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Online Pharmacies Revolution In The Making?

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Online pharmacy is a concept that is still at a nascent stage in India, yet it seems to have a  huge potential for growth. Industry stakeholders share their views on the concept and its implications By Usha Sharma

In the last few years, E-commerce platform has picked up its pace globally as well as in India. However, online pharmacy concept in India is still at a very nascent stage because the Indian law does not permit it. According to the Pharmacy Act subsection 1 of section 42 of Indian Pharmacy Act 1948, “No person other than a registered pharmacist shall compound, prepare, mix, or dispense any medicine on the prescription of a medical practitioner.” Section 42 (2) also states, “Whoever contravenes the provisions of sub-section (1) shall be punishable with imprisonment for a term which may extend to six months, or with fine not exceeding Rs 1,000 or with both.”

Ashutosh Garg

Explaining the concept further, Ashutosh Garg, Chairman and Managing Director, Guardian Lifecare  says, “With the growing use of Internet-based shopping, we are seeing a huge increase in sales via the Internet. However, sales of medicines is not permitted since the law requires the sale to happen in a licensed store, sale to be effected by a pharmacist and sale to be effected based on a prescription. Some companies have already started to find loopholes in the law and have started to sell medicines over the Internet, recognising the need for Internet-based sales of medicines.” He suggests, “Government of India (GoI) needs to proactively legislate this to manage unscrupulous elements while ensuring that the new medium of sales is available to all customers.”

According to a PTI report, considering the possibilities of misuse by E-commerce vendors, the Maharashtra FDA took the lead in examining details of major online pharmacies such as Snapdeal, Flipkart and Amazon as well as issued showcause notices to them. A police case was also filed against Snapdeal by the Maharashtra FDA for selling prescribed drugs online. However, in the wake of information technology advancements and related smart phone-based applications, the importance of moving with the times and an in-depth assessment of online pharmacy practices was felt.

Realising the need for constituting guidelines for online pharmacies, Federation of Indian Chambers of Commerce and Industry (FICCI) recently organised a meet on ‘Pharma Guidelines for Reinforcing Due Diligence for Intermediaries (E-commerce Marketplace)’ to ensure safety of consumers. Dr GN Singh, Drugs Controller General (India) DCG(I) announced that the authority is in the process to formulate guidelines. He also informed that FICCI has been appointed as the nodal agency by the DCG(I) for consolidating the guidelines. A sub-committee has been formed by the DCG(I) under the chairmanship of Harshadeep Kamble, Commissioner Food and Drug’s Administration & Food Safety Commissioner, Maharashtra, to assess the feasibility of online pharmacies. The committee also includes other members like the Karnataka Drugs Controller along with drugs controllers of Delhi and Odisha. Eswara Reddy, Joint Drugs Controller, Central Drugs Standard Control Organisation, is also a member of the sub committee. It is seeking the views of Organisation of Pharmaceutical Producers of India (OPPI), All India Organisation of Chemists & Druggists, states chemists and druggists associations, Indian Medical Association, CIPI, BDMA, PHD Chamber of Commerce and Industry and consumer forums.

Dr KK Aggarwal

Highlighting the need for such guidelines, Dr KK Aggarwal, Secretary General, IMA points out, “There are no well-defined dedicated laws for online pharmacies. The laws applicable are Drug and Cosmetics Act 1940, Drugs and Cosmetic Rules 1945, Pharmacy Act 1948 and Indian Medical Act 1956. Laws related to E-commerce are defined under the Information Technology Act, 2000.”

Aggarwal further informs, “The Drugs and Cosmetics Act does not allow home delivery of drugs. The Drugs and Cosmetics Act, 1940, and the Drugs and Cosmetics Rules, 1945, have clear guidelines on the sale of Schedule H and Schedule X drugs, which are ‘restrictive drugs’ and can be sold only on the prescription of a registered medication practitioner. Schedule X drugs include narcotics and psychotropic substances. Chances of drug abuse and addiction are higher with the Schedule X category. Schedule X drugs require meticulous storage and dispensing records. The prescription has to be in duplicate, one copy of which is to be retained by the licensed pharmacist for two years.”

Market potential

According to FICCI’s spokesperson, “Presently, online pharmacy is at its nascent stage in India, but like other categories, it has the potential to be a very large industry segment. It is expected that the online pharmacy model could account for five to 15 per cent of the total pharma sales in India, largely by enhancing adherence and access to the medicines for a lot of the under-served population.”

