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Why a Chemist association has asked SEBI to reject the PharmEasy IPO

The lack of well-defined regulations governing the online health care sector continues to create uncertainty. SDCA says e-pharmacies are not legal under Indian law.

In a letter to the Securities and Exchange Board of India (SEBI), Delhi-based South Chemists and Distributors Association (SCDA) has asked the regulator to reject the initial public offering (IPO) of PharmEasy on the grounds that online pharmacies are not legal under Indian law. API Holdings, the parent company of PharmEasy, filed its draft red herring prospectus (DRHP) for an IPO with SEBI on November 10. The company is seeking to raise Rs 6,250 crore from its fresh issue portion. In addition to delivering medicines, PharmEasy also provides teleconsultation, lab tests, and other healthcare services. This development once again brings to light the uncertainty surrounding the online health sector due to the lack of proper regulations. The government in August 2018 published a draft policy to regulate e-pharmacies, but these are yet to be finalized. MediaNama has reached out to PharmEasy for a statement and will update this story once we get a response. Why is SCDA objecting to PharmEasy IPO? E-pharmacies not legal under Indian law: SCDA argues in its letter that e-pharmacies are not legal under Indian law and that SEBI should not give approval to such a business and give it "a cloak of legality." SCDA further states that online pharmacies must comply with the regulatory framework in place for traditional pharmacies such as the Drugs and Cosmetics Act, which states that "prescription medicines and drugs can be sold only through a licensed retailer under strict supervision." Delhi High Court 2018 order prohibits the online sale of medicines without a license: SCDA…

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