Online pharmacies: A rocky road ahead?

Online pharmacies have been the cause of several heated debates and discussions over the past few years. Express Pharma too has tracked the happenings in this sphere from time to time and deliberated on the strategies for the way forward. This time round, we are training our focus on the draft guidelines for online pharmacies. Though it has been ready for over a year, there is no clarity on when e-Pharmacy Rules will get finalised. The recent ban by the Indian drug regulator on the online sale of medicines without licenses seems to indicate that there will be further delay in the final outcome. Express Pharma talks to industry stakeholders and their preparedness for it

Due to fewer entrants, innovation in this space will also be quite slower

From an online platform perspective, we want to reiterate the business model:

• Customer requests for products on an online platform
• The request is sent to an off line brick and mortar store
• The prescription is validated and verified by pharmacists and only then the order is accepted for fulfilment
• The pharmacy receives the order and fulfils the order (compliant to the drugs and cosmetics act)
• All pharmacies in our network are licensed by state FDA and are operating under the supervision of a licensed pharmacist

What do we expect
A level playing field for online platforms vs offline pharmacies: There cannot be different rules/compliances for different channels which if exist can lead to undue advantage to one channel and overburden of compliance to the other
Ease of doing business: We expect the government to create an environment which is easy for start-ups and entrepreneurs and also encourage innovation rather than burdening them with licensing and compliances. Digital platforms provide better visibility and transparency and hence would be a great benefit for regulators to have better control and view of the overall industry transactions
Increased usage of digital platforms: For increasing visibility, monitoring and control of regulators over each and every transaction within the healthcare ecosystem, digital platforms are a must. It is hence very important to push usage of technology across the sector in order to improve the current standards and help improve the standards of healthcare delivery for patients in the country
What is happening due to delay in finalising policy
Lack of investments: The pharma sector is expected to be $35 billion industry by 2023 as per some industry reports. Lack of clarity will always discourage entrepreneurs and investments won’t come in easily leading to slower improvement of the current infrastructure. More than 100 start-ups this year got funded in the fintech space while less than 25 startups got funded in the healthcare space (in-spite of fintech being much more complex in terms of execution and regulations)
Lack of innovation: Due to fewer entrants, innovation in this space will also be quite slower than in any other category. Healthcare needs more innovation in order to improve the current standards of patient experience and lead to better outcomes.

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Going digital is the only way forward for a robust economy and a healthy India

As my family has been in the pharmaceutical business for a century, and I come from a background in pharmacy and technology, I could see a clear opportunity in taking the delivery of medicines online. Several underserved parts of the country did not have access to proper healthcare and some villages in rural India didn’t even have a store to buy drugs and medicines. To that end, the e-pharma model is a perfect solution where essential health supplies can be bought with the click of a button.

When the draft rules were being developed, we worked actively with the government and had multiple levels of discussions and consultations with all the stakeholders. We have all been in agreement that the online pharmacy sector will primarily operate as an aggregator which serves as a marketplace, and we will be working with retail pharmacies to fulfil the orders.

It is important, therefore, to understand the spirit in which the rules have been circulated by the government. I would like to address the issue of licensing because there is a key difference between legalising a business and regulating business. The Chennai High Court divisional bench was clear that we could continue running the business in its present form, and any additional rules required to regulate us would be notified soon. That’s what the order had actually read. This delay has caused a gap in understanding the online pharmacy model.

Another impact of the delay is that some investors who may not have a detailed understanding of the rules and regulations express concern about investing into a sector where there is a grey area. However, all of us who have invested into, and operate in this space are very clear that we have always adhered to the existing laws of the land. As and when the laws require any change, we would definitely comply with all the new guidelines as well.

Our prayer to the government is that the sooner they go ahead and notify the rules, the more time we have to work towards improving the access to affordable medicines for each and every Indian. We sincerely hope that the delay in final clearance of the legal framework to regulate online pharmacies is a very short one, because going digital is the only way forward for a robust economy and a healthy India.

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The end goal must be to make quality and affordable medicines accessible to all

There has been a lot of speculation around the e-pharmacy related guidelines since a long time now and it is open to different interpretations. In recent years, e-pharmacies have been able to provide access to affordable medicines to people even in the remote areas. They are also ensuring efficacy, transparency and reliability in the deliver

y of medicines. Despite this, from a regulatory standpoint, the online sale of medicines continues to remain a grey area with a lot of mismatch and lack of clarity even among people within the industry.

