FSSAI’s Product Approval Scheme Is Impacting Health And Nutraceutical Industry Of India

FSSAI’s Product Approval Scheme Is Impacting Health And Nutraceutical Industry Of IndiaThe dietary and health supplement, functional food and nutraceutical legal and regulatory compliances in India have taken a totally different meaning in the contemporary information and communication technology era. Use of e-commerce model has not only expanded the horizons and territories of these businesses but it has also imposed techno legal compliance requirements upon them.

As on date the requisite techno legal regulatory framework for dietary and health supplement, functional food and nutraceutical segments is missing. Till now the Indian Parliament has not been able to integrate the techno legal compliance requirements of these fields through dedicated laws. As a result multiple laws are applicable to these businesses especially if they explore the e-commerce method.

Recently the Bombay High Court stayed the scheme of product approval by FSSAI for six months after considering it as ambiguous. However, this stay is causing inconvenience and losses for the dietary supplement, health supplement, functional food and nutraceutical industry of India.

The stay on product approval process would continue until August 2014, but port authorities have been demanding product approvals from importers of dietary supplements and nutraceuticals. The authorities refused to send the landed products for testing without the product approval. As a result, no clearance would be made for the import of goods in India. Further, even applications made for product approvals are pending approval or rejection for years. These conditions have affected the business of these segments.

A large number of food business operators (FBO) are also exporting nutraceuticals and dietary supplements to developed markets like the United States and Europe, where there is no such product approval system. However, there are adversely affected by the uncertain regulatory regime in India. Most of these FBO are not at all aware of the techno legal requirements that they have to comply with while selling their products through websites and e-commerce portals.

The impugned product approval scheme by FSSAI initially limited the requirement of product approval for novel foods that contain ingredients which are introduced for the first time in the country or which do not have a history of safe use. However, the scope of scheme was extended to cover all categories of products which are not standardised, even if they were old and established in the market.

As a result a writ petition was filed in the Bombay High Court against such scheme. Till now FSSAI has not been able to justify its power to issue regulations/scheme by showing that Indian Parliament approved the same.  In the interim stay on January 31, 2014, the Bombay High Court stayed the product approval advisory dated May 11, 2013 for a period of four weeks from February 4, 2014. While the High Court extended the period for conversion of old licences by a period of eight weeks in an advisory issued recently, FSSAI extended the same by six months until August 2014.

Dietary And Health Supplement, Functional Food And Nutraceutical Legal And Regulatory Compliances In India

Dietary And Health Supplement, Functional Food And Nutraceutical Legal And Regulatory Compliances In IndiaThe market for dietary supplement, health supplement, functional food and nutraceutical is fast developing in India. With this development the health, food and medicine related legal compliances in India have also increased a lot. Most of the contemporary healthcare and nutraceutical companies and businesses have started using e-commerce as a method of sales, growth and development. This has given rise to many techno legal compliances on their part.

For instance, fields like online pharmacies, ayurveda, healthcare technology, nutraceuticals, e-health, m-health, telemedicine, etc require compliance with techno legal requirements as prescribed by various legislations of India. These include compliance with laws like Prevention of Food Adulteration Act, 1954 and Rules 1955 (PDF), Food Safety and Standards Act, 2006 (PDF), information technology act, 2000, etc. A complete list of various laws that are required to be taken care of by various healthcare and nutraceutical companies and businesses can be accessed here.

When business is done through e-commerce mode, cyber law, cyber security and data security compliances are also required to be taken care of. Internet intermediary liability and cyber law due diligence (PDF) must be taken care of beforehand before launching a website in these fields. The position has become so clear now that cyber due diligence cannot be ignored by Indian companies anymore.

Food Safety and Standards Authority of India (FSSAI) has been playing an important role in ensuring proper safety and security of food products in India. There are other regulatory authorities as well that come into picture when e-commerce mechanism is used by the stakeholders under this segment.

In their own interest, dietary supplement, health supplement, functional food and nutraceutical stakeholders must comply with techno legal compliance requirements as prescribed by various law of India if they wish to continue the e-commerce model.

