide value added information to consumers, such as precautions, side effects and
information on cheaper substitutes. The more aware consumer will always benefit from the
power of knowledge, which is easily distributed through the electronic medium. Using
Medication reminders the compliance of the patients can be improved23.
6. Transparency in the system and consumer education: Patients can compare the prices
of affordable equivalents and can discuss with their health care provider. All the transactions
will be digitally stored so making it easy to track the supply chain therefore decreasing the
risk of counterfeit medicines24. Also online pharmacies have the technology infrastructure to
provide value added information to consumers, such as drug interactions, side effects,
medicine reminders, and information on cheaper substitutes. The more aware consumers will
always benefit from the power of knowledge, which is easily distributed through the
electronic medium.25
7. Medicine Authenticity: With full tracking systems and solid technology backend,
counterfeit medicines can be traced back to the channel/ manufacturer/ supplier thereby
making the market a lot more transparent and ensuring authenticity is strictly maintained26
22 Supra note 5
23 Ibid
24 Ibid
25 Available at http://economictimes.indiatimes.com/industry/healthcare/biotech/pharmaceuticals/how-epharmacy-can-empower-consumers/articleshow/47418472.cms, last visited on 30/08/2016.
26 Supra note 5

8. Transaction records: Organized online players would have systematic records for all
transactions, with full taxes paid on each transaction. A great benefit to the state considering
the size of the market.27

Law on Online Pharmacies in India

There are no well-defined dedicated laws for online pharmacies in India like US or UK.
Pharmacies in India are governed by the following acts28

The Drug and Cosmetics Act 1940,

The Drugs and Cosmetic Rules 1945,
The Pharmacy Act 1948 and the Indian Medical Act 1956.

The Information Technology Act, 2000 defines and governs the law relating to ecommerce in
India. According to Indian laws, a chemist can dispense prescription drugs only on the
prescription of doctor. A prescription requires the name of the doctor, his /her address and
registration number besides the name/s of the drug/s, their potency, dosage, and duration for
which the drugs are to be supplied. The chemist cannot dispense quantity in excess of what
has been prescribed by the doctor. Before dispensing the drugs, the pharmacist is expected to
verify the completeness, authenticity and legality of the prescription29.
Even over-the-counter (OTC) drugs can be sold only by licensed retailers. The major issue of
concern is that prescription drugs cannot be sold online. There are provisions in the various
acts mentioned above regarding the same.
As per Indian Pharmacy Act, 1948, No person other than a registered pharmacist shall
compound, prepare, mix, or dispense any medicine on the prescription of a medical
practitioner.30 It also states, Whosoever contravenes the aforesaid provisions shall be
punishable with imprisonment for a term which may extend to six months, or with fine not
exceeding one thousand rupees or with both.31

27 Ibid
28 Supra note 4.
29 Ibid.
30 Subsection 1 of section 42 of Indian Pharmacy Act 1948

Online availability of prescription drugs will violate provisions of various acts like Pharmacy
Act, Drugs & Cosmetics Act. The Act 32 prohibits import of any drug that is not of standard
quality, any misbranded, adulterated or spurious drug or any drug for requires a license for
import. It also does not permit import of any drug which by means of any statement, design
or device accompanying it or by any other means, purports or claims to cure or alleviate any
disease.33 Imported medicines may be fake, mislabeled and unsafe.
Likewise it also prohibits manufacture and sale of any drug without a license 34. It has
provisions for penalty for manufacture, sale, etc., of drugs in the form of imprisonment and
monetary fine35. It very clearly states in subsection b(ii) without a valid licence as required
under clause (c) of section 18. Recently, an FIR was filed against Snapdeal.com by
Maharashtra FDA for allegedly selling drugs, including prescription drugs, online for
violating provisions of the Drugs and Magic Remedies (Objectionable Advertisements) Act,
1954 and directly contravening Section 18 (c) of the Drugs and Cosmetics Act, 1940, which
prohibits manufacture and sale of certain drugs.36
The Drugs and Cosmetics Act, 1940, and the Drugs and Cosmetics Rules, 1945, have clear
guidelines on the sale of Schedule H and Schedule X drugs, which are restrictive drugs and
can be sold only on the prescription of a registered medication practitioner. Schedule X
drugs include narcotics and psychotropic substances. Chances of drug abuse and addiction
are higher with these drugs. They also require meticulous storage and dispensing records.
The prescription has to be in duplicate, one copy of which is to be retained by the licensed
pharmacist for 2 years37.
31 Subsection 2 of section 42 of Indian Pharmacy Act 1948
32 Section 10 of the Drugs & Cosmetics Act 1940
33 Ibid
34 Section 18 C of the Drugs & Cosmetics Act 1940
35 Section 27 of the Drugs & Cosmetics Act 1940
36 Available at http://www.livemint.com/Politics/9hMPyMKYHTJSu5VVPRJmWO/Government-gearsup-for-epharmacies.html, last visited on 29/08/2016.
37 Supra note 5

