Monthly Archives: July 2014

FedEx Corporation Pleaded Not Guilty To U.S. Charges Of Delivering Prescribed Drugs From Illegal Internet Pharmacies

FedEx Corporation Pleaded Not Guilty To U.S. Charges Of Delivering Prescribed Drugs From Illegal Internet PharmaciesIllegal online pharmacies or Internet pharmacies have become a nuisance for not only e-commerce stakeholders but also to those providing ancillary services like transport, logistics and delivery services. If the volume of transactions or delivery is tremendous, it becomes really difficult ensure that the package for delivery does not contains any illegal or prohibited good or article.

This does not mean that the e-commerce portal or the delivery service provider should not follow the laws of various jurisdictions. In fact, due to conflicts of laws in cyberspace, this task has become a herculean task and almost all of the e-commerce portals and delivery service providers are at risk of violation of laws and regulations of various countries.

The latest to add to this list is FedEx Corporation that is facing a charge of delivering prescribed drugs from illegal Internet pharmacies. However, FedEx has pleaded not guilty to such charges that include delivery of pain pills, anti-anxiety drugs and other controlled substances for illegal Internet pharmacies. FedEx was indicted by a federal grand jury on July 17 on 15 counts of conspiracy to distribute controlled substances and misbranded drugs and drug trafficking. If convicted, FedEx may face a fine of twice the gains from the conduct, alleged to be at least $820 million for it and co-conspirators.

FedEx has contended that it cannot be held responsible for the contents of the 10 million packages it transports daily and that policing customers would violate their privacy. The case against FedEx will turn on “what were the duties” of the company regarding the pharmacies that were using it to ship drugs. This is a logical approach as well because if FedEx is engaging with apparently illegal online pharmacies, it can be held liable for violation of laws of various jurisdictions, including India.

For instance, laws for opening of online pharmacy store in India are not at all followed by almost all the online pharmacies of India. In fact, the Maharashtra FDA has already approached Drug Controller General of India (DCGI) for regulating illegal online pharmacies operating in India. FDA has also written to the DCGI to seek CBI intervention in the issue of what the FDA claims is smuggling of drugs to and fro from India through websites. It is also believed that many online pharmacies websites in India are controlled by underworld and organised criminal networks.

If FedEx deals with such illegal online pharmacies operating in India it cannot subsequently claim that it was not aware of the illegal drugs and pharmaceuticals delivered by it. When the business or initiative itself is illegal, how can FedEx claim a legal dealing with the same? Similar is the case of other service providers associated with such illegal online pharmacies. They are required to comply with e-commerce due diligence and cyber law due diligence (PDF) requirements of India to escape various civil and criminal liabilities.

We have widely scattered techno legal requirements to regulate online sale and purchase of prescribed drugs and medicines in India. For instance, the digital communication channels for drugs and healthcare products in India are well regulated. Similarly, sales of medicines in India through e-commerce websites are also regulated heavily. The Indian government has in the past also constituted a high-level committee to suggest regulatory and legislative measures to check online pharmacies trading in banned drugs in India. However, even after more than 2 years of this announcement, nothing has happened in this direction and illegal online pharmacies are operating in active violation of Indian laws.

Perry4Law strongly recommends that it is high time for the Indian government to enact a dedicated e-commerce law for India that can cover online pharmacies area as well. Similarly, online pharmacies operating illegally in India and those dealing with them in any manner whatsoever must also start complying with Indian laws and laws of other jurisdictions to escape various legal liabilities.