Delhi, Madras High Courts differ on online medicine sales by e-pharmacies

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Online pharmacies may be headed for confusing days owing to differing views taken by the Delhi and Madras high courts over sales. On Thursday, a division Bench of the Delhi HC extended the ban on sale of medicines by e-pharmacies till January 8. On the same day, a division Bench of the Madras HC overturned a single-judge order allowing online sale of medicines.

A two-judge Bench, comprising Justice M Satyanarayanan and Justice P Rajamanickam, of the Madras HC suspended an order passed by Justice Pushpa Sathyanarayana of the same court banning online sale of medicines. The order by Justice Sathyanarayana was to take effect from Thursday morning. The interim relief to online pharmacies will be in place until a final order of the court comes, the division Bench said.

The division Bench of Delhi HC, which was made aware of the matter pending in Madras HC by counsels appearing in the case, initially observed that it would wait for the Madras HC ruling and that the order passed by court would be binding on all companies. Owing to confusion between the lawyers, however, the Delhi HC extended its ban till January 8.

Delhi HC’s two-judge Bench, comprising Chief Justice Rajendra Menon and Justice V K Rao, had on Tuesday said that once the rules came into play, online pharmacies could start selling medicines. “Problem is that today there are no rules regulating it,” the Bench said.

With two conflicting orders, online medical retailers are likely to differ in their approach. The smaller players are likely to continue selling, while the bigger ones, backed by foreign investors, are likely to take a more conservative approach, Ashish Bhan, partner at law firm Trilegal, said. “Such a conflict happens rarely. What could happen now is that someone would apprise the Delhi HC of the Madras HC order. Or they are likely to approach the Supreme Court,” Bhan said.

In Madras, six online pharmaceutical companies and a Digital Health Platform, formed by the major firms in the segment, had sought to be impleaded in the original petition moved by the Tamil Nadu Chemists and Druggists Association (TNCDA). In their plea before the Madras HC, these firms had said there were nearly 20,000 people working in the online e-pharmacy sector, catering to the demands of nearly 1.5 million people.

TNCDA has argued that existing regulations have no provision for selling medicine through the online route. The fact that draft rules are still under consideration show that the online sales were not legal. Drugs, the association had said in its plea, could only be sold by a registered pharmacist against a prescription, and only from premises that has licences from the regulatory authority.

There are two types of online pharmacies, one acting as aggregators, to connect between registered pharmacists and the consumer, and the other that have their own registered pharmacists and medicine stock and sale licences. Companies that approached the Madras HC on Thursday expressed satisfaction at the ban being suspended for the time.

The industry is expecting amended rules for online sales of medicine under the old Drugs and Cosmetics Act to be notified soon. The order by the single-judge Bench of Madras HC had directed the Central government to notify these rules by January 31. From a market size of $12.6 billion (Rs 883 billion) in 2009, the Indian pharma market is expected to grow to $55 billion or Rs 3.9 trillion by 2020, with the potential to reach $70 billion in an aggressive growth scenario. The e-pharmacy market has the potential to be huge even if it manages to capture a fraction of the offline market.  

Story so far
  • December 12: Delhi HC division bench bans sale of medicines by e-pharmacists
  • December 17: Madras HC single judge bans sale of medicines by e-pharmacists
  • December 18: Delhi HC says ban to be in place until rules are framed by Centre
  • December 20: Delhi HC division bench extends ban till Jan 8
  • December 20: Madras HC division bench suspends ban, says cos can sell for now

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