The importance of technology and digital infrastructure to deliver services to consumers across the country has emerged during the COVID-19 pandemic. The boost of e-pharmacy is fulfilling the need of accessing medicines and health services to the corners of the country.
Rush of new entrants
Last week, Amazon launched an online pharmacy in Bengaluru called Amazon Pharmacy. It accepts orders for both over-the-counter and prescription-based medicines in Bangalore. An Amazon spokesperson had said that this is particularly relevant in present times as it will help customers meet their essential needs while staying safe at home.
*Over-the counter (OTC) drugs are medicines that are sold without a prescription.
To take on Amazon foraying into the e-pharmacy business, Reliance Industries’ subsidiary Reliance Retail has acquired a majority stake in online pharmacy Netmeds for ₹620 crore. Director of Reliance Retail Ventures Isha Ambani in the statement said that the addition of Netmeds enhances the company’s ability to provide quality and affordable healthcare products/services, and also broadens its digital commerce proposition to include most daily essential needs of consumers.
Flipkart may also be looking to join the race as a Times of India report stated that the Walmart-owned company is looking to enter the e-pharmacy business on the back of strong demand for online medicines delivery.
Unclear stance
The delay in notifying the e-pharmacy draft rules has continued to cause concerns as the sector does not have a concrete and clear regulatory framework in the country.
In November 2019, the Drugs Controller General of India (DGCI) directed states and Union Territories to prohibit online sale of medicines without a license till draft rules to regulate online pharmacies are finalized and put in place. As per to the proposed rules, only government-registered e-portals can sell medicines, and they must retain prescriptions and verify details of patients and doctors.
E-pharmacies that continued their operations after the order claimed that their business model has been covered by the Information Technology Act, 2020 under the concept of intermediaries, while their pharmacy retail operations are covered by the Drugs and Cosmetics Act. They claimed that they transact with customers via licensed offline pharmacies.
Online pharmacy players are urging the government to notify e-Pharmacy draft rules on a priority as a Group of Ministers (GoM) have been reviewing the draft rules but have not yet notified amid opposition from the offline medical stores that say easy availability of medicines could lead to their misuse.
In the spotlight
About 50 start-ups including the likes of MedLife, Netmeds, 1mg, PharmEasy have been selling online medicines in India with over 30,000 employees.
According to the Federation of Indian Chambers of Commerce & Industry (FICCI) report, there was approximately 2.5x growth (about 8.8 million) in households using e-Pharmacy services during the lockdown. It is estimated that ePharmacy in India will be able to tap approximately 70 million households by FY25, the report stated.
Another report by Frost & Sullivan says, the e-Pharmacy market in India is estimated to be around ₹3,500 crore ($512 million) in 2018 and is estimated to grow at a CAGR of 63% to reach ₹25,000 crore ($3,657 million) by 2022.
*CAGR: Compound annual growth rate determines the rate of return for investments over a period of time.
All eyes will now be on the release of the much-awaited draft rules on the online pharmacy business, given the shift in demand and rush by the new entrants tapping the industry.
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