Schedule H1 of the Drugs & Cosmetic Act 1945 mandates a licensed pharmacist to maintain
a separate register for sale of drugs that are specified in Schedule H1 with details of the
patient, doctor and the name of the drug/s including quantity; it is to be kept for three years
and is open to inspection by regulatory authorities. Schedule H1 mainly includes potent
antibiotics (like anti-tuberculosis drugs), habit forming painkillers like Tramadol and antianxiety drugs that induce sleep.38
Schedule H1 drugs are also required to have special labeling, with symbol Rx in red to be
clearly displayed on the left top corner of the label and a box warning with a red border - It
is dangerous to take this preparation except in accordance with the medical advice. Not to be
sold by retail without the prescription of a registered medical practitioner.

Pros and Cons in regulating e-pharmacy

Online pharmacies may not abide by these regulations and bypass them. The objective of
Schedule H1 was primarily to check the indiscriminate use of antibiotics in India, in view of
the rising incidence of multi-drug resistant bacteria, a serious public health issue worldwide.
Easy access to antibiotics via online pharmacies will defeat this very purpose.
The Drugs and Cosmetics Act has no provisions for online sale of medicines, or home
delivery of medicines. Hence, online sale of medicines cannot be legally permitted.
The prescriptions submitted via fax/email may be fake and it could be difficult to verify their
authenticity. Online correspondence and/or scanned copies are legally not permitted. Online
pharmacies will promote drug abuse, drug misuse, self-medication etc. Any mediation taken
without the supervision of doctors may be dangerous and even potentially life-threatening.
Pharmacists are not allowed to accept and dispense prescriptions that are brought in by
children. Online pharmacies will provide easy access to controlled drugs or even street drugs
to this vulnerable group.
MCI Code of Ethics 39stipulates that pharmacists and doctors should work together. If online
pharmacies are allowed, then this relationship will be lost.
Many online pharmacies may be operating without the appropriate license. This increases the
chances that drugs sold by such unlicensed pharmacies maybe counterfeit, substandard, or
38 Ibid
39 Regulation 5.3 of MCI Code of Ethics

adulterated and therefore risky to the patient. There are no checks in place to make sure that
the drugs sold by online pharmacies are not spurious.
Medicines have to be stored properly as recommended by the manufacture. Exposure of
medicines to high temperatures in storage or in transit could diminish their efficacy and are a
potential health risk. There is no way to check the storage conditions of the drugs sold by the
online pharmacies.
Regulatory authorities continue to monitor a drug for any adverse effect even after it has been
on the market. If the safety/quality of the medicine comes under question or, if it is
potentially contaminated, mislabeled or is improperly packaged, then they may recall or
withdraw a prescription or OTC drug from the market even after it has been approved.
Sometimes, the manufacturer may voluntarily recall a drug. If online pharmacies are
permitted, the drug recalls become very, very difficult, almost next to impossible.
Breach of confidentiality is another major concern. Online pharmacies may misuse personal
and financial information of the patient as well as of doctors leading to cases of identity
thefts and fraud.40. MCI Code of Ethics 2002, also does not allow a registered medical
practitioner to disclose the secrets of a patient that he/she may have been learnt in the
exercise of his / her profession. Declaration (g) given to doctors at the time of registration
states: I will respect the secrets which are confined in me. 41There is no legislation specific to
data privacy in India as yet. The laws that deal with data protection or privacy in India are
Section 43A of the Information Technology Act, 2000 and the Information Technology
(Reasonable Security Practices and Procedures and Sensitive Personal Data or Information)
Rules 2011. There is a proposed Privacy (Protection) Bill, 2013 (Bill), which focuses on
the protection of personal and sensitive personal data of persons. If passed and enacted, it
will override all existing provisions directly or remotely related to privacy.42
Online pharmacies offer drugs at low cost or at discounted prices to lure customers. If the
online pharmacy gives cheaper alternatives of drug/s prescribed, this violates the doctor40 The WMA 2005 Declaration of Lisbon on the Rights of the Patient gives them the
right to confidentiality, which states that all identifiable patient data must be
protected.
41 Regulation 7.14 of MCI Code of Ethics 2002
42 Ssection 3 of the Privacy (Protection) Bill, 2013 provides that no person shall
collect, store, process, disclose or otherwise handle any personal data of another
person except in accordance with the provisions of this Act and any rules made
thereunder.

