On October 31, 2018, Madras High Court banned the online sale of drugs till November 9, 2018 which caused panic among the online pharmacies. The Court later clarified that the ban was applicable only on unauthorised online drug sellers.

On Wednesday, October 31, 2018, Justice Mahadevan of Madras High Court had passed the interim injunction order while admitting a plea moved by the Tamil Nadu Chemists & Druggists Association against online sale of medicines till November 9, 2018. The association had alleged that purchasing medicines from unlicensed online stores could be risky as it might put the health of patients at risk.

The seller in question clarified that all their medicines were from registered pharmacists and that they also had the valid licence to sell, stock, exhibit, sale, or distribute drugs by retail. They also contended that there were no clear cut laws on sale of medicines online as the laws governing this issue was enacted much before online sale was an option.

The Court then clarified the Order on November 1, 2018 and said that the stay was only on the firms that sell medicines without valid license.

The law pertaining to this issue:

1. The sale of medicines in India is governed by the following laws:
   • Drugs and Cosmetics Act, 1940 (‘the Act’)
   • The Drugs and Cosmetics Rules, 1945 (‘the Rules’)
      
2. Section 18 (c) of the Act and Rule 61 contained in  Part VI of the Rules specify the licenses that need to be obtained by pharmacies for wholesale or retail sale of medicines, the application procedure and the regulations that need to be complied with when selling these medicines.
    
3. Rule 64 and Schedule N of the Rules, provides for the basic conditions that an establishment desirous of operating as a pharmacy must fulfill in order to be eligible to obtain a license for the sale of medicines.
    
4. The State Drug Control Authority is responsible to oversee, grant licenses and regulate the sale of medicines.
    
5. Rule 65 provides for the conditions  that the licenses (issued under Part VI of the Rules) entail.
    
6. The Act or the Rules are silent about the legality of the sale or delivery of medicines outside the licensed premises.
    
7. The Ministry of Health and Family Welfare had come out with draft rules notification GSR 817(E) on August 28, 2018 aiming to regulate online sale of medicines. A pharmaceutical company, as per the draft notification, can register itself by paying a fee of Rs.50,000/- and apply for the grant of registration to the Central Licensing Authority in Form 18AA through the online portal of the Central Government. However, as of the date of this Order, this notification is only in its draft stage. 

Takeaways:

1. The pharmaceutical companies selling drugs online will be given time by the Madras High Court to defend themselves and seek relief from the ban on November 9, 2018.
    
2. According to estimates, the total e-pharma industry in India is less than 0.5% of the retail pharmacy landscape currently, but is growing at more than 100% rate.^[1]
3. In the absence of concrete rules and regulations about sale of drugs by online pharmacies and in the light of the High Court’s clarification, it can be reasonably presumed that the term “valid licenses” will be subject to the  scrutiny, discretion and interpretation of the state drug control authority about the  pharmacy’s compliance with Part VI and other applicable provisions of the Rules and the Act.
    
4. Online pharmacies without the valid licenses would be required to abstain from sale of online medicines until further orders on November 9, 2018 are issued or until the stay is vacated. As this (sale of medicines without requisite licenses) may in addition to being an offence as per Section 27 (punishable with 3-5 years of imprisonment and a fine amounting to 3 times the value of the stock confiscated and/or Rs.1,00,000/-  fine whichever is higher) would also be contempt of court.