E-pharma companies talk rules with officials at G20 Goa meet

The sources said the companies have been asked to share a formal presentation to the government on the benefits of e-pharmacies and their compliance status as well as what are the challenges the segment is facing at a time demand for online medicine continues to be high. This, the sources said, is part of the consultation process before bringing any new regulation into effect.

According to people present in the meeting, officials have indicated that a complete ban on online sales of pharmacies is unlikely, bringing a sigh of relief to the platforms. They have also been suggested to submit a report on consumer benefits through such platforms beyond just discounts on the sale of medicines and lab tests.

After submitting a formal presentation, these companies are expected to meet health minister Mansukh Mandaviya next month.

These discussions in Goa are of significance as they mark a coming together of the government with the online pharmacy players after several failed attempts by the latter to put across its views on regulations.

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“We had a good meeting and were at least able to put forward our thoughts and perspectives. Digital Health Platforms (DHP), the industry association, will be preparing the presentation to be given to the government,” one of the people aware of the matter said. “They have asked for this so they can take our inputs before finalising any regulation.”

The DHP is also looking to play a more active role in industry consultations going forward, this person said. “We are in the process of adding more members now, including Flipkart and Amazon India.”

PharmEasy and 1mg are key members of the DHP. Walmart-owned Flipkart runs epharmacy business through Flipkart Health+ while Amazon has Amazon Pharmacy.

“There is a slight sense of relief that there won’t be any outright ban and now there is more dialogue happening. There will be more clarity on various aspects or regulating the space after meeting with the health minister,” one of the sources added.

Emails sent to Flipkart and Amazon did not elicit any response, while spokespersons of PharmEasy and 1mg declined to comment on the G20 meetings.

Multiple sources aware of the deliberations in Goa said the discounts offered by online platforms was the main factor that had irked the offline traders and led them to complain to the government. “It’s not that platforms are discounting any longer as they need to save capital amid the current funding winter. But the perception is still there and we will highlight other aspects of what online ordering of medicines, doctor consultations and lab tests can do for consumers broadly,” this person added.

On February 8, the Central Drugs Standard Control Organisation (CDSCO) sent show-cause notices to 20 e-pharmacies, including Tata 1mg, Amazon, Flipkart, Reliance Retail-owned NetMeds, MediBuddy, Practo and Apollo, over the online sale of drugs in an alleged violation of rules.

Following this, companies, through industry associations, had reached out to the health ministry to explain their viewpoint. According to the sources, companies had even responded to the show-cause notices, which flagged that the online pharmacies were operating without the requisite licences.

E-pharmacies, in their response, said that the notices served by the Drugs Controller General of India (DCGI)were “a cause for anxiety” for the industry, ET reported last month.

India’s e-pharmacy segment is backed by some of the top global investors including Tiger Global, Sequoia Capital, Temasek and Prosus, in addition to local conglomerates such as Reliance Industries and the Tata Group.

In January, an association of chemists and druggists had issued an advance notice to go on a nationwide agitation from February 15 opposing e-pharmacies. The organisation postponed the agitation indefinitely after meeting minister Mandaviya and health ministry officials on February 8 – the day when the government started issuing show-cause notices to online pharmacies.

Last month, the health ministry revised the draft of the New Drugs, Medical Devices, and Cosmetics Bill, to add a clause that empowers the government to “regulate, restrict or prohibit” any sale, stocking or distribution of any drug by online mode, by issuing a notification.

This draft was circulated to government departments for internal consultations, and replaced the proposed legislation released to the public in July 2022 for stakeholder comments.