The government recently released draft rules to regulate e-pharmacies and their activities. The industry lauds certain measures such as the ones to restrict data sharing and protect patient privacy, it also raises a few pertinent concerns such as no capping on discounts. Many also feel the need for more clarity to understand the implications and impact of the guidelines better
Curb on discounts will give a level playing field
The draft rule is a great move by government to regulate e-pharmacy. It will put some licensing and inspection mechanism in place. This rule now allows anyone to create an e-pharmacy and give additional convenience to general public. It will enable pharmacy business in a more ethical way. Currently, medicines are dispensed even without prescription but in this case, we need to have a complete track mechanism in place till it reaches the patient’s doorstep. E-pharmacy, being a tech product, will ensure that patients are reminded of their dosage timings.
But, a major part of the worry is that e-pharmacy is a capital intensive activity and therefore existing mom-n-pop stores cannot think of participating in this new wave. The rule does not even allow them to work with anyone like other trades which have the privilege of working with Flipkart and Amazon. This puts a question mark on mom-n-pop stores’ future. The ideal situation would have been allowing a marketplace which can be setup by area level retailers for their consumers.
Another important fact is burn in other, non-pharma businesses are ok because the retailer is part of demand creation and hence they can demand a better margin. The pharma supply chain, being just a demand fulfiller, has limited access to additional margins and hence it becomes very difficult for mom-n-pop stores to compete with these burn start-ups. There should have been some rule on discounts to protect the interest of the trade. Otherwise, in the name of survival, mom-n-pop stores will engage in trading sub-standard drugs which comes with higher margins and that’s bad for consumers. We faced a similar situation, when companies started luring doctors with freebies and they started writing medicines which were not required for patients. A curb on that has generated high benefits for the general public. Similarly, a curb on discounts by e-pharmacies will give mom-n-pop stores a level playing field.
We, C-square, as a tech provider invest huge time and money and work hard to give tech solutions to both, full fledged e-pharmacy companies and stand-alone retailers with complete back end solution. Full fledged companies have deep pockets to invest in complete tech stack but small retailers do not have the capital to invest in these large volumes. The only solution is a common platform for all players but the new rule doesn’t provide any room for the same. We currently have the capability to provide solutions to any type of e-pharmacy.
– Sripal Bachawat, Director, C-Square Info Solutions
‘Draft rules do not elaborate on last mile delivery and associated complications’
The draft rules are overall a positive move as now there will be some framework available specifically addressing this business model – what will or will not be allowed is a matter of regulation and will no doubt evolve from time to time. The model covered in the draft rules appears to be one that is more in the nature of a market place as opposed to an actual sales website as the dispensation has to eventually be done from a licensed premises – while the same company could have both a physical and virtual presence, but for scale it is bound to rely on more third party chemists and locations. What is worrisome is that the marketplace would be responsible for legal compliances of the eventual dispenser. One will need to see the final rules to gauge a better understanding.
The draft rules indicate that data from e-pharmacies is not to be shared with anyone except the Central Government for public health purposes. This eliminates possibilities of these companies monetising this data – and one also wonders how IMS or other agencies will gather pricing and sales data from the e-pharmacies.
The medicines have to be provided against prescriptions – this will definitely address self-medication on prescription drugs – but one wonders whether this will also affect OTC sales. The draft rules do not elaborate on last mile delivery and associated complications as that forms a core part of the overall business – that is an obvious miss – along with it arise things such as endorsing the prescription, etc.
– Sameer Sah, Associate Partner, Khaitan & Co
‘I would like to have more clarity’
It’s great to see that finally draft rules with regards to e-pharmacies. I appreciate the fact that regulators have ensured prescription adherence because any substitution by a retailer is highly risky as greed may come into play.
I also appreciate that it will be the central licensing authority that will grant the licenses to e-pharmacies. Assuming that given license will allow an e-pharmacy to operate on pan-India basis, will the license of e-pharmacy e suspended or cancelled because of non-compliance in one of the cities, will it impact its operation across the country? I would like to have more clarity on how things will work in a marketplace model, where e-pharmacies will have partnerships with local retailers for the supply of medicines. In a scenario where local retail partner defaults on compliance while fulfilling the e-pharmacy’s orders, will e-pharmacy too get penalised?
The draft takes serious note of delivery of medicines by e-pharmacies, especially for medicines which require cold chain. For such medicines, inter-city couriering should be strictly prohibited. Even within the city, these medicines should be delivered inpacks/ boxes so that they don’t lose their efficacy when they reach the customers. It should be mandatory for e-pharmacies to have a mechanism in place to ensure that the medicines are delivered only after verifying that the physical copy of the doctor’s prescription at the doorstep of the customer.
– Hemant Kumar Bhardwaj, Co-founder, MD & CEO, PM Health & Life Care (Zigy.com)
‘The most recent draft is fair and balanced’
We recently had an opportunity to review and digest the proposed amendments to Drug and Cosmetic Act of 1945 as prepared by the Drugs Technical Advisory Board (DTAB).
The new rules, known as the D&C A 2017, appear to be fair and balanced, as well they should be, having been drafted after much research and analysis and are based on inputs from industry experts from both the public and private sectors and seem well designed to accomplish the objectives. Stakeholders from all sides of the equation had an opportunity to voice their opinions about the many important issues addressed in this re-write of rules that had not been revisited in almost 90 years.
One of the over-arching goals was to fulfil the promise of PM Modi’s vision of a ‘digital India’ as it applies to healthcare, and its apparent that the most recent draft is fair, balanced and will help meet those goals.
One important aspect of the rules is 67K/M which addresses ‘data sharing’ and patient’s right to privacy, which becomes ever more important, as millions of prescriptions are collected and and large databases are amassed. Rules are only as good as the intent and ability of the stakeholders to follow them, and Netmeds has always been dedicated to the principle of absolute date security and privacy and it has demonstrated over the course of its three years in existence, that it strictly adheres to ‘zero tolerance’ of data disclosure, as it pertains to the personal details of its customers.
However, it must be noted that there is a difference between sharing “personal data” as it pertains to the individual’s medicine consumption, and ‘anonymous’ data exchange, as it pertains to usage, i.e., prescriptions written linked to batch numbers, etc. So we think that the language is appropriate and useful and protects the patients right to privacy, while still allowing for and important and useful exchange of data between, regulators, manufacturers and retailers.
In summation, we feel that everyone who had an opportunity to offer inputs, raise objections and otherwise participate in the draft process has been heard, understood and represented. We look forward to a final ratification and adoption of the new rules, and we are confident that they will give the new industry strong guidelines to follow, and that the end result will be better health outcomes for the citizens of India.
– Pradeep Dadha, Founder & CEO, Netmeds Marketplace