AIOCD Disapproves of RailTels' Plan to Request Online Pharmacy Bids

Nitin Konde, Varun Bhardwaj

Jan 10, 2025 — 3 min read

AIOCD Opposes RailTel’s Online Pharmacy Bid Proposal

The RailTel Corporation of India's plans to solicit bids from "illegal" online pharmacies in order to enable the home delivery of medications from hospitals run by the railways have angered the All India Organisation of Chemists and Druggists (AIOCD). The AIOCD warned in a letter to the Railways Ministry that internet pharmacies operating in the nation are in violation of the present laws controlling medicine and could face legal repercussions.

A media report revealed that the RailTel Corporation's upcoming intention to solicit bids from many online pharmacies based on the savings offered on the retail price of medications prompted the chemists' organisation to respond. To put things in perspective, RailTel is a public sector enterprise (PSU) owned by the Union Ministry of Railways.

Putting his views on the development, Avinandan Choudhary, Founder and CEO of Formis Health, opined, "India’s healthcare landscape is at a crossroads, often framed as a traditional vs. digital standoff. But the real debate is about ensuring control, compliance, and accessibility while embracing innovation. Offline pharmacies are the backbone of our healthcare distribution, but dismissing online platforms entirely would be shortsighted in a world increasingly driven by convenience and digital transformation."

"At Formis, we’ve seen how digital health solutions improve access to care—from quick medicine deliveries to personalised health tracking. RailTel’s initiative to explore online pharmacies on railway platforms is a step forward in bridging the urban-rural healthcare divide, enabling people in Tier 2 and Tier 3 cities to access essential medicines seamlessly," he added further.

Error of Judgment

The AIOCD called RailTel's decision an "error of judgement" and pointed to a number of rulings and regulations that showed the internet pharmacy industry was unlawful. First off, the operations of these pharmacies are prohibited by the ongoing 2018 lawsuits of Dr. Zaheer Ahmed v. Union of India and the South Chemists and Distributors Association (SCDA) v. Union of India. The former Joint Drugs Controller of India, P.B.N. Prasad, observed in a similar case in 2020 that Aarogya Setu Mitra's e-pharmacy services lacked registered or licensed e-pharmacies because the Drugs and Cosmetics Act, 1940, and the Drugs and Cosmetics Rules, 1945, did not contain such provisions.

Going forward, the AIOCD noted that only neighbourhood pharmacies are eligible for the COVID-19 pandemic-era doorstep delivery of medications. This argument was supported by a number of grounds, stating that the Drugs & Cosmetics Act of 1940 forbids such delivery.

According to Section 65 of the Drugs and Cosmetics Act of 1940, the prescription must also include the seller's name and address, the prescriber's signature, and the date of description. As a result, it is unlawful to sell medications using prescriptions that have been submitted online. Lastly, the group called for the RailTel plan to be immediately withdrawn.

Strong Regulation is the Need of the Hour

The Health Ministry published the proposed Drugs, Medical Devices, and Cosmetics Bill in 2022 for stakeholder opinions. Among other things, it included measures for the government to create regulations governing online pharmacies. The government introduced a 2023 version of the law in the Lok Sabha in August, but the regulations have not been issued. The Central Drugs Standard Control Organisation (CDSCO) and the central government have been ordered to create a policy for the online sale of medications on several occasions by the Delhi and Madras High Courts.

With numerous e-pharmacies referring to themselves as "intermediaries" and asserting protection under the safe harbour concept due to the lack of established legislation to regulate them, the delayed notice is especially troubling. To elaborate, a media report stated that e-pharmacies' main responsibilities are to distribute and regulate pharmaceuticals, not intermediaries. The report further added that the idea of intermediaries is faulty because internet medication sales do not require the licence needed to sell pharmaceuticals.

With 85% of the market controlled by PharmEasy, NetMeds, Medlife, and 1mg, the Indian online pharmacy industry is presently valued at $3 billion. In an effort to work with neighbourhood pharmacies, the rapid commerce sector has more recently ventured into 10-minute doorstep medication delivery services with "Flipkart Minutes."