patient-pharmacist relationship, which is based on trust. Pharmacy laws in India do not allow
a pharmacist to substitute a brand written by a doctor. Pharmacists are also not authorized to
change potency of the prescribed drug, even if the patient asks for it.
Refilling of a prescription is not allowed by pharmacists unless authorized by the doctor. If
the doctor has prescribed a drug, e.g., 3 days, the pharmacist cannot dispense drugs for more
than this duration.
Online pharmacies may provide rebates and commissions to doctors to provide prescriptions
on the basis of online information that has been filled by the patient. This way doctors will be
vulnerable to malpractice suits. Regulation 6.4 of MCI Code of Ethics prohibits doctors from
giving or receiving any rebates or commissions.
Similar to the online search service Justdial.com, online pharmacies may also promote doctor
substitution, which is unethical. Ultimately online pharmacies will be taken over by
MNCs and Indian laws are not applicable to MNCs.
Indian Medical Association is against online pharmacies in India. This will encourage
substitution of cheaper and spurious drugs by the online stores and the doctor-patient
confidentiality will be affected. And, will be a violation of all the laws quoted above. It will
deny the patient the supervision of the Doctors in the use of medicines. This will encourage
patient to use one prescription repeatedly without the supervision of the Doctor. This can
cause many adverse drug related reactions, it will encourage drug abuse and overuse of habitforming drugs. The medico-legal liability will still fall on the doctor, when a patient misuses
this facility. The service of online pharmacy will be utilized by affluent and educated people.
Hence online pharmacy has no public health benefits or implications; but at the same time it
is loaded with scope for misuse, drug abuse, dependence and adverse reactions.

Conclusion
Online pharmacy in India is a $18 billion market set to grow to $55 billion by 2020 and its
finally beginning to get the kind of attention from investors and entrepreneurs those numbers
warrantdespite uncertainty over the legality of the business itself. The business is online
pharmacies, and according to start-up data tracker Tracxn, so far, the sector has attracted $92.6
million funding with over $70 million coming only in 2015. Almost 31 start-ups were
launched last year, with the major chunk of investment announced by Netmeds ($60 million),
followed by 1MG ($6 million) and Zigy ($3.2 million).
Some of them are no doubt taking heart from the Indian drug controllers approach. In
December 2015, the Drug Controller General of India formed a seven-member panel to look

into the issue of online drug sales. It is very clear that we want this technology in the country
because our aim is to ensure that patients get quick service and of the right quality. We want to
see how the issue can be addressed without compromising on safety. There are chances of
abuse of technology as well that needs to be plugged,
Legality of Online pharmacy is largely about the interpretation of law. For example, the
Pharma Act had no clarity on electronic copy of a prescription. However, the IT Act says that
any digital copy of a document will be valid if there is an original copy which can be
presented at the time of verification,. Most online pharmacies do not sell Schedule X
medicines such as sleeping pills. With more customers willing to shop online for just about
anything, and smartphones facilitating such transactions, the timing is just right for online
pharmacies.