Over 12 lakh retail pharmacies across the country remained closed on May 20 in response to a national pharmacy bandh called by the All India Organisation of Chemists and Druggists (AIOCD) to protest against the unregulated growth of e-pharmacies and predatory pricing by large corporate entities. The rare act of nationwide bandh by the national pharma trade body points to the seriousness of the situation prevailing in the pharma trade in the country. It is a fact that the trade fraternity has long been knocking at the doors of the Central government to frame a separate set of rules for the e-pharmacies in the country as the unregulated growth of e-pharmacies has been affecting the livelihood of over 12 lakh traditional pharmacies across the country. As the D&C Act, which was enacted in1940 when there was no e-pharmacies, does not distinguish between conventional and online sale of drugs, utter confusion prevails in the pharmacy market in the country. As the country presently does not have a regulatory mechanism for online sale of drugs, the laws governing the brick-and-mortar pharmacy business are applicable to the e-pharmacies as well which has resulted in verbal duel between the offline and online pharmacy associations. Now, the digital platforms are doing their business using the two emergency notifications, GSR 220(E) and GSR 817(E), issued by the Union Health Ministry in March 2020 during the peak of Covid-19 pandemic. Originally introduced as a temporary measure to ensure uninterrupted medicine supply during the Covid-19 lockdown, it is still being used by the e-pharmacies to do their business as the government did not withdraw these notifications after the pandemic. The AIOCD argues that digital platforms are exploiting these relaxations to bypass mandatory safety protocols under Rule 65 of D&C Act, such as the physical verification and stamping of original prescriptions. It is also a fact the cut-throat competition among the e-pharmacy players has brought in its wake several unethical trade practices like predatory pricing and indiscriminate discounts. There are allegations that while the government licensed brick and mortar retailers are getting 16% margin on scheduled drug and 20% non-scheduled drugs, the e-pharmacies and corporate retail chains are offering 30 to 40% discounts by advertising, in contravention to the provisions of D&C Act and Rules.
Of course, the scope for e-commerce in the pharmaceutical sector is immense and if properly regulated, online pharmacies in India could prove beneficial to various stakeholders. According to a KPMG-FICCI report in 2022, the e-pharmacy market in India is expected to grow at an impressive CAGR of around 40-45% in future, backed by the growing internet penetration and digital payments and government support. It is not for nothing that a large number of big corporate entities have started entering the e-pharmacy and these big players are now vying with each other to get a substantial part of the e-pharmacy pie. It is apparent that from Amazon to Reliance, major players have entered the pharmacy race to scale up, consolidate and corner a share of the pharmacy market, which is expected to swell several-fold in times to come. However, there is an urgent need for framing exclusive laws as there are no dedicated online pharmacy laws in India. In the absence of regulatory guidelines, there is always a threat and possibility of supplying illegal or unethical medicines. The Indian Medical Association in a white paper issued in 2022 on online pharmacy, had also raised the same alarm that the e-pharmacies may encourage substitution of cheaper and spurious drugs and there is possibility of patients using one prescription repeatedly without the supervision of the doctor. As the situation is getting murkier, the government should handle the issue with the seriousness it deserves. |