Top e-pharmacy players such as Tata 1mg, Reliance NetMeds, Flipkart Heatlh+ and others are likely to take a hit as the government is planning a U-turn on its approval for online pharmacies due to “concerns over data privacy, sales of medicines without prescription and predatory pricing”, according to reports.
According to sources quoted by News18, the government is doing a rethink on the approval given to e-pharmacies as there are high risks involving patient safety due to a “concession race” among players, besides data issues related to medicines.
An official quoted by the news portal said the “health ministry has taken note of malpractices reported in the sector which lead to concerns over data privacy, sales of medicines without prescription and predatory pricing”.
The Drug Controller General of India (DCGI) had in February issued show-cause notices to several e-pharmacy companies, including Amazon, Flipkart, Tata 1MG and others for violation of the Drugs and Cosmetics Act 1940, as they were found to be selling schedule H, H1 and X without a valid licence.
The government is also working on rules for e-pharmacies and had issued a draft bill seeking comments from stakeholders.
The e-pharmacy space is a fast growing sector. Tata-1mg, Flipkart Health+, Apollo Pharmacy, Amazon Pharmacy, PharmEasy, Amazon, MedPlus, and Reliance Netmeds are some of the key players in this space.
Axis Securities report dated Feb 2022 ssaid that e-pharmacy market (including Omni channel and online) has seen CAGR of 106% over FY15-20 to reach a size of Rs 38 billion in FY20.
In FY21, e-Commerce (Pharmacy) witnessed strong growth of 50% year on year led by 71% year on year growth in omni channel sales and 48% growth in online purchases given COVID-led increase in demand.
e-Pharmacy market is expected to see CAGR of 42% over FY21-25 to reach market size of Rs 230 bn in which Omni channel sales to see CAGR of 43% to reach Rs 25 bn and online to see CAGR of 42% over FY21-25 to reach market size of Rs 205 bn.
Reliance had invested Rs 620 crore in NetMeds to take a majority 60 percent control while Tata was reported to have put $220 million to acquire 55% stake in 1mg. MedPlus had raised Rs 418 crore from a number of fund houses, including Abu Dhabi Investment Authority, BlackRock Global Funds, Fidelity, Nomura, Goldman Sachs, Morgan Stanley, HFFC Life Insurance Company, ICICI Prudential Life Insurance Company and SBI Life Insurance Co Ltd, SBI Mutual Fund (MF) and Aditya Birla Sun Life MF.
The All India Organisation of Chemists and Druggists (AIOCD) has been at loggerheads with e-pharmacies and has sent repeated complaints to the government over violation of the Drugs and Cosmetics Act.
Also read:
(Edited by : Pradeep John)
Check out our in-depth Market Coverage, Business News & get real-time Stock Market Updates on CNBC-TV18. Also, Watch our channels CNBC-TV18, CNBC Awaaz and CNBC Bajar Live on-the-go!
Gonda Lok Sabha election: BJP's Kirti Vardhan Singh takes on Beni Prasad Verma's granddaughter Shreya
May 19, 2024 10:19 PM
Faizabad Lok Sabha election: Can Ayodhya Ram Temple strengthen BJP's stronghold here?
May 19, 2024 10:16 PM
Amethi Lok Sabha election: Can BJP's Smriti Irani retain the Congress bastion she won in 2019?
May 19, 2024 10:12 PM
Rae Bareli Lok Sabha Election: Can Rahul hold on to this Gandhi family bastion?
May 19, 2024 10:09 PM