E-pharmacies: Advantages, Models, Regulation and Recent Issues

The growth of e-commerce platforms has introduced the concept of E-pharmacies in India. Though e-pharmacy concept is more prevalent in developed countries, it is new to India and like any other disruptions, has faced controversy. It is facing opposition from All India Organisation of Chemists and Druggists (AIOCD), which has the support of over eight lakh pharmacies. Recently, they went on a one-day strike to highlight the threat they face from e-pharmacies, and the cost that will be incurred by them by adopting new regulations on the sale of medicines. They are also concerned about their falling profit margins and market share with the advent of e-pharmacies. As of now, we can understand the basis in the light of below questions:

What are key advantages and different models of E-Pharmacies?

The key advantages of E-pharmacies are as follows:

• They offer medicines at cheaper prices than compared to traditional brick and mortar model, mainly because of low expenditure.
• They have improved the accessibility of drugs to wider sections of population. Regulation of e-pharmacies is expected to result in improving the patient’s access to quality medicines at their door step.
• The digital tracking of medicines, if adopted, will help in reducing the problems of counterfeit medicines. Moreover, the digitally recorded purchased medicines history can prevent the problem of drug-abuse and self-medication also. The data analysis of the stored information can be used to form public health policies.
• Online pharmacies can provide the required necessary information such as drug iterations, side effects, reminders about medicine taking time etc.
• Online platforms can help in aggregating the supplies and help the consumers by doing away with enquiries in the market for a particular medicine.
• The e-pharmacy model will reduce the working capital requirements and a network of pharmacies can integrate in to a single platform to enlarge their customer base and consolidate the inventory available.
• The record of transactions can help the revenue authorities to arrive at the tax to be paid.

As far as models are concerned, there are three broad models of E-pharmacies in the market viz. organized, non-organized and illegal.

Organised e-pharmacies

Under this model, a licensed company will offer service from its own online platform or will partner with a technology firm to provide the service. Drugs are not sold without a valid prescription to prevent drug abuse.

Non- organised e-pharmacies

The non-organised e-pharmacies sell medicines without a valid prescription. And also there is no record keeping mechanism.

Illegal international trade via e-pharmacies

Under this model, medicines are exported illegally without any valid prescription and sanction of concerned authorities. Mainly low cost generic medicines are exported to developed countries.

What is the demand of AIOCD? Why they place such demands?

AIOCD wants the government to reconsider its decision to regularize sale of medicines online. They want to stop this regularization and ban sale of all medicines and drugs online. They are also against the e-portal mandated by the government. As per GST regulations, it is proposed to set up an online platform for regulating the sale of quality drugs. The Ministry of Health and Family Welfare has proposed to set up an e-portal to track and regulate the sale of drugs across the retail chain in order to prevent the sale of fake and substandard drugs. The AIOCD is against this idea as smaller pharmacies lack the necessary infrastructure to meet the stringent demands of the Ministry

They also want the government to take into consideration their views on the amendment of Central drug act, under which the government has mandated the presence of pharmacies in all stores.

The AIOCD has accused e-pharmacies for adopting a wide range of malpractices such as selling fake drugs and enabling self-medication.

The pharmacists are essentially clinging on to Drugs and Cosmetics Act, 1940, concerning the sale of drugs and medicines in India. The 1940 Act mandates proper prescription by doctors. According to the AIOCD, the online pharmacies are selling drugs without prescription and thus endangering the lives of the people. They argue that the online pharmacies are encouraging the rampant use of illegal drugs by nation’s youth leading to irrational use of medicines and drug addiction. Presently, it has been observed that the online pharmacies are selling anti-depressants, cough syrups etc. without confirming the authenticity of prescriptions.

Selling prescription drugs on the Internet is banned in India. The Drugs and Cosmetics Act, 1940, Drugs and Cosmetics Rules, 1945, and Drugs and Magic Remedies (Objectionable Advertisements) Act, 1954 mandate that scheduled drugs can be sold only on prescription. Even in case of e-prescription, the AIOCD argues that verification of doctors could not be foolproof as medical licenses could easily be forged.

What are the criticisms regarding the demands of AIOCD?

It was alleged that sole aim of the AIOCD’s demands is to protect the business interests of traditional brick-and-mortar pharmacies even if it comes at the cost of the consumer’s interest.

What are the actions taken by the government?

Ministry of Health and Family Welfare has proposed the setting up of an e-portal to prevent the sale of fake and substandard drugs. The Ministry has proposed to bring both traditional and e-pharmacies under the ambit of the e-portal.

However, the Ministry’s plan regulating e-pharmacies mandate setting up of a “licensed brick and mortar facility” as part of the operations to comply with the new regulations. Rather than a regulation, this step constitutes an indirect way of delegitimising the business model of e-pharmacies.

Way forward

The government should go ahead with their plans to regularize and monitor the sale of drugs online. But it should address all the legitimate concerns and loopholes. Legally, the Drugs and Cosmetics Act has lot of loopholes and it also lacks a clearer definition of OTC (over-the-counter) drugs to make e-commerce of drugs a safer and viable option. Learning from the success of the American online pharmaceutical companies, the government should put in place appropriate laws to control and regulate e-pharmacies.