Away from high-decibel discussions on the Government’s digital initiatives and their ramifications on the privacy of individuals and sanctity of data, the Health Ministry has taken a step closer towards legitimising online pharmacies.

In a late-August draft notification, the Ministry defines e-pharmacies, outlines the process of registration and licensing and makes a conspicuous note on the health-related data that is available with these online entities from their customer-patients. For the fledgeling online pharmacy segment, official recognition has been pending for a while now, even as it seeks greater clarity on issues like data storage. (see box)

In the offline world, e-pharmacies are a thorny topic and traditional chemists have called for a country-wide strike later this month against legitimising them.

Speaking for e-pharmacies, Dharmil Sheth, co-founder of Pharmeasy, plunges into the heart of the discussion by bringing up data storage and licensing concerns. “We need more discussion on regulatory controls for data storage, especially on where the data servers are located. Having them in India does not necessarily ensure greater secrecy,” he says. In fact, as technology spreads, it should not matter whether servers are in Singapore, the US or Mumbai, says Sheth. If every country takes measures to ensure localisation it could inhibit plans of local companies looking to grow beyond Indian shores, he cautions.

And while strong laws on data privacy are understandable, “sharing data with the Government, will that be fair to a consumer's privacy,” he asks, a concern many are raising. “It is a larger discussion involving customer consent. Besides there will have to be rules under which data is shared and it should be in a controlled environment so there is no leakage of data, as that will erode customer trust” .

Prashant Tandon, co-founder of 1mg, points to the recently-tabled Justice Srikrishna committee’s report on data protection that paves the way for umbrella norms. “There is a possibility that data privacy norms will be outlined under this specifically for digital health,” he says. “Besides, Government will need to articulate under what circumstances it needs consumer data, what will be done with it.”

Online pharmacies are also seeking clarity on licensing and registration requirements. While their registration is to be done with the Central Licensing Authority, there is ambiguity on whether retailers/chemists they link up need similar registrations as well. Since health is a State subject and the retailers linked via the online platforms operate in different States, the local drug regulatory administration comes into the picture.

But local chemists and their inventory networks already have necessary regulatory approvals, say online players, seeking clarity. But Pradeep Dadha, Chief Executive of points out that a “dual” system of governance is similar to the model in developed countries. “It is not over-taxing.”

Question of discounts

However, JS Shinde, President of the All India Organisation of Chemists and Druggists, says that concerns remain on the operation of online pharmacies, be it in terms of not honouring prescriptions while dispensing a medicine or giving massive discounts to customers.

He questions the 50 to 70 per cent discounts given to customers and the advertising by e-pharmacies, when traditional chemists are bound by rules and trade margins under the DPCO (Drugs Price Control Order). “It is unethical competition,” he says, adding that the small chemist will be unable to cope with such “cut-throat competition”.

Responding to concerns on whether a pharmacist dispenses the medicine and whether the last mile connect of delivering the medicine to a customer is secure, 1mg’s Tandon defends online players, saying there are guidelines already governing this and e-pharmacies have systems to ensure that pharmacists are in place, prescriptions are checked and the delivery is done in tamper-proof packages.

Online pharmacies have an advantage in being able to track and trace the sale of a drug. Since e-pharmacies are not allowed to sell narcotic or psychotropic drugs, he says, “habit-forming” medicines are not retailed and in terms of antibiotics etc, the electronic footprint helps keep tabs on misuse, he adds.

But the last word is far from heard in this space, as online pharmacies look to iron out operational ambiguities and traditional chemists prepare to not give in without a fight.