ETtech Explainer: Impact on e-pharmacies on govt's review of doorstep medicine delivery
India's top drug advisory panel – the Drug Technical Advisory Board (DTAB) – has formed a sub-committee to review a 2020 notification that allowed doorstep deliveries of medicines. This notification, which was issued during the Covid-19 pandemic, has become the latest bone of contention between offline pharmacists and digital drug delivery platforms.The All India Organisation of Chemists and Druggists ( AIOCD ), representing 1.24 million chemists and distributors, has been demanding the withdrawal of the doorstep delivery of medicines, alleging its misuse by digital platforms.The health ministry, in March 2020, had come out with a notification that any licenced chemist could make doorstep deliveries of medicines 'to meet the requirements of emergency arising due to pandemic Covid 19'. It also laid down certain conditions for doorstep drug deliveries, such as the availability of a prescription and the maintenance of records of such deliveries made. This move by the central government essentially allowed not only e-pharmacies but also offline chemists to make home deliveries of prescription drugs.The AIOCD has said that the notification is no longer relevant and should therefore be revoked, given that the emergency phase of the pandemic no longer exists. The chemists' body approached Union health minister J P Nadda earlier this year, flagging 'mounting concern regarding the continued misuse of this notification by various digital platforms". It also said that the practice of dispensing medicines without validated prescriptions prioritised profits over patient welfare.Executives at e-pharmacy companies anticipate little impact from the withdrawal of this notification. 'We operate with the necessary licences under the law…even prior to the notification, we operated in a fully legal and compliant manner. There is a public perception that this notification impacts our business but our lawyers have advised us that as long as we are compliant with the laws, there shouldn't be much of an impact,' a senior e-pharmacy executive told ET. However, there are growing concerns over the operations of quick commerce firms, which are either operating on a store-in-store model (by having a pharmacy operate inside their dark stores) or tying up with licensed online pharmacies.'E-pharmacies have been delivering medicines to the doorstep even before the pandemic, but the law and order were not very specific and clear. The haziness around it was removed after the March 2020 order came, which allowed them legally to do it because of the circumstances,' Gauri Chaudhari, cofounder of pharma and healthcare consultancy firm Brand Innerworld.India's burgeoning online pharmacy sector remains mired in regulatory uncertainty, operating in a legal grey zone that has sparked growing opposition from traditional chemist associations.These lobby groups have voiced strong protests against e-pharmacies, citing the lack of formal oversight, and although the government has made repeated attempts to introduce legislation to govern the digital sale of medicines, no concrete law has been enacted so far.Back in 2018, the Union health ministry issued a draft notification aimed at regulating the sector, which included a proposal to prohibit the sale of medicines without proper registration. However, the draft rules have yet to be finalised, leaving the sector in limbo.Even as a formal law on regulating e-pharmacy operations is yet to be finalised, companies are increasingly moving towards rapid delivery of medicines. ET had reported in March that rapid delivery of prescription medicines is emerging as the next battleground in India's quick commerce industry, with established firms such as Tata Digital's 1mg and Apollo 24/7, and startups vying for a share of this fast-growing market.Quick commerce firms Swiggy Instamart and Flipkart Minutes have tied up with Pharmeasy to offer 10-minute medicine deliveries, and Zepto is setting up this service in its own capabilities.Industry insiders say that despite surging consumer demand for quick medicine delivery, online pharmacies may face significant hurdles that could stall their aggressive growth ambitions. The biggest challenge lies in meeting shorter delivery timelines while complying with complex regulations.One approach being taken by companies, including Tata 1mg and startups such as Bengaluru-based Plazza, is integrating brick-and-mortar pharmacies into the digital supply chain, which allows them to reduce delivery timelines by fulfilling orders from neighbourhood locations instead of centralised warehouses.This hybrid model, however, comes at a steep cost of setting up physical outlets – each of which requires its own licences to retail drugs while complying with strict storage and handling norms under the Drugs and Cosmetics Act.
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