Online Sale Of Prescribed Drugs In India Under DGCA Scanner

Online Sale Of Prescribed Drugs In India Under DGCA ScannerOnline pharmacies in India are operating in an unregulated and illegal manner. Similarly, the Ayurvedic and Nutraceuticals e-businesses are also not complying with Indian laws and regulations and are operating illegally. All this is happening even after the websites pertaining to online pharmacies, Ayurvedic products, Nutraceutical products, etc were contemplated to be put under regulatory scanner.

For too long the regulatory action was pending and missing. After much debate the regulatory authorities have decided to take illegal online pharmacies seriously. The Maharashtra FDA has already approached DCGI for regulating illegal online pharmacies within the state. The Hyderabad drug authorities are also keen on regulating illegal sale of drugs through online mechanism. In this regard, the online sales of drugs like anti-depressants, anti-hypertensives and sildenafil citrate (used for erectile dysfunction) without prescriptions have been brought to the notice of the drug authorities.

A drug control officer said the issue was that these activities were being carried out clandestinely by a group of pharmacists and also by companies. While in other parts of the country raids have been carried out, there have only been complaints from time to time about the illegal sale of these drugs in the state. Before it reaches alarming levels, the Drugs Controller General of India has been asked to monitor these activities.

Deputy director of the Drugs Control department, Hyderabad, Nagabhusam P. said, “These are addictives. In all our forums we have been explaining that online sales are illegal. Companies or individuals must not indulge in it.” There are some who are taking prescriptions from doctors on smartphones and then ordering the drugs. The number is less now but it can slowly become a huge burden.

Thus, mobile health related laws and regulations in India have added another dimension to these complicated legal norms. If a medical device is also sold by these online pharmacies that intend to serve a health/medical purpose, the mobile health and telemedicine related legal issues would also arise.

The regulatory and legislative measures to check online pharmacies trading in banned drugs in India are also in pipeline. The digital communication channels for drugs and healthcare products in India are also subject to numerous regulatory compliances. All these issues require implementation of techno legal measures on the part of Indian government.

The online sale of prescribed drugs and medicines in India is a very controversial area. Most of the online pharmacy stores in India and Ayurvedic products websites are unable to comply with the requirements of Indian laws. There are many techno legal requirements pertaining to privacy, data protection (PDF), encryption, cyber law due diligence (PDF), Internet intermediary obligations, cloud computing, etc that are required to be complied with by online pharmacy stores and Ayurvedic products websites operating in India.

Maharashtra FDA Approaches DCGI For Regulating Illegal Online Pharmacies Operating In India

Maharashtra FDA Approaches DCGI For Regulating Illegal Online Pharmacies Operating In IndiaIllegal online pharmacies in India have become life threatening nuisance but Indian government has still not deemed it appropriate to tackle this problem. The truth is that online pharmacies in India are operating in an unregulated manner. This is despite the fact that we have well established laws for opening an online pharmacy store in India. Even the Ayurvedic and Nutraceuticals e-businesses are required to comply with Indian laws to operate legally.

Health, food and medicine related legal compliances in India have become really stringent. A good compilation of food, health, cosmetics, drugs, medicines and nutraceutical laws, rules and regulations in India has been provided by Perry4Law for the larger benefit of all healthcare stakeholders.

As on date, the online pharmacies, including Ayurvedic e-commerce websites, in India are not at all complying with the legal requirements pertaining to their operation in India. Rather they are actively violating the laws of India in this regard. Illegal and unregulated online sale of prescribed medicines in India is still happening despite the threat of the Directorate of Drugs Control of India to punish such illegal pharmacies. Similarly, Ayurvedic preparations and products are openly sold in active violation of Indian laws and regulations.

The online sale of prescribed drugs and medicines in India is a very controversial area. Most of the online pharmacy stores in India and Ayurvedic products websites are unable to comply with the requirements of Indian laws. There are many techno legal requirements pertaining to privacy, data protection (PDF), encryption, cyber law due diligence (PDF), Internet intermediary obligations, cloud computing, etc that are required to be complied with by online pharmacy stores and Ayurvedic products websites operating in India.

Mobile health related laws and regulations in India have added another dimension to these complicated legal norms. If a medical device is also sold by these online pharmacies that intend to serve a health/medical purpose, the mobile health and telemedicine related legal issues would also arise.

The regulatory and legislative measures to check online pharmacies trading in banned drugs in India are also in pipeline. The digital communication channels for drugs and healthcare products in India are also subject to numerous regulatory compliances. All these issues require implementation of techno legal measures on the part of Indian government.

