The registered medical practitioner is entitled to supply the drugs to his patients which have been prescribed by him but the same are with certain conditions of exemptions as mentioned in Item No. 5 of the Schedule K of the Drugs and Cosmetics Rules, 1945. However, the registered medical practitioner is not entitled to exploit his patients or keep an open shop or sell across the counter or engage in the import, manufacture, distribution or sale of drugs.

The import, manufacture, distribution and sale of drugs and cosmetics in India is being regulated by Drugs and Cosmetics Act, 1940 and Drugs and Cosmetics Rules, 1945. Chapter IV of the Drugs and Cosmetics Act, 1940 deals with the manufacture, sale and distribution of drugs and cosmetics thereby laying down certain conditions for the same.

According to Rule 123 of the Drugs and Cosmetics Rules, 1945, the drugs specified in Schedule K of the Rules, 1945 are exempted from the provisions of Chapter IV of the Act and the rules made thereunder to the extent and subject to the conditions specified in that Schedule.

According to Item No. 5 of the Schedule K of the Drugs and Cosmetics Rules, 1945, Drugs supplied by a registered medical practitioner to his own patient or any drug specified in Schedule C supplied by a registered medical practitioner at the request of another such practitioner if it is specially prepared with reference to the condition and for the use of an individual patient provided the registered medical practitioner is not (a) keeping an open shop or (b) selling across the counter or (c) engaged in the importation, manufacture, distribution or sale of drugs in the provision of Chapter IV of the Act and the rules thereunder.

However, there are certain conditions mentioned in Item No. 5 of the Schedule K of the Drugs and Cosmetics Rules, 1945 which need to be followed:

• The drugs shall be purchased only from a dealer or a manufacturer licensed under these rules and records of such purchases showing the names and quantities of such drugs together with their batch numbers and the names and addresses of the manufacturers shall be maintained. Such records shall be open to inspection by an Inspector appointed under the Act, who may, if necessary, make enquiries about purchases of the drugs and may also take samples for test.
• In the case of medicine containing a substance specified in Schedule G, H or X the following additional conditions shall be complied with:
• The medicine shall be labeled with the name and address of the registered medical practitioner by whom it is supplied.
• If the medicine is for external application, it shall be labeled with the words “For external use only” or if it is for internal use with the dose.
• The name of the medicine or ingredients of the preparation and the quantities thereof, the dose prescribed, the name of the patient and the date of supply and the name of the person who gave the prescription shall be entered at the time of supply in register to be maintained for the purpose.
• The entry in the register shall be given a number and that number shall be entered on the label of the container.
• The register and the prescription if any on which the medicines are issued shall be preserved for not less than 2 years from the date of the last entry in the register or the date of the prescription as the case may be.
• The drug will be stored under proper storage conditions as directed on the label.
• No drug shall be supplied or dispensed after the date of expiration of potency recorded on its container, label or wrapper or in violation of any statement or direction recorded on such container, label or wrapper.

Further, according to Clause 6.3 of the Indian Medical Council (Professional Conduct, Etiquette and Ethics) Regulations, 2002, a physician should not run an open shop for sale of medicine for dispensing prescriptions prescribed by doctors other than himself or for sale of medical or surgical appliances. It is not unethical for a physician to prescribe or supply drugs, remedies or appliances as long as there is no exploitation of the patient. Drugs prescribed by a physician or brought from the market for a patient should explicitly state the proprietary formulae as well as generic name of the drug.