Table of Contents
The News
- Recently, India’s online pharmacy market saw two significant merger and acquisition deals
- Reliance Retail picking up majority stake in Chennai-based e-pharmacy Netmeds.
- PharmEasy moving to merge with smaller rival Medlife.
- Also e-commerce giant Amazon’s has launched online drug delivery services.
e-Pharma Market in India
- India’s is a fragmented market with over 8 lakh pharmacies.
- These cater to about 85% of our population. They are Governed by Drugs and Cosmetics Act 1940 and Rules 1945.
- Issues of accessibility & affordability, gives online pharmacies a huge opportunity to capture their space.
- As per report of Frost & Sullivan, Indian e-pharmacy market is expected to reach $3.5 b.
e- Pharma Market in India
- Currently, companies in the Indian e-pharmacy space mainly operate three business models
- Marketplace
- Inventory-led hybrid (offline/online)
- Franchise-led hybrid (offline/online)
- There are many upcoming players like like Netmeds, Medlife and PharmEasy, 1mg, Practo, Myra ,Apollo Pharmacy etc which follow above models.
e-Pharmacy regulation
- The regulatory conundrum..!!
- Drugs and Cosmetics Act, 1940 (D&C Act),
- Drugs and Cosmetics Rules, 1945 (D&C Rule)
- Pharmacy Act, 1948
- Information Technology Act, 2000 (IT Act).
- Indian Medical Act, 1956 and Code of Ethics Regulations, 2002
- Narcotic Drug and Psychotropic Substances Act, 1985
- Drugs and Magic Remedies (Objectionable Advertisement) Act, 1954
e-Pharmacy regulation
- The government (MoHFW) had floated draft regulations for e-pharmacies 2018 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 through legal loopholes.
- 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.
Draft rules for Operation of e-Pharmacies
- The Ministry of Health and Family Welfare has introduced the draft to amend the Drugs and Cosmetics Rules,1945 (“Rules”).
- The draft rules make provisions for sale of drugs by e-pharmacy.
- “e-pharmacy” means the business of distribution or sale, stock, exhibit or offer for sale of drugs through the web portal or any other electronic mode;
- “e-pharmacy portal” means a web or electronic portal or any other electronic mode established and maintained by the e-pharmacy registration holder to conduct the business of e-pharmacy.
Draft rules for Operation of e-Pharmacies in India
- Registration and Customer Support.
- Disclosure of information generated through the e-pharmacy portal.
- Procedure for distribution of sale of drugs through e-Pharmacy.
- Periodic Inspection.
- Validity of registration and renewal.
- Prohibition of advertisement of drugs through e-pharmacy.
- Suspension or cancellation of registration.
The Predicament
- 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.
- In this uncertain regulatory environment, large investors have shied away from investing in e-pharmacy models in India.
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