Express Pharma
Home  »  Latest Updates  »  E-pharmacies – what lies ahead?

E-pharmacies – what lies ahead?

0 202
Read Article

Dr Vikram A Munshi, Founder, WhiteSpace, Consulting and Capability Building discusses how e-pharmacies are faring in current times, their growth potential, and what their future beholds

A pharmacy, or an online pharmacy, is one that basically takes an order of medicines over the Internet and then delivers medicine to a patient through mail or dedicated delivery companies. From the first pioneering steps in 2015, the e-pharmacy industry has crossed Rs 3500 Cr in 2018 and is estimated to touch Rs 25000 Cr in 2022 as per a Frost and Sullivan Report.

This rapid growth of the pharmacy business speaks of a gap that exists in the market. For four years, the e-pharmacies have operated in a grey area while the government is yet to formulate concrete regulations for them.

In September 2018, the All India Organisation of Chemists and Druggists (AIOCD), who represent the 8 lakh plus brick and mortar retail chemists, observed a day-long strike. It triggered the Indian Government to issue a set of draft rules for the working of e-pharmacies in India, stating that no person will distribute, sell, stock, exhibit or offer for sale of drugs through an e-pharmacy unless registered.

These draft rules ended the debate against e-pharmacies then. But even after a year, there has been no update on these rules by the Government.

In a November 2019 order, the drugs controller general of India (DCGI) directed all states and union territories to prohibit the sale of medicines through unlicensed online platforms till the draft rules for regulating e-pharmacies are put in place.

There are two challenges that the e-pharmacies need to navigate. One is the regulatory challenge and the other being the challenge in providing a meaningful value proposition to the population segment it aims to serve.

Regulatory Challenge: In India, pharmacy law broadly states that medicines should be sold only through a valid prescription and dispensed through a registered pharmacist. However, a patient can purchase medicines without a prescription from a retail chemist. Even if the purchase is made with a prescription there is no record maintained of the prescription at the chemist end. Moreover, while the pharmacy may have a registered pharmacist on paper, the person manning the counter and dispensing medicines is rarely the registered pharmacist. The e-pharmacy scores over the retail chemist in these two critical areas.

The prescriptions have to be loaded on the portal. After the loading of the prescription, they are verified by a registered pharmacist and then finally the medicine is dispensed and mailed to the patient along with the full invoice of batch number and expiry date. This also helps to safeguard against the patient receiving counterfeit or spurious drugs. This meticulous record-keeping of prescriptions and invoices is also an insurance for the e-pharmacy in case of any consequences of claims of incorrect medicines dispensed. Thus, while the AIOCD is crying itself hoarse protesting against the e-pharmacies, it may find itself in a spot if the government inspects the adherence to pharmacy laws across the 8 lakh plus the brick and mortar retail chemists pan India.

Value Proposition Challenge: What is this gap which the e-pharmacies are filling? Every online business in the e-commerce space is built on the philosophy of ‘traction before transaction’. This means that profits are sacrificed to ensure customers switch to these companies. For the cost-conscious Indian customer, discounting is the easiest lure. The e-pharmacies, especially the bigger ones are heavily funded and hence the value proposition offered by most of them is more focused on savings on medicine cost, ranging from 10 to 25 per cent. Most of the communication in the advertisements focuses on savings. The funding behind the e-pharmacies makes this discounting easy to bear. This discounting changed the perception for the Indian customers that even medicines could be available on discounts.

The dual convenience of discounts and home delivery is now offered by many of the neighbourhood retail chemists. Some retail pharmacy chains offer loyalty programs rather than discounting but in the end, they are delivering the dual advantages of cost savings and the convenience of home delivery.

In addition to this, the neighbourhood retail chemist offers two more advantages that the pharmacy cannot – one personal touch, experience and immediate delivery. The ‘friendly’ neighbourhood chemist interacts with the customer personally and is known to respond to home delivery on an immediate need within the neighbourhood. The best of e-pharmacies may have a highly user-friendly technological interface but are unable to deliver medicines on the same day. Hence, they get more suitable for chronic care medications which are long term whereas they cannot make the urgent requirement for say a pain killer or a prescribed antibiotic.

Keeping in mind the above scenario, I believe that e-pharmacies need to explore other hidden needs rather than just price discounting. The need may be to get reliable medicines for a loved one from long distance, or ensuring the patient is never out of dose for the regular medication. Moreover, e-pharmacies can offer other related value-added services like customised diagnostics, counselling services, etc. to that patient apart from the medicines to impact the outcome.

E-pharmacies are here to stay. While we await a set of formal regulations governing them, they will exist side by side with the retail chemist, each fulfilling specific needs of different patient segments.

Leave A Reply

Your email address will not be published.