In one such step, the Maharashtra Food and Drug Administration (FDA) has approached the Drugs Controller General of India (DCGI) to device an action plan for curbing the illegal online sale of medicine.  Stating it as a nationwide phenomenon, an FDA official maintains that they are in constant touch with DCGI to plug the loophole in terms of enforcement of the drugs act before it culminates into an alarming situation.  FDA officials say this is a huge racket as foreign buyers can obtain prescription drugs including addictive anti-depressants, anti-hypertensives and those containing sildenafil citrate (a key component in drugs for erectile dysfunction also used to treat pulmonary arterial hypertension) easily and beat stringent rules in their local markets. A senior FDA official has informed that FDA has till date seized drugs worth over Rs. 2 crore from various parts of the city over the last one month and are still on the lookout for more companies involved the illegal sale of prescription drugs.

Online purchase of medicines is a clandestine activity and as Maharashtra FDA Commissioner pinpoints, “It is an unorganised trade and forms a miniscule part of the total Rs. 80,000 crore export business potential accounted from India. We are still investigating the matter and more such companies might face action for illegal sale of drugs without a license and prescription in contravention to Section 18 C and 18 (a) (6) and may attract penalties under Section 27 (b) and (d) ranging from 3 years imprisonment or fine upto Rs. 10, 000 or 5 years imprisonment or fine above Rs. one lakh.

It is only natural that more such legal actions would be taken against illegal online pharmacies websites in the near future. It would be a prudent exercise to comply with the techno legal requirements in this regard by the online pharmacies and Ayurvedic products websites as soon as possible.

Nutraceutical E-Commerce Legal Issues In India Are Ignored By Entrepreneurs

Nutraceutical E-Commerce Legal Issues In India Are Ignored By EntrepreneursHealthcare, food and nutrition are the upcoming fields in India. Many Indian and foreign entrepreneurs and business houses are looking toward Indian market in these fields. Most of them are aiming at the e-commerce segment to expand the reach of their products and services to maximum possible consumer base in India.

There are very specific and complicated techno legal requirements in these fields that must be followed by these stakeholders before they start their businesses in India. Fields like online pharmacies, ayurveda, healthcare technology, nutraceuticals, etc are required to comply with techno legal requirements as prescribed by various legislations of India.

An indicative list of Indian laws applicable to nutraceutical include the Prevention of Food Adulteration Act, 1954 and Rules 1955 (PDF), the Fruit Products Order, 1955, the Meat Food Products Order, 1973, the Edible Oils Packaging Order, 1998, the Vegetable Oil Products Order, 1998, Food Safety and Standards Act, 2006 (PDF), the Milk and Milk Product Amendment Regulations-2009, etc.

The foreign investors making investment in these healthcare, food and nutrition fields are also required to ensure cyber law due diligence (PDF) so that they may escape from civil and criminal liabilities in India. Even the IT companies developing e-commerce websites in India are required to ensure that the websites created by them are in compliance with Indian laws. However, in the ultimate analysis it is the responsibility of the website owner to ensure that he/she/it is complying with legal issues of e-commerce in India.

Most of the healthcare, food and nutrition entrepreneurs of India are not complying with the regulatory requirements of India and other jurisdictions. Further, the conflicts of law in cyberspace have made them liable under different jurisdictions at the same time. For instance, illegal online pharmacies are on scrutiny of Google and Federal Authorities of U.S. Similarly, healthcare, food and nutrition entrepreneurs of India targeting foreign markets like U.S. would also be required to comply with the laws of atleast India and U.S. Unfortunately, as on date this is not happening and this is also making these entrepreneurs liable to penal actions.

India is emerging as a business hub for domestic and international manufactures of nutraceuticals, health and food products. With an increasing awareness about nutraceutical products, India is expected to be the largest market for fast-moving health goods (FMHG) in the near future. None can doubt the importance of micronutrient and protein management in preventing diseases and improving the health. However, India is also the place where maximum numbers of nutraceutical entrepreneurs are operating without complying with Indian laws.

