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Online pharmacies urge government to notify e-Pharmacy Draft Rules

The Indian e-pharmacy market has recorded approximately $700 million investments in during FY20

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Online pharmacies players have requested government authorities to notify the e-Pharmacy Draft Rules on a priority. They have expressed willingness to partner with the government to extend last-mile support to State, Central government initiatives. Presently, the market has over 50 e-pharmacy platforms providing services to nearly 22000 pin codes across the country and employing over 30,000 people.

“With an aim to harmonise existing laws/guidelines like IT Act, D&C Act and Rules etc., the ePharmacy Draft Rules will provide sector-specific e-commerce regulations. Therefore, a simple and clear regulatory path will help unleash the potential of technology for improving access to affordable and quality medicines. The delay in the notification of e-Pharmacy draft rules is causing confusion and anxiety for all the stakeholders involved in the digital health ecosystem,” informed Dr Varun Gupta, Vice President, 1mg and Convenor, Digital Health Platform.

Dharmil Sheth, Founder, Pharmeasy commented, “There are different interpretations by various local agencies on the business model, which creates issues on operating smoothly in the country. We are absolutely compliant but we want the government to put it in black and white and leave no point to debate on this space. Currently, being a marketplace, we are governed by the IT Act, but we want a common regulatory cover, which is a combination of IT Act and Drugs and Cosmetics Act. This is where we want the government to enable the same.”

Rising popularity 

The online pharmacy players state that as defined in the draft rule, e-pharmacies also works as a brick and mortar model. It enables existing pharmacies to start online operations and serve a broader set of customers, or a network of pharmacies integrating to one platform and accessing a broader customer base. The e-pharmacy model has the benefit of technology to streamline and make inventory planning, processes, and systems more efficient. And its benefits also got witnessed during the nationwide lockdown.

They also point out that the Union Home Ministry, vide order number 403/2020-D dated March 24, 2020, specifically mentioned that delivery of medicines through e-commerce is an essential service. In fact, 19 state governments declared ePharmacy as an essential service during COVID-19 lockdown.

Gupta informed, “The e-pharmacy sector through an active partnership with existing pharmacies, is firmly committed to support the government and help the nation in fighting COVID-19 pandemic. The industry is working 24×7 to ensure that people get essential medicines at home all across the country, and the reach of existing pharmacies are expanded. Importantly, the regular medicines required for ongoing treatment are also being delivered.”

Shirish Ghoge, Ex-Senior Director of Public policy and Government Affairs, Sanofi India said, “The COVID-19 pandemic has provided e-pharmacies with the much-needed impetus, showcasing the merits of their model leading to wide adoption, even beyond metro/ tier I cities. While e-pharmacies operated in India even prior to COVID–19, the lockdown allowed them to play a pivotal role by improving healthcare access. Despite the first mile challenge (disruption in supply chain upstream) and the issues related to manpower, e-pharmacies were able to spring back into action in a short period – making medicines available on time and addressing the concerns for patients (allowing some to continue their treatment e.g., diabetics, patients with cardiovascular disorders ).”

“Therefore, the success of these e-pharmacies was also rooted in the excellent collaboration across the value chain including endorsement by the government as an essential service. And going forward, we strongly believe that E-pharmacies are here to stay and COVID has cemented their presence. Adoption of technology enforced by COVID-19 is a big driver (e-consult to Rx fulfilment, all on the same portal). Currently, it is a fragmented market and post COVID-19, we will witness a lot of consolidation in this space (we are already witnessing early signs of it). And in the coming months, we will see few large players emerging out of this,” added Ghoge.

Yogesh Shukla, Director, Medlife said, “During the pandemic situation of COVID–19, the online pharmacies have emerged as a lifeline and ensured continuous supply of medicines and it is going to continue during the post-COVID-19 situation as well. Together, we aim to extend our services to each and every household without restricting it to metro cities.”

So, what’s leading to their growth?

Observers point out a multitude of factors and benefits such as:

Benefiting the ecosystem: The e-Pharmacy model has the benefit of technology in streamlining inventory management, processes, and works efficiently till the last mile.

Consumer convenience: The consumers would be able to order medicines in a convenient manner from their mobile or computer. This significantly helps patients who are already sick and not in a condition to go out to find a pharmacy.

Consumer access: Online platforms can aggregate supplies, making otherwise hard to find medicines available to consumers across the country. Offline pharmacies can only keep limited inventory, resulting in a consumer having to ask multiple stores to get his or her medicine.

Medicine authenticity: With full tracking systems and solid technology backend, counterfeit medicines can be traced back to the channel/ manufacturer/ supplier thereby making the market a lot more transparent and ensuring authenticity is strictly maintained.

Transaction records: e-Pharmacy players would have systematic records for all transactions, with full taxes paid on each transaction. A great benefit to the state considering the size of the market.

Data analytics: Online pharmacies can store and analyse large amounts of data on consumers across the nation which can be very useful for planning public health policies. Gupta said, “It could store and analyse large amounts of data on consumers across the nation, which would be very useful for planning public health policies.”

Shah, pointed out, “It will enable the retailers to start using digital platforms on a large scale and avoid any issues at the ground level. Every retailer in the country can seamlessly start getting connected with customers via technology and improve service levels.”

Partnering with the government: Gupta elaborated, “e-pharmacy technology is likely to become the government’s true partner in driving social health initiatives in the country in the coming years (including National Digital Health Mission, Ayushman Bharat, Jan Aushadhi Pariyojana, Amrit Pharmacies and rural digital health services via CSCs. And the pharmacy players must partner with Government for any recall of medicines based on batch number communicated by the appropriate authorities.”

Investors choice?

The Indian e-pharmacy market also seems to have emerged as the investor’s choice as it has recorded approximately $700 million investments in FY 20. According to an industry observer, investor sentiments are also positive towards the sector, spurred by the organic adoption of e-pharmacies during the COVID-19 period

Commenting on the industry outlook, Ghoge highlighted, “We are already witnessing interest from tech giants and large e-commerce players (such as Amazon) in this segment and some have even announced their entry. However, there is a dire need to address regulatory aspects and the government has to endorse this new segment in this ‘new world’. The clarity in guidelines will also bring in fair competition and transparency allowing more investment into the segment. However, while defining these guidelines, it will be crucial to ensure that there are similar concepts for e-commerce and e-pharmacies and not be more restrictive towards the latter.”

He also pointed out, “Given the importance of the e-pharmacy sector globally, several large investors have reached out in the past few days expressing concerns about the regulatory climate in India and have asked for clarifications based on media reports in past. Given the government’s solid track record in making India “Open for Business,” we believe this sector needs huge investments.”

However, there has been an ongoing war between offline pharmacies and online pharmacies. The former has time and again objected to the entry of online pharmacies in India. Recently, Amazon announced the launch of Amazon Pharmacy, AIOCD raised objections and wrote a letter to Jeff Bezos, Chief Executive Director of Amazon stating that its launch of the online pharmacy business in Bengaluru is illegal. The association has also approached the government seeking intervention.

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