The online pharmacy sector has seen many deals but the announcement of PharmEasy’s impending acquisition of diagnostics major Thyrocare on June 26 took many by surprise. However, the synergies between the two are undeniable and are in line with the general trend over the past year.
The PharmEasy-Thyrocare announcement comes on the heels of Tata Digital’s deal to acquire majority stakes in 1MG earlier in June. This consolidation in the e-pharmacy segment is bound to continue as the sector is still very fragmented. The same logic holds for the diagnostic segment.
The COVID-19 pandemic has only accelerated a trend that was already in the works. In August last year, interest in the e-pharmacy sector swelled, with big-ticket deals like Reliance Retail’s acquisition of NetMeds. Health tech startups MedLife and PharmEasy too announced merger plans in the same month, with the former selling operations to the latter, to reap the benefits of scale.
Even as biggies like Reliance Industries and the Tata Group bulk up against global peers like Amazon and Walmart for a slice of India’s online retail sector, e-pharmacy has proved to be an easy and logical entry into customers’ wallets. And mind space.
Consumers were forced to move to online purchase of almost everything, including medicines, during the COVID-19 lockdowns. They then also booked their diagnostic tests online and tried teleconsultation, all through the same apps. Most health-related purchases and decisions moved online since the pandemic struck and industry pundits are predicting that at least a major proportion of these consumers will continue online for some time.
E-pharmacies have come some ways from their initial days when they attracted a backlash from their offline peers. If the interest and subsequent investment of venture capital legitimised the e-pharmacy concept in India, the entry of corporate giants should continue the mainstreaming process. PharmEasy’s takeover of Thyrocare clearly shows that they are no longer part of the ‘upstart start ups’ brigade. E-pharmacies have proved their mettle and value during the COVID-19 pandemic, delivering medicines to harried patients, most times at decent discounts.
Which is why it is high time e-pharmacies get their own set of regulations. Still governed by the same rules as their offline counterparts, framed in the pre-internet era, there have been numerous examples of unscrupulous players who are exploiting the loopholes.
Though policymakers did take the first steps on this front, nothing has moved much since the Ministry of Health and Family Welfare’s draft amendment of the Drugs and Cosmetics Rules, 1945 of August 28, 2018. This is the first draft to introduce and define terms like ‘e-pharmacies’, while prescribing certain restrictions.
However, the draft Rules to amend the D&C Rules have not yet been notified and thus cannot be enforced. Ending the ambiguity will be good for patients, as well as the industry.