Of late, online pharmacy brand PharmEasy acquired majority stake in diagnosis firm Thyrocare. This was the second big acquisition after Medlife by PharmEasy within a month. Online giant Amazon began doorstep delivery of drugs. Indian conglomerates Tata and Reliance acquired controlling stakes in home-grown startups 1mg and Netmed, respectively.
These transactions took place despite the ongoing COVID-19 pandemic and nation-wide lockdown. This reflects a strong faith among the investors about the prospect of a shining future of Indian online pharmacies. Inflow of capital in such big amounts from leading enterprises will boost the confidence among the investors.
So, what is motivating the investors or what is fuelling the growth prospects of this sector?
The most important driving force behind this is the nature of the product. Unlike other items, we do not choose medicines from a homogeneous group of products. Consumers do not evaluate the different features of the product, or want to touch and feel it before purchase.
As compared to any other product brand, people tend to have higher trust with a medicine brand as it is prescribed by a registered doctor. So, the issue of repeated consumption of a brand or buying it from earlier experience does not hold true in this sector. These help the consumer to purchase medicines online without hesitation.
The pharmaceutical industry is an organised sector. All the manufacturers and sellers are formally registered. The laws regulating the players in this industry are much stringent. This, at least, reduces, if not dismisses the possibility of purchasing dubious drugs. Online pharmacies enabled with highly-advanced technolog are much more equipped to follow a stringent tracking mechanism to eliminate middlemen and the risk of consuming counterfeit and sub- standard drugs. Modern technology like AI has also made it possible to remind the patients to fill up their regular stock and offer different promotional benefits.
Like other online stores, e-pharmacies also offer huge discounts. In terms of percentage, it may not allure one, but when one buys high-value medicines for chronic and lifestyle diseases like cancer, diabetes, etc. for regular use for a longer period, the amount sums up to be a significant value.
Unfortunately, this sector is blessed with a growing lifestyle and chronic diseases. Chronic diseases are rapidly rising in India. The World Health Organization reports that more than 20 per cent of Indians are infected by at least one chronic disease like cancer, heart ailments, respiratory diseases, diabetes, etc. This unleashes a huge business opportunity for online medicine sellers.
The growth factors for e-pharmacies
The growth of e-pharmacies has also been facilitated by the emergence of online medical consultancy service providers. Along with a lot of start-up firms, established hospitals have also started offering online doctor consultations. People are increasingly availing these services, especially to consult dermatologists and sexologists, obstetricians, etc. Many doctors are mandatorily offering their initial advice through online mode before attending the patient in person. Leveraging their experience and established position, big hospitals are offering to deliver medicine along with medical consultation. Sensing a business opportunity, traditional pharmacies are simultaneously practising both models.
The growing income and rising education have helped a larger section of the population to understand the importance of hygiene and taking healthcare seriously. A growing number of hospitals and clinics have increased the availability of doctors while leading to frequent health consultations. Access to health insurance has further broadened the scope. All these have considerably increased the sale of medicines.
More than half of Indians are now connected to a mobile phone and internet connection. Government initiative like Digital India scheme has given access to a large number of citizens to mobile and internet. Cheap mobile data has further increased the affordability of
online transactions. Large pools of technically-literate citizens are potential consumers in a digital economy.
Overcoming the challenges
Along with prospects, the online pharmaceutical sector brings its own set of challenges. The e-pharmacy business is still largely unregulated, creating scopes for fraud and generating distrusts, among many. Instead of a single clear policy, a series of laws are regulating the e-pharmacies in India. The requirement to accept orders only from the area where the pharmacy holds the retail licence, selling medicines only to the people residing in India, maintaining customer records and selling of prescribed medicines only, etc. makes not so much sense. It is also discriminatory as these are not followed by traditional pharmacies.
The online pharmacy can never replace a traditional pharmacy in supplying emergency medicine. A large number of pharmacies in each corner of the country make it easier and less time consuming for one to visit a local pharmacy during an urgent need. Moreover, one will hardly order medicines online when his loved ones are hospitalised and require medicine.
Considering the importance of the sector, there is a pressing need to bring regulation. The sale of drugs online should be regularised and monitored as the health of people is involved. The government should immediately address the ambiguities and disparities in policy space. The business interest of both traditional and e-pharmacies should be protected creating a level-playing field.