Where is the patient in the e-pharmacy debate?

e-pharmacies cannot be considered a mere extension of the e-commerce boom, simply because the patient cannot tell the difference between counterfeit or sub-standard purchases. In extreme cases, it may even be too late

The tug of war between brick and mortar chemists and online pharmacies (or e-pharmacies), which has been on for at least the last three years in India, promises to heat up once again. Two high courts of the country, Madras followed by Delhi, have responded to petitions with bans on online sale of medicines. On December 20, the Madras High Court suspended its interim order banning online sale of medicines until the Union Government releases rules governing e-pharmacies.

While the Ministry of Health and Family Welfare released the draft rules for the operations of e-pharmacies in India on August 28, the Madras High Court still felt the need to prod the regulator, the Central Drugs Standards Control Organization (CDSCO), to notify rules for the online sale of medicines at the earliest and no later than January 31, 2019.

Larger e pharmacies like 1mg, NetMeds, and four other players petitioned the Madras High Court that its interim stay order should only apply to unauthorised companies. Thus seeking to differentiate themselves from the rest of the pack, by contending that they have their licences in place.

The truth is, does the ordinary consumer know how to check the antecedents of an e- pharmacy before she books an order? In this case, the consumer is either a relative of a patient or a patient herself. Most often, the purchase is done in a hurry and under stress. Thus the empowerment of having a choice, which is touted as a advantage by e-pharmacies, rings somewhat hollow if it is not ‘informed’ in the true sense of the word.

Most e-pharmacies have attracted successive rounds of funding to fuel their growth, and are thus  now in a position to splurge on branding campaigns across broadcast and print. To further this frenzy, the pro-online pharmacy stance of the CDSCO has encouraged them to believe that it is only a matter of time before the regulations will be notified. And hence, the dash to the finish line to grab the mind space of the consumer, hoping that it will convert, in time, into market share.

But objections from traditional chemist store associations like the Tamil Nadu Chemists’ and Druggists Association (TNCDA) and the umbrella association, the All India Organization of Chemists and Druggists (AIOCD) should also be seriously considered. While self-regulation looks good on paper, will everyone follow it? It is an open secret that even where we have strong regulation in place, we falter on the implementation and monitoring of these policies. Between knee jerk reactions like bans and policy diktats, it is the patient who is left high and dry in the e-pharmacy debate.

Also, e-pharmacies have not been able to garner more than one per cent share of the pharma distribution business. Which means that there is enough room for all kinds of models – offline, online as well as hybrid models – in India. The customer will ultimately vote with her wallet and discounts will not work beyond a certain point. Moreover, India is not a homogeneous market and what works in urban or Tier 2 cities might not work or be viable in smaller towns, especially rural India.

With so many grey areas, we need more debate and discussion on this issue. What’s clear is that e-pharmacies cannot be considered a mere extension of the e-commerce boom, simply because the patient cannot tell the difference between counterfeit or sub-standard purchases. In extreme cases, it may even be too late. Let’s hope that 2019 sees all stakeholders, especially the patient community, working towards a more nuanced solution.

Some cheer for the sector comes from a recent report based on a CRISIL webinar. The report expects the Indian pharma sector’s revenue to rebound to 11-12 per cent over fiscal years 2018-2020 , from 3.5 per cent in fiscal 2016-18. However,  this growth needs a commitment to look beyond generics. Biologics will be the next buzz word, with about $65 billion worth of biologic patents expected to expire in the US over the next five years.

As 50 per cent revenues come from exports, the report predicts that companies will focus on acquisitions to establish footholds in targetted export markets, especially the US. This was a clear trend in 2018, with seven acquisitions, clocking a total deal value crossing $2 billion till September 2018, all of which were geared towards this goal.  Will companies succeed in turning these predictions into facts?