E-pharmacies offer customers different types of bait: discounts, cashback, free shipping and so on. However, are they not blatantly in violation of the provisions of the Drugs and Cosmetics Act of 1940? SME Futures spoke to Ashish Grover, Hon. Secretary of the Delhi Drugs Traders Association and Secretary General of the Confederation of All India Traders team, Delhi, to get to the heart of the matter.
Here are the excerpts from the interview:
The Confederation of All India Traders (CAIT) has alleged that the e-pharmacy companies are breaking laws. To what extent do these allegations hold up?
There are e-pharma companies and certain pharma portals that are doing serious business and breaking laws right under the noses of the government. In fact, the government has done nothing to control them. This has given the traditional wholesalers a huge blow. Three years ago, the wholesalers had a business of Rs 1 crore per month. This has been halved to Rs 50 lakhs. The same is also true for the small and medium-sized traders. The families associated with them bear the brunt of this. It’s a chain reaction.
It has also been claimed that the e-pharmaceutical companies sell drugs at floor discounts – sometimes as much as 40 percent. Your opinion.
We also give discounts; the chemists too. But when we do, controversy arises. Sometimes a ban is imposed on selling medicines at a discount. Prices are also subject to controls. But when e-pharma companies do the same, there’s no one to stop them. The government has no control over them. It does not stir dust. Many low standard e-pharma companies have also joined the company. Nobody knows what they sell!
Are you saying that quality is compromised?
Perhaps. Who knows! Is the quality of the medicines sold online checked? Any control over the ingredients needed to make a drug? We only see that discounts are offered, but at what price? Any local pharmaceutical company can give you the discounts that these e-pharma companies offer. But the customers want to buy branded drugs and get a discount while sitting at home. Online businesses can afford to give 40% off, but we can’t cut prices that drastically.
But why is the price difference so big when we buy medicine from the offline medical stores?
Look, when a medical shop opens, it needs a huge investment – from Rs 20 lakhs to Rs 50 lakhs depending on the location and the medicines stored in it. So the discounts or prices vary.
Now, when Dava India, inaugurated by legendary cricketer Kapil Dev, offers a 50 percent discount on its self-dispensing medicine vending machine, we can’t match it. The e-pharma companies have disrupted the retail chain. C&F’s agents give supplies to the distributors; from the distributors they reach the dealers and eventually the retailers get them. Everyone in the chain therefore has a margin. E-pharmacists have broken this chain and this affects both the small and medium-sized entrepreneur and those attached to it.
The e-pharma thus poses a threat to both small and medium-sized traders and drugstores.
Yes. E-pharma companies are like slow poison to the small retailers. Their businesses are on the brink of collapse. Every day a new e-pharma company pops up and that causes huge losses for the drugstores. If this trend continues, many stores will be forced out of the market. Now Jio Mart also opens pharmacies. Jio Mart takes over goods/stocks directly from the companies so that they can make more profit and thereby sell medicines at rock bottom prices.
CAIT says there should be checks and balances for the e-pharmacy companies. How can this be done?
There must be a watchdog. At least on some fronts, the government needs to develop policies to prevent the e-pharma companies from breaking the rules. Offline stores that have been licensed by the government to operate and also tax them should be promoted and supported in some way.
Even if a small merchant wants to turn his business into an online business, he can’t do it because he doesn’t have the big infrastructure to do it.
Prescriptions are important. But there are allegations that the e-pharmacies are even dispensing medicines without a prescription. Is it true?
Many e-firms do just that. However, if you buy drugs without a prescription from an offline store, they will ask for a prescription. In addition, the retailers will assist a customer who is not fully aware of the drug by guiding him/her regarding the dosage of a drug, how to take it, etc. This facility is not offered online. Therefore, it is high time for the government to give us some protective shields and put in place certain rules to regulate the business of the e-medical companies.
The e-pharmacy companies should be allowed to do business with high quality medicines, which can cost up to Rs 4 lakhs. The small shopkeepers cannot keep such medicines. When people buy medicines online for headaches or stomachaches, the local retailers and wholesalers suffer huge losses because it is a chain. When a medical store closes, it’s not just the three people who work there that are affected; both their families and the families of those involved in the chain also suffer.
Is the government listening to your grouse?
Not really. It actually doesn’t do anything concrete. If e-pharmacies continue to grow, there is a fear that more people will jump on the bandwagon without thinking about the long-term consequences. The offline stores will close. The retailers will not be able to survive the onslaught of the e-pharmacy companies. Without checks, these e-firms will continue to thrive.
I can understand that the e-pharmacy companies that are already doing business are unstoppable. But the government has to set a number of parameters and draw up guidelines for them.