Hemant Bhardwaj

Hemant Bhardwaj, Chief Executive Officer, Co-Founder and MD, PM Health and LifeCare draws attention to the benefits of the model and says, “The icing on the cake is the concept of ‘Marketplace’, which is fuelling big dreams among thousands of small retailers. Now their business is no more constrained by the carpet area of their shops. And, for a minute, if I ignore the massive discounts offered by E-retailers, this channel still has a lot to offer to the customers in terms of convenience. Currently, 35 million Indians prefer buying products and services online. This tribe is going to cross 100 million mark by 2016 and is expected to continue to grow with a rapid rate. A smart businessman will not let go of an opportunity to cater to this next generation of buyers, whether he is in the business of selling needles or medicines. Best part is that he can leverage this new promising channel without junking his existing business or clientèle.”

Bruce Schwack

The model has already found favour with many leading pharma players. Bruce Schwack, Director, Marketing, informs, “Online availability of prescription medication has been discussed in a big way lately. Online pharma space currently has well-heeled players like Apollo Pharmacy, 1.MG, formerly Healthkart Plus, PM Healthcare, touted by former Igate CEO Phaneesh Murthy, and few others., the first-to-market pan-India, fully licensed and compliant E-pharmacies, is a recent entrant in the space.”


There are many players who have already stepped into the business or are intending to offer medicines online. However, several challenges are associated with the E-commerce platform, Aggarwal expresses his concern and says, “Online pharmacies will promote drug abuse, drug misuse, self-medication etc. Any medication taken without the supervision of doctors may be dangerous and even potentially life-threatening. There is every chance that the prescriptions submitted via fax/email may be fake and it could be difficult to verify their authenticity.”

Schwack also points out the pitfalls in the concept and says, “Selling mobile phones and T-shirts online is less problematic than selling prescription drugs. After all, getting the wrong prescription could ruin your health.” He further informs, “That is why both the DCG(I) and the Indian Pharmacist Association are calling for the strictest enforcement of the Drugs and Cosmetic Act, and the top tier players in the emerging space are all in lockstep with this philosophy. It is of critical importance that the prescription laws be followed to the letter. And even more important is that patients see their doctors regularly and make sure that their prescribed medication is still required and is causing no harmful side effects. Hence it is important to have a valid, current prescription.”

Aggarwal also indicates, “Online pharmacies may provide rebates and commissions to doctors to provide prescriptions on the basis of online information that has been filled by the patient. This way doctors will be vulnerable to malpractice suits. Regulation 6.4 of MCI Code of Ethics prohibits from giving or receiving any rebates or commissions.”

Operating an online pharmacy too has several challenges associated with it. As Bhardwaj highlights, “Technology is on the cusp of changing the dynamics of how patients get their medicines. While cloud computing and electronic health records are changing the healthcare delivery paradigm, greatly benefiting the physicians and patients, likewise, E-commerce will change the accessibility paradigm for patients. A fresh perspective in our case is helping us as well.”

Garg shares his views on the measures that the government should consider, and says, “The government needs to ensure that only genuine medicines with proper expiry are dispatched by courier and pricing is done correctly. It should also ensure that medicines that need prescription are not sold online without a prescription.”

FICCI’s spokesperson opines, “The sale of drugs and medicines online might lead to drug and substance abuse, incorrect dosage or administration, counterfeit drugs, etc. However, with regulatory framework, the cases can be reduced. Also, generating awareness amongst the consumers could also help in overcoming these challenges.”

These are serious issues that need immediate attention, and the government should have provisions in the guidelines being drafted to tackle them effectively.

Will online pharmacies hit retail outlets?

Currently, online pharmacies are liable to violate various acts like Pharmacy Act, Drugs & Cosmetic Act and Violation of Human Rights. However, many E-commerce players have already ventured into the segment. Bhardwaj explains the phenomenon, “E-commerce or online retailing or M-commerce is still a very small fraction of the total retailing market in India. But it is making headlines because  customers and opinion leaders are seeing it as an efficient and effective channel of distribution of the future. It offers quick massive reach, if backed by strong logistics network. This is accompanied with the fact that it gives assured access to medicines in the quickest possible time to the needy.”

Dr Gopakumar G Nair

The growth of online pharmacies have also given rise to a fear among the retail sellers that their business would be adversely affected. However, Dr Gopakumar G Nair, Chief Executive Officer, Gopakumar Nair Associates, refutes this theory and opines,  “The fear of all these physical distributors and suppliers that E-tailing/ E-retailing such as Snapdeal, Flipkart, Amazon, Localbanya etc. will adversely affect the footfalls, has proved to be unfounded. As such, medical shops and pharmacies need not have fear for E-retailing which will only be additional and supplementary for enabling affordable access. Around 75-90 per cent of the current customers of medicine shops and pharmacies will continue to access physically. Only the web-enabled or web-assisted community who don’t have proximity medicine shops will opt for E-retailing on the web.”