The Indian government is already moving forward in this direction with a draft policy ready. Some of the guidelines issued are aimed at regulating as well as authenticating the e-pharma market. We need to catch-up to new age ways of selling. In this light, the need of the hour is a clear set of guidelines that will help the ecosystem grow more rapidly and in a manner that is compliant with the spirit and intent of law. The end goal must be to make quality and affordable medicines accessible to all. We believe that the right way for the industry to grow will be an omni channel approach – something we are doing. If the actual regulatory framework is implemented, we strongly believe that it would prove to be an enabler for companies like us.

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‘We expect emergence of hybrid model of online pharmacy’

E-pharmacies have been a regulatory hot button issue for over a year now. The recent office letter of the DCG(I) requiring all state drug controllers to enforce the order pronounced by the Delhi High Court in December 2018 seems to only be a continuation and reaffirmation of the current position taken i.e. online sale of medicines should not be done by pharmacies who are not licensed for the same. Additionally, the DCG(I) letter appears to be only a stop-gap measure until proposed legislation for online pharmacies comes in force. There has been some delay in regulating online pharmacies as most Indians continue to frequent brick-and-mortar pharmacies and are not familiar with buying medicines online. Though online pharmacies are seen as not a proper option to brick-and-mortar pharmacies, online pharmacies provide multiple benefits to consumers, especially to patients who are unable to buy medicines easily from brick-and-mortar stores due to various reasons.

Regulating online pharmacies is important as online pharmacies are important for providing easy accessibility of medicines especially in more remote areas and may be at affordable price. Once regulated, the rules can be tailored to ensure that online pharmacies only operate by obtaining a valid license and maintaining quality of medicine throughout the supply chain. The rules can also provide a mechanism to ensure total compliance.  Online pharmacies can also be required to maintain a copy of the prescription against which drugs were supplied. We expect emergence of hybrid model of online pharmacy and  traditional brick-and-mortar pharmacies operating in India. With proper rules and implementation and enforcement in place, pharmaceutical companies too can have online mechanism to sell their products.  The delay in regulating e-pharmacies is merely deferring the inevitable. Online pharmacies are here to stay and not regulating them only makes it harder for consumers to capitalise on the benefits.

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‘Funding should not be misused in creating a habit which is not sustainable’

Future is Omni channel. Customer definitely do not wish to stay one channel of meeting his need. He would definitely like to interact with pharmacy or any other vendor through multiple ways. It could be a physical visit or order via app or web or through a call or even on a chat. The real challenge which is existing today is that no one has really worked on these aspects in totality. Simply burning money or becoming anti for other format will not solve the problem. Infact if everyone together can focus on providing every channel to trade with customer, then everyone can make money. Discounting is not at all required when you can convenience. The focus of every format should be to compliment the other channel and move forward. Industry is moving through $50+ billion market opportunity then why to crib about any of the current issues. Rather focus on future and try to leverage to their favour.

Traditional formats will always have the advantage of knowing customer personally and will always be emotionally well connected. This piece will and can never be served by online pharmacy. Traditional pharmacy are closer to the proximity of customers and hence they will remain customers first choice when it comes to acute medicines. Online pharmacy has an advantage of record management better than traditional format and gives a complete track of transaction chain.

Unlike other business – this business is about customers health. Luring them with discounts which is not available (as margins) is not a great idea. This shows clear intention of eliminating traditional format. This does not in anyway adds value to the existing system.

Funding should not be misused in creating a habit which is not sustainable. The best possible solution is traditional format becomes marketplace players in this online system subject to government regulation in place. The traditional format then acts as hyper local.

Conclusion
In the cutting-edge technology era, both traditional as well as advanced format needs to be synced in such a manner that they compliment each other and deliver solubility solution to the masses. However, the delay of draft rule of online pharmacies seems disturbing the growth as well. Although, with the growing demands and balancing the supply aspects, stakeholders of the industry also need to put in well conceived plans in order to make a supply chain robust and effective. May be this could be the one concern aspect of the government for delay in announcing the final rule book for the online pharmacies! However, we will wait and watch what they have in the bag in 2020 for the industry.

u.sharma@expressindia.com