Lack of awareness about the applicable legal provisions is the main reason why nutraceutical e-commerce legal issues in India are ignored by entrepreneurs. Nutraceutical combines the fields of “nutrition” and “pharmaceutical” and this make their regulatory governance tedious and difficult to manage. Under Canadian law, a nutraceutical can either be marketed as a food or as a drug and the terms “nutraceutical” and “functional food” have no legal distinction. In U.S. law, the term has no meaning, and “nutraceutical” products are regulated as drugs, dietary supplements, food ingredients, or food.

Due to lack of international harmonisation and conflict of laws, international market of nutraceuticals has still not matured. Nutraceuticals from the international market may claim to use organic or exotic ingredients, yet the lack of regulation may compromise the safety and effectiveness of products. Companies looking to create a wide profit margin may create unregulated products overseas with low-quality or ineffective ingredients.

Consignments of such products may be seized and destroyed at the borders while crossing the territorial limits of the country of export. The websites of such companies may also be shut down in foreign countries like U.S.

India nutraceutical e-commerce companies must not only comply with Indian laws but they must also comply with laws of other countries like U.S. if they intend to export their products in such countries.

E-Commerce Due Diligence In India Is Neglected By Investors And Financial Institutions

E-Commerce Due Diligence In India Is Neglected By Investors And Financial InstitutionsAny law abiding e-commerce business activity is compulsorily required to comply with numerous legal provisions of not only the place where it is operating but also the potential markets that such venture is exploring. With the conflict of laws in cyberspace, the legal compliance requirements regarding e-commerce ventures have become really cumbersome.

E-commerce stakeholders like healthcare technology, online pharmacies, ayurvedic companies, e-health, m-health, telemedicine, websites developers and owners, mobile application developers, online poker websites, online gaming websites, online lottery websites, online gaming and online gambling websites, e-gaming websites, payment gateways and POS terminal services, mobile payment makers, etc are required to comply with numerous techno legal compliances.

However, as on date most all of the e-commerce stakeholders of India are not complying with the techno legal requirements as prescribed by various laws of India.  The issues of privacy rights, data protection (PDF), cyber security, data security, cyber security breach reporting, biometric collection compliances, etc are still ignored by Indian e-commerce businesses.

In particular, e-commerce due diligence in India (PDF) is grossly neglected by Indian e-commerce businesses. What is most surprising is the fact that even venture capitalists and private equity makers are also investing without ensuring that these e-commerce ventures are complying with techno legal requirements of Indian laws. Perry4Law believes that cyber law due diligence is an absolute must for foreign investors in e-commerce and technology ventures of India. Similarly, online payment platforms, financial institutions, banks, etc are also required to comply with techno legal laws of India.

Effective, speedier and economical dispute resolution is also an essential component of successful and effective e-commerce platform. Online dispute resolution (ODR) must be suitably integrated into the e-commerce dispute resolution structure of all e-commerce websites. The European Union is very particular in this regard and it is encouraging its member countries to use alternative dispute resolution (ADR) and ODR for resolving consumer and e-commerce disputes. The U.K. government has even started consultation on use of ADR to help U.K. consumers resolve complaints and disputes.

In nutshell, e-commerce websites and their investors/financers must absolutely ensure that their ventures are in strict compliance with the cyber law, cyber security norms, data protection requirements, privacy protection requirements, cyber crime protection, financial and e-commerce frauds protection, encryption laws, cloud computing compliances, etc. Collectively these techno legal compliances would constitute the regulatory regime for various e-commerce businesses of India.

Cyber Law Due Diligence Must For Foreign Investors In E-Commerce And Technology Ventures Of India

Cyber Law Due Diligence Must For Foreign Investors In E-Commerce And Technology Ventures Of IndiaForeign investors are exploring investments options in Indian technology venture and e-commerce business through direct and indirect means. Many e-commerce players have been benefited by this foreign investment drive. These foreign investors are also doing legal due diligence before investing in technology ventures and e-commerce business in India.

However, foreign investors are not taking care of cyber law due diligence requirements (PDF) as prescribed by Indian laws. In particular, they are exposing themselves to Internet intermediary liability and cyber law violations under the Information Technology Act, 2000 (IT Act, 2000). Further, they are also not ascertaining whether the technology ventures and e-commerce businesses have complied with legal issues of e-commerce in India.

For instance, investors like Netprice, SoftBank, SBI Holdings, Hitachi, etc have been on an investment spree in India. They have invested into many technology startups and e-commerce ventures in India. However, it is not clear how many of them have actually conducted a cyber law due diligence requirement as per Indian laws.

