budget 2020

Will e-pharmacy flourish in India?

With a high shout out for making India, digital, healthcare leaving no stone unturned has also step into online pharmacies.  A significantly growing sector, online pharmacy is an Internet-based vendor of prescription drugs, and the term encompasses both legitimate and illegitimate pharmacies.

An online pharmacy sounds convenient; no waiting in queues, no rushing to the pharmacy before it shuts shop for the day, easy placing order, moreover, the order can be placed any time of the day and the medicines are conveniently delivered via courier at your doorstep.e-pharmacy

However, when it is said that technology can help in meeting the objective of healthcare in India, online pharmacies are recently facing a hard time from the government. It is also said, that e-pharmacies have been increasing in India, with the rise attributed to little regulation of the industry.  And the question again arises, where there is a successful and functional shopping portal like Flipkart,Amazon and Snapdeal why not its equivalent for medicine portal in India? What is holding back India from running numerous online pharmacies? Answer is very simple and obvious.

Authenticity of Drugs

When it comes to shop for shoes, garments, appliances, etc, people are very skeptical knowing what it is, how much it guarantees, what brand it is and is the cost genuine. These are few but serious concerns of people while shopping general needs. Hence, when it comes to medicines, people are even more serious and skeptical to buy them online.

Due to lack of awareness, people believe that medicines bought from physical chemists are original and what online pharmacy does is scam, owing to what happened recently with SnapDeal. So, in India, if medicines are to be sold online, it is hard, but not impossible to convince people with Authenticity of Drugs. It takes time.

Green Zone:

According to Drugs and Cosmetic Act, 1940, and the Drugs and Cosmetics Rules, 1945, the Schedule H and Schedule X drugs can be sold only on valid prescription. Also, there are specific rules of labeling and bar coding. A company has to comply with government rules and regulations to get success with online pharmacy. Furthermore, there are multiple other laws in India that govern food, health, cosmetics, drugs, medicines, and nutraceuticals in India. Online sale and purchase of Rx drugs are utterly supervise by these and other laws.

Following items are allowed as per Indian Laws:

  • Medicines can be sold only by a registered pharmacy that has retail license. The pharmacy should have a registered pharmacist on payroll.
  • It is mandatory for the customer to have a prescription for the medicines he/she is ordering. Over the Counter products can be sold without prescription.
  • Orders can be taken from the customer either over the phone or internet only from the areas where the pharmacy retail license applies. For example, if the pharmacy has license is issued by Telangana State Government, orders can be taken over phone or internet only in Telangana State.
  • All the medicines that go out for delivery has to be verified and certified by the registered pharmacist.

Many Online pharmacies in India are inviting legal risks by not obeying the applicable laws. Due to which, the conviction of people that all the medicines that are sold online are fake becomes more firm.


Loop holes

All laws have been well established and any online pharmacy must comply with all the rules and regulations, however, there are many loopholes that these pharmacies are utilizing for their profit and illegal drugs have been on the rise. Because of its vastness, medical laws cannot be all encompassing hence causing circulation of illegal drugs and pharmaceuticals.

Online pharmacies laws in India are still in nascent stage and there are no dedicated online pharmacy laws in India. The Information Technology Act 2000 governs some of the legal issues pertaining to online dealings but it is silent on the aspect of online pharmacy. As a result, illegal online pharmacies have been increasing in India. If properly regulated, Online pharmacies in India could prove beneficial to various stakeholders

There are few primary factors that have inhibited the growth in this sector:

1. Regulation & its understanding: The Drug & Cosmetics Act is from the 1940’s. No surprise that the online model was never contemplated. However, what this means is that the ePharmacy is also under the purview of the existing Act. As per the Drugs and Cosmetics Act, there is no concept of digital prescriptions. While as per the recent IT act, digital documents have full legal sanctity and this Act takes precedence over all other acts where digital documents are in question, the fact is that the bible for drug controllers (Drugs and Cosmetics Act) is enforced by inspectors who do not always understand/ recognize the provisions of the IT Act. Additionally given that the regulation is a Central as well as a State license subject under a very entrenched system of inspectors and controllers, it is common to see different interpretations and views taken in different neighborhoods. A consistent and clear interpretation of the rules, or rather a clear explanation of the law to all officials is required.

2. Different standards for online vs offline: Everyone knows how pharmacies operate in India. Most do not have a pharmacist on premises, they generally do not ask for prescription, dispense without bill and substitute medicines openly. However, an organized player should and is expected to adhere to all key provisions of the letter of the law (simply because the size of the organized player makes it more visible both to the law makers and also to the fragmented market).  In such cases, if the offline context was equally enforced, then transactions would move online at a much faster pace.

3. Lack of Technology: This industry is a bit like agriculture: very small operations that are unable to leverage the economies that come with technology (like tractors in small fields), since technology used to be expensive in the past. This is critical for this industry to grow. Most pharmacies do not have basic inventory management systems, do not have online presence etc. and as a result are ill-suited to scale or support an at scale player.

4. Vested Interests/ Lobby groups: This industry is heavily unionized and the industry association of pharmacies actively opposes any new models. This group blocks new entrants into the ecosystem, stifles price competition and actively dissuades pharmacies from working with ePharmacies. The small vendors do get scared making it a challenge to find partners). If this were a free market, all good pharmacies who want to grow their business would love to work with any scale player (or scale their own business).

5. Structural opacity for the consumer: Unlike a few other sectors, when it comes to healthcare, a consumer is not used to choice in this sector. Too many middlemen, too much opacity and very little reliable information make the consumer a follower, and he/she does not demand quality in the same way as one would for food or entertainment or any other sector. Hence not much has happened to drive innovation. This is changing – and at a heartrendingly rapid pace. As transparency and understanding evolves, people will demand service and the ecosystem will have to deliver

Recent Developments

Patients would be able to book online a bed in All India Institute of Medical Sciences (AIIMS) very soon. The King George’s Medical University (KGMU) of India is in the process of preparing an inventory of all generic medicines available across the country. Once the list is ready, it would be uploaded on the patient information management system and prescription would also be issued online and any medicine other than the one in the inventory will not be accepted by the system. India is also promoting the traditional medicines and practices of Ayurveda, yoga, naturopathy, Unani, Siddha and homeopathy. A telemedicine application has also been launched that connects patients in remote clinics with the doctors in tertiary hospitals via a video conference. The doctor then performs live face-to-face consultation for the patient by means of a video session. These developments show that online pharmacy related legal issues would also be taken up by Indian government very soon.



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