Tata 1mg, NetMeds, Practo in a fix? Centre may shut online pharmacies over data misuse, say sources

The Center is considering closing online pharmacies or e-pharmacies in the country due to misuse of data, sources told Zee Business. The move comes close on the heels of drug regulator Drug Controller General of India (DCGI) sending show-cause notices to 20-odd e-pharmacies, including Tata 1mg, Amazon, Flipkart, NetMeds, MediBuddy, Practo and Frankross.

A group of Union ministers also backed action restricting online pharmacies.

The Health Ministry is working on a policy to regulate the country's e-pharmacy market, one of the sources said.

WATCH: Explained: Centre likely to shut e-pharmacies

Last month, DCGI sent notices to the string of companies running online pharmacies, asking them to explain why action should not be taken for selling and distributing drugs in contravention of provisions of the Drugs and Cosmetics Act 1940.

According to the drug regulator, the sale, stocking, exhibition, offer for sale or distribution of drugs through online means without a license could affect the quality of the drugs and pose danger to public health through self-medication or indiscriminate use of drugs.

The regulator had asked the companies to respond within two days.

Why restrictions on e-pharmacy operators?

The possible restrictions on the segment are in view of alleged malpractices related to data privacy, sales of medicines without prescription and predatory pricing.

The e-pharmacy market, a fast-growing business segment, also has the likes of Flipkart Health Plus, Apollo Pharmacy, Amazon Pharmacy, PharmEasy, Amazon, MedPlus and Reliance Netmeds as key players.

The government is working on rules pertaining to online pharmacies in the country and has sought views of various stakeholders in the segment.

The pharmaceutical industry is significant and crucial in India. The country's e-pharmacy market is estimated to grow at a CAGR of 42 per cent between financial years 2020-21 and 2024-25 to reach Rs 20,500 crore, according to Zee Business research.

The Indian pharma market was estimated to be worth $41 billion in 2021, cementing its position as the third-largest market in value and volume, according to a report by the National Library of Medicine.