Take the example of online payment market of India in which foreign investors have shown great interest. The mobile payment market of India is booming but most of the mobile payment service providers are not complying with Indian laws. Now if the foreign investors and the people doing legal due diligence themselves are not aware of the cyber law due diligence requirements, these violations would go unnoticed and would create legal troubles in the future.

Many foreign companies are presently facing litigations in India for violating Indian laws. The Google’s online defamation case is the leading example of this scenario that is going to increase in the near future as cyber litigation against foreign websites and companies is going to increase. Taking clue from these developments, Apple has recently decided to remove Blockchain application from its app store.

The legal risks for websites companies developing e-commerce and online gaming websites in India have also increased significantly. Similarly, entrepreneurs dealing with the fields like encryption, cloud computing, m-health, telemedicine, online pharmacies, Bitcoins exchanges, adult merchandise, online travel, online gaming including online poker, etc are not complying with techno legal requirements of Indian laws. Investing in such legally risky ventures is not a viable strategy.

We at Perry4Law recommends that while investing in online businesses and e-commerce businesses it is a good idea to pay more attention to cyber law due diligence than a simple legal due diligence as the latter fails to cover the legal risks arising due to techno legal aspects.

Online Payment Market Of India And E-Commerce And Online Business Legal Compliances

Online Payment Market Of India And E-Commerce And Online Business Legal CompliancesOnline payment has become an easy and convenient method to pay bills and other charges from the ease of an individual’s home. Many entrepreneurs in India have started exploring online bills payment and online expenses reimbursement e-commerce models in India. This is a clear indication that online payment market of India is going to flourish in the near future.

However, while starting an online payment portal or e-commerce website in India, the entrepreneurs must also keep in mind the requirements of Internet intermediary liability in India and cyber law due diligence in India (PDF). There are many legal issues of e-commerce in India that various online payment service providers of India must comply with. Perry4Law has already specified the cyber law due diligence requirements for Paypal and online payment transferors in India.

The integration of online payment with virtual currency is another challenge that has to be addressed by online payment service providers of India as it involves many legal risks. The Bitcoins exchanges operating in Indian are not complying with the legal requirements and this is attracting the attention of Indian law enforcement agencies. The Enforcement Directorate (ED) has already searched few Bitcoin websites in India as it believes that Bitcoins money can be used for hawala transactions and funding terror operations. Indian corporates have started lobbying for regulating digital currencies like Bitcoins in India.

The Indian banking regulatory environment in India is fast changing though much still has to be done in this regard. The banking, financial and regulatory environment in India is becoming very conducive for online payment market of India. A Code of Bank’s Commitment to Customers by Banking Codes and Standards Board of India (BCSBI) has also been prescribed to empower banking customers. The Securities and Exchange Board of India (SEBI) would also release corporate governance rules for the Listed Entities in India.

Companies like PayPal have already realised the potential of online payment markets of China and India. PayPal is planning to make its presence in India and China more prominent. Another reason why companies like PayPal are entering into Indian market is the strong growth of e-commerce in India. With the growth of e-commerce and e-governance in India, online payment market would also grow. For instance, electronic delivery of services in India would also result in a parallel growth of online payment platforms in India.

In fact, an electronic delivery of services bill of India 2011 has already been adopted by Indian government and it may become an applicable law very soon when the parliament of India clears the same. Add to this the initiatives of mobile governance in India. Very soon we may have an implementable m-governance policy of India. Also an integrated modern banking law for India is in pipeline that may strengthen online payments making in India.

While things are happening in the right direction yet there are some shortcomings as well. For instance, a majority of e-commerce payments are still made in an offline manner. The cash on delivery may harm e-commerce in India in the long run. A shift toward online payments is not only desirable but is also inevitable.

Similarly, e-commerce players, online payment companies and websites in India are still not aware of the key provisions of cyber law of India. E-commerce players and online payment management companies are still not aware about the Information Technology (Intermediaries Guidelines) Rules 2011 (PDF) of India.

Similarly, both e-commerce platforms and online payment companies are required to ensure cyber law due diligence in India. The cyber law due diligence for Indian companies is very stringent and there is no reason to take it lightly. In fact, cyber due diligence for foreign and Indian websites in India is an issue that is frequently agitated before Indian courts. Further, legal requirements of undertaking e-commerce in India must also be strictly followed.

