Online Pharmacy in India
Recently, India has seen famous mergers and acquisitions in the online pharmacy business.
How is the pharmacy market in India currently shaped?
- Unlike the US, where the top three pharmaceutical distributors have a 90 per cent share in the market, India’s is a fragmented market with over 8 lakh pharmacies — this gives online pharmacies an opportunity to capture their space without opposing large traditional retailers.
- Currently, companies in the Indian e-pharmacy space mainly operate three business models — marketplace, inventory-led hybrid (offline/online) and franchise-led hybrid (offline/online) — depending on the way the supply chain is structured.
- In addition to companies like Netmeds, Medlife and PharmEasy, other players in the segment include online healthcare startups such as 1mg, Practo, Myra as well as traditional chemists such as Apollo Pharmacy.
What are the rules governing the pharmacy sector?
- The government had floated draft regulations for e-pharmacies but these guidelines never saw light of the day.
- While the lack of proper rules governing the online pharmacy space has kept large investments at bay, it has allowed the existing players in the market to grow and overcome the challenges faced by traditional retailers, which account for almost 85% of the country’s total pharmaceutical sales.
- For pharmacies overall, India’s drug regulations require retailers to get a licence to dispense medicines from the state in which they are being sold. This may have been a factor in Amazon currently restricting its pharmacy sales to Bengaluru for the time being.
What do the draft e-pharmacy regulations propose?
- Considering that e-pharmacies currently are not regulated, their operations are constantly met with opposition from brick and mortar chemists.
- In the absence of clear regulations, online pharmacies currently operate as marketplaces and cater to patients as a platform for ordering medicines from sellers that adhere to the Drugs and Cosmetics Act and Rules of India. Other regulations, like the Information Technology Act and the Narcotic Drugs and Psychotropic Substances Act, also apply.
- Draft rules for e-pharmacies sought to define the online sale of medicines, what an e-prescription means and what type of licences online firms would need to get from regulators to operate.
- The draft had proposed to allow e-pharmacies to get a central licence to operate from the country’s apex drug regulator, which could be used to allow it to operate across the country.
- It also proposed to define e-pharmacies in a way that would allow them to distribute, sell and stock medicines.
- The proposed regulations prevent them from selling habit-forming drugs like cough syrups specified in Schedule X of the Indian drug regulations.