Predatory Pricing, Illegal Sale? Why Govt Has Shot Notices to e-Pharmacy Giants Like Amazon, Tata 1MG

Amazon, Flipkart, Tata 1MG and other top players in the e-pharmacy market are under the scanner of the Narendra Modi government, once again. The country’s apex health regulatory agency, the Drug Controller General of India (DCGI), has served a show-cause notice to more than 20 top Indian e-pharmacy companies.

In the notice, DCGI VG Somani, warned these companies of “further action” while setting a deadline of two days to respond to the notice.

The reason cited for sending the showcause notice is the contravention of the provisions of the Drugs and Cosmetics Act, 1940 and the rules made thereunder. The notice alleges that these firms were found to be engaged in selling schedule H, H1 and X without a valid licence.

However, this is not the first time that the government has clamped down on e-pharmacies for similar reasons following a long-drawn battle between offline chemists and e-pharmacists.

This time too, the move is driven by the complaint forwarded by the All India Organisation of Chemists and Druggists (AIOCD) to multiple government agencies, including the Prime Minister’s Office (PMO).

AIOCD, which is an apex body of approximately 12 lakh offline chemists across India, had sent advance notice of nationwide agitation from February 15 against inaction by the government agencies on the illegal sale of drugs on the online platform with predatory pricing.

News18.com reached out to Amazon, Tata 1MG and Flipkart for official comments but didn’t receive responses immediately. The report will be updated if and when the companies respond.

How AIOCD Triggered the Latest Clampdown?

The lobby has claimed that the entire medicine trade community has been facing an “existential threat” due to unethical practices of “big corporate houses” and “so-called e-pharmacies operating, disregarding provisions of drug laws”.

It also claimed that with the rise of online pharmacies, a “sudden rise has been started (sic) in duplicate and spurious drugs”.

It alleged that due to online apps, it is easy to access “narcotic drugs, pregnancy termination kits, antibiotics, sedatives…”

“Result of dominance by corporate entities with illegal sale of medicines on internet and predatory prices with cash burns, the livelihood of 12 lakh members their families and dependants over 4 crores population has been facing threats of survival (sic),” AIOCD president JS Shinde said.

In another letter shot to the members of the lobby, Shinde shared the details of his meeting with Union health minister Dr Mansukh Mandaviya and other senior government officials.

Shinde, who met the top officials of the ministry, conveyed to his industry members that the minister patiently heard the demands and assured them that all the points mentioned by AIOCD will be considered sympathetically in the proposed New Drug Act.

“The Drug Controller General of India (DCGI), as per his circular dated 3 February 2023, will immediately take action against illegal online players,” Shinde told the office-bearers in a letter.

The meeting was attended by Secretary-Pharma S Arpana, Secretary-Health Rajesh Bhushan, NPPA chairman Kamlesh Pant and DCGI Somani among other officers.

E-Pharmacy Industry Not Concerned

E-pharmacy Industry officials believe that this is just a re-iteration of an old order and “nothing new”.

“The court is still hearing arguments and the matter has been sub-judice since 2018,” said an industry official who heads a prominent e-pharmacy chain and has received the showcause notice.

“This does not concern our model given we have always been fully compliant with all provisions of the Act. All our facilities have all the requisite and available licences in place… Every dispensation through our platform comes with a valid bill mentioning the drug licence as required.”

While these companies will be responding to the authorities as required, they do not believe there is any reason for concern.

They believe that e-pharmacy has evolved into an organised market, all of the players are dispensing the orders as per the provisions of the D&C Act and Rules. “The market is ruled by players like Tatas and Amazons of the world. First thing they would do is to be legally accurate and follow the laws of the land,” an industry insider said.

Another industry source said: “Frankly, I am a bit surprised that the DCGI, who is in his final few months, has decided to send this notice for a matter that has been there well before he took office.”

“Not sure what the motivation is, but AIOCD has been fairly aggressive lately. However, just last week the ministry responded in Parliament to a question on online pharmacy and we are all surprised what could trigger such a move.”

Last week, the Union Ministry of Health and Family Welfare in Parliament said that in order to regulate the online sale of medicines comprehensively, the Government of India has published draft rules for inviting comments from public/stakeholders for amendment to the Drugs and Cosmetics Rules, 1945 for incorporating provisions relating to regulation of sale and distribution of drugs through e-pharmacy.

Read all the Latest India News here