While the opportunities for e-commerce and online payment companies are great yet the corresponding obligations are also equally troublesome. If e-commerce and online payment companies wish to make good profits they have to ensure sound compliance with Indian laws, especially the cyber law of India.

Online Pharmacies In India: Legal Requirements

Online Pharmacies In India Legal RequirementsPharmacies across the Indian are regulated by various laws prescribed by India in this regard. When websites are used to expand the pharmacy business and activities, certain additional laws and regulations are required to be complied with by such online pharmacies.

The pharmaceuticals e-commerce legal issues in India are now well established. Even the Ayurvedic e-commerce legal issues in India are evolving. However, despite this fact, the illegal and unregulated online sale of prescribed medicines in India is on rise. Now even the Ayurveda websites have joined this race and they are offering their products in active violation of various Indian laws.

Though healthcare is a very lucrative field in India yet it is also very vast in nature. The legal formalities required to provide online health related services are too vast and complicated to be easily understood. As a result, the healthcare industry of India is violating the laws of India while providing respective services.

We have different set of rules and laws for m-health, e-health, telemedicine, online pharmacies, online sale of prescribed drugs and medicines, e-ayurveda, etc. The digital communication channels for drugs and healthcare products in India must also be in strict conformity with Indian laws.

Even the website companies that are designing, uploading and managing these websites are vulnerable to many legal risks. The legal issues of e-commerce in India are also required to be complied with online pharmacies entrepreneurs in India. In fact, the online pharmacies websites of India are already under regulatory scanner of Indian government.

Online pharmacies websites are Internet intermediaries within the meaning of Information Technology Act, 2000 and they are also required to comply with cyber law due diligence requirements (PDF) in India.

E-commerce websites in India are required to comply with many legal requirements in India. These legal requirements are also required to be complied with by online pharmacies websites operating in India.  This must be done in a voluntary manner and before any law enforcement agency starts prosecuting such online pharmacy websites in India.

Ayurvedic E-Commerce Legal Issues In India

Ayurvedic E-Commerce Legal Issues In IndiaIndia is presently witnessing the booming alternative medicine market and many entrepreneurs have decided to plunge into this pool. The traditional reach of Ayurveda is limited and only those who have express knowledge about the Ayurveda clinics and establishments approach them.

Despite its limited growth in India, Ayurveda has found favour with western countries and tourists and residents of these countries frequently visit India to avail the benefits of Ayurveda. Indian Ayurveda practitioners and clinics have also realised that Ayurveda is a field that is going to flourish in the near future.

In order to expand their reach these Ayurveda practitioners and clinics are trying to explore the e-commerce route. Although this is a good strategy yet this also requires techno legal compliances on the part of Ayurveda practitioners and clinics.

Recently the classical ayurvedic medicines that were sold with prefixes and suffixes were banned by ministry of health and family welfare of India under Drug and Cosmetic Rules. The ban has been imposed to stop the alteration in the classical formulation of Ayurvedic medicines. Many ayurvedic medicines such as Chyawanprash, Rhumayog and others are currently marketed under different brand names, with prefixes and suffixes to reflect the value added qualities.

This is just a single example of the legal compliances that the Ayurveda practitioners and clinics in India are required to comply with. If these Ayurveda practitioners and clinics plan to use the e-commerce model to reach unlimited population, they have to comply with additional legal provisions to stay legal.

We have different set of rules and laws for m-health, e-health, telemedicine, online pharmacies, online sale of prescribed drugs and medicines, e-ayurveda, etc. The digital communication channels for drugs and healthcare products in India must also be in strict conformity with Indian laws.

Even the website companies that are designing, uploading and managing these websites are vulnerable to many legal risks. The legal issues of e-commerce in India are also required to be complied with e-ayurveda entrepreneurs in India. In fact, the online pharmacies websites of India are already under regulatory scanner of Indian government.

Ayurveda practitioners, clinics and companies are Internet intermediaries within the meaning of Information Technology Act, 2000 and they are also required to comply with cyber law due diligence requirements (PDF) in India.

Perry4Law recommends that it would be a good strategy to comply with techno legal requirements as are meant for e-ayurveda websites in India as instances of prosecution of e-commerce website owners for violation of India laws are in abundance in India.