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General Studies 2 >> Governance

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ONLINE SALE OF DRUGS

ONLINE SALE OF DRUGS

 

1. Context

In early February, the Ministry of Health pulled up at least twenty companies including Tata 1mg, Flipkart, Apollo, Pharm easy, Amazon, and Reliance Netmeds, by issuing them a show cause notice, for selling medicines online.
 
2. Pharmacy market in India
  • Unlike the US, where the top three pharmaceutical distributors have a 90 percent share in the market, India is a fragmented market with over 8 lakh pharmacies.
  • This gives online pharmacies an opportunity to capture their space without opposing large traditional retailers.
  • Currently, companies in the Indian e-pharmacy space mainly operate three business models-marketplace, inventory-led hybrid (offline/online), and franchise-led hybrid (offline/online) depending on the way the supply chain is structured.

3. Banning e­pharmacies a viable option?

  • The Ministry of Health has adopted a ‘blow hot blow cold’ approach towards online pharmacies.
  • The acute need for door step delivery of drugs was felt during COVID­19.
  • The year 2020 marked a watershed moment for the growth of e­pharmacies as the Ministry of Home Affairs issued orders for them to continue to operate.
  • It saw nearly 8.8 million households using home delivery services during the lockdown.

4. Draft e-pharmacy regulations

  • Draft rules for e-pharmacies sought to define the online sale of medicines, what an e-prescription means, and what type of licenses online firms would need to get from regulators to operate.
  • The draft had proposed to allow e-pharmacies to get a central license to operate from the country's apex drug regulator, which could be used to allow them to operate across the country.
  • It also proposed to define e-pharmacies in a way that would allow them to distribute, sell, and stock medicines.
  • The proposed regulations prevent them from selling habit-forming drugs like cough syrups specified in Schedule X of the Indian drug regulation.

5. E-­pharmacies competing with mom­and­pop chemist shops

  • E-pharmacies call themselves facilitators of doorstep delivery. They claim tie-ups with retail chemists for vending medicines. However, since profit margins in the drug retail industry are very thin, just about 15% to 16%, every player in the supply chain is struggling to make money.
  • Therefore, companies like PharmEasy, in a move to circumvent retail chemists are building a supply chain from the ground up buying out big and small wholesale drug distributors like Ascent Health, Desai pharma, and eastern agencies healthcare among others.

6. Online pharma is going on a scale

  • While Covid -19 and the subsequent behavioral shift towards e-commerce may have catalyzed growth for online pharmacies, the sector was already poised to grow seven-fold by 2023 to $2.7 billion.
  • This was mainly on account of the challenges faced by physical pharmacies that gave their online counterparts a problem to solve.
  • Experts believe that e-pharmacies will be able to solve the problems that traditional pharmacies couldn't.
  • But for this year, they need to have a large-scale presence that calls for either huge investments or consolidation.

7.  Way forward

  • The e-pharmacy sector holds immense potential to address the persisting issue of affordability and accessibility of medicines in India.
  • Steps should be taken to foster the e-pharmacy sector with sufficient safeguards and under stringent regulatory control to protect the interest of the consumers.
  • Specified and clear-cut rules should be made for selling, prescribing, dispensing, and delivering prescription drugs through e-pharmacies.
  • A stringent licensing mechanism should be adopted for e-pharmacies. Government should make a common logo for legally operating e-pharmacies to distinguish them from illegal ones. For example, The European Union (EU) has issued a common logo for legal operation e-pharmacies in the EU member states.

For Prelims & Mains

For Prelims: E-Pharmacies, Covid-19, Ministry of Home Affairs, Schedule X of the Indian drug regulation, European Union (EU), 
For Mains: 1. Critically analyze the status of E-Pharmacies in India and explain the Draft e-pharmacy regulation rules.
 
Source: The Hindu

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