However, Schwack tries to balance it out and says, “Although the ‘brick-and-mortar’ pharmacy operators in India are voicing some concern about this shifting paradigm, at least a part of that concern seems to be unfounded. While some of the opposition is based on a genuine concern for the public’s safety, since by and large the community of pharmacists is recognised as a group of dedicated healthcare professionals, another concern is probably the threat of a loss of business as their loyal customers migrate to the net or their smartphone to purchase their medications.”

He further elaborates, “In reality, industry analysts are predicting about a five to 10 per cent market share for the E-pharmacies as they emerge, jockey for position and settle in over the next few years. That means, that of the roughly 3,000,000 transactions that are going through local neighbourhood pharmacies and chemists each and every day, perhaps, as scant a number as 150,000 of those may be lost to ‘the web’, and in most cases, these pharmacies can actually enjoy an increase in business rather than a loss, by launching their own e-presence, extending their reach and appeal to their own customers and by enrolling in various “marketplace” engagements and providing fulfilment for some of the regional and national players.”

Though the mindset is changing and moving towards technology, the real challenge is how to strike a balance? Will providing certifications to chemist shops and online pharmacy be a solution?


According to the extraordinary gazette notification, “The supply of a drug specified in Schedule H1 shall be recorded in a separate register at the time of the supply giving the name and address of the prescriber, the name of the patient, the name of the drug and the quantity supplied and such records shall be maintained for three years and be open for inspection.”

FICCI spokesperson highlights the importance of certification and says, “We recommend a certification for online marketplace, so they register with the regulator and are certified as organised players within the purview of the regulator. Online companies should clearly display the certificate on their home page and consumers should be made aware to only buy from certified online pharmacies.”

Agreeing about the measures needed to ensure safety and compliance, Bhardwaj suggests, “I completely agree that medicines can’t be sold the same way someone sells books or vegetables. I am of the opinion that any retailing channel or a platform or a retail player, who keeps regulatory compliance at the heart of its operations and ensures safe delivery of medicines to the consumers, should be encouraged.”

Aggarwal again draws attention to the likelihood of malpractice by online pharmacies and says, “Many online pharmacies may be operating without the appropriate license. This increases the chances that drugs sold by such unlicensed pharmacies may be counterfeit, substandard, or adulterated and therefore risky to the patient. There are no checks in place to ensure that the drugs sold by online pharmacies are not spurious. Medicines have to be stored properly as recommended by the manufacturer. Exposure of medicines to high temperatures in storage or in transit could diminish their efficacy and are a potential health risk. There is no way to check the storage conditions of drugs sold by the online pharmacies.”

Giving a rundown on the way, online pharmacies are operated in the US, Schwack says, “Even in the US, which is known as one of the most restrictive and regulated prescription drug marketplaces in the world, licensed pharmacies are permitted to offer their products online and those pharmacies that have chosen to do so include retail giants like Walgreens and CVS, as well as hundreds of ‘mom-and-pop’ neighbourhood shops. As a result, they all have enjoyed an increase in business as a result. Licensing is very much like in India, where issuance is predicated upon initial and on-going physical inspections, a review of Certified Pharmacist’s credentials, as well as a inspection of practices and procedures.”

Way forward

Garg suggests, “Over a period of time, the government should create a secure app which will be used by doctors to prescribe medicines. Registered pharmacies can then deliver medicines on the basis of this app. This will ensure complete transparency. Though there will be an initial resistance, customer push will drive doctors and pharmacies to have this implemented.”

Schwack opines, “The public not only wants it, but in many cases, needs it. The population is ageing and with age comes greater dependence on health maintenance drugs. The incidence of chronic disease is on the rise as the emerging ‘technocrat’ class is setting new records not only in income levels, but also in areas of obesity, diabetes and heart disease. A regular supply of health maintenance drugs and supplies, affordably offered and conveniently delivered will prove to be an important weapon in the fight against the rise of chronic disease.”

Nair ponders, “Is it too much for me to look forward to seeing the E-dream of riding on ‘Digital India’ turn into a reality during my lifetime? I would eagerly wait to order at least my vitamin supplements through the E-way, even if it is the local speed-postman delivering it, with the government enabling the statutes to make the provisions legal and transparent, not prone to abuse.”

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