It is widely acknowledged that the Indian retail pharmacy industry is, at best, widely fragmented throughout the country. If organized at all, shops tend to operate under a unified retail banner only regionally, with the vast number of shops being of the small, “mom-and-pop” variety. The market continues to grow with such sustainability, based on the ever increasing incidence of chronic disease that the industry continues to thrive, despite its apparent lack of organization and corporate discipline. These small shops managed to literally stumble their way into an estimated 2014 gross turnover of some 83,000 crore and predictions are, that the figure will continue to soar.
On the surface and on the international level, the industry is highly regulated. However, on a regional and local level, the market is yet to become more organised. As in most government regulated industries in India, cases of abuse far outnumber the regulators’ ability to enforce the law, and with literally hundreds of thousands of small shops to watch over and regulate, enforcement becomes a massive challenge, withering the forces of both manpower and money.
Buoyed by the amazing success achieved by consumer durables industry in the online space, Pharma is the next big sector in India to target consumer online. The growth in the industry has created great opportunity for the online model for this business. India has now seen pharma players taking the e-commerce route with an intention to offer a solution to a number of problems plaguing the retail pharmacy industry. Though online medicines look like a promising trend today, the business is challenged by regulatory issues. Paradoxically, despite the fact that many established stakeholders are warning about the dangers of online prescription drug sales, it just may be that pharmaceutical ecommerce may be more a “blessing than a curse” when it comes to satisfying the public need for quality medication. There are no dedicated online pharmacy laws in India as on date. It is believed that, properly regulated, the online pharmacy business could be of benefit to India.
Though online medicines look like a promising trend today, the business is challenged by regulatory issues. Earlier this year, Maharashtra Food and Drug Administration (FDA) investigated few e-commerce giants for selling prescription drugs without proper licence. It is becoming clearer that the growth of online pharmacy business depends on how much they will manage to fit themselves in the legal framework. It seems a certainty that it would be far more feasible for regulators and watchdogs to keep a sharp eye on a few licensed, major retailers than hundreds of thousands of small shops.
The Government has already planned to formulate a framework for online sales of medicines through e-commerce channels to define the role, responsibilities and liabilities of e-commerce marketplace and the product sellers. A nodal agency has been appointed by the DCGI for consolidating the guidelines and was to get views from industry bodies like Organisation of Pharmaceutical Producers of India, All India Chemists and Druggists Association, States Chemists and Druggists Associations, Indian Medical Association. Indian pharmaceuticals industry needs a new regulatory framework to effectively bring e-pharmacy under its ambit. The Drugs and Cosmetics Act does not have any guidelines for e-commerce players in pharmaceuticals sector. The government authority has also aiming to integrate e-pharmacy in the existing system.
The government’s stance so far has been to ensure that only licensed pharmacies sell prescriptions drugs, which is in line with the position taken by most regulators in the US, the UK and many Euro nations. The public has made clear that they want access to every commodity and consumable, from asparagus to zucchini, online and delivered to their home. This new paradigm in pharma retailing will require both a commitment to “getting it right” by the stakeholders and an eye on regulation. It is becoming clearer that the growth of online pharmacy business depends on how much they will manage to fit themselves in the legal framework. That’s the gap many of the new entrants are looking to fill in. If operated within the legal framework, online medicines or Internet pharmacy provides easy and convenient tool for the consumers. With so much traction visible in this space, the future seems to be bright for these new entrants in the e-commerce business.