E-pharmacy firms are like a slow poison for the small retailers
The government must set some parameters and draft some guidelines for the e-pharmacies: Ashish Grover, Delhi Drug Traders Association
Neil Banerjee June 23, 2022
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E-pharmacies are offering customers various kinds of baits: discounts, cashback, free shipping and so on. However, aren’t they blatantly flouting the provisions of the Drugs and Cosmetics Act, 1940? SME Futures spoke to Ashish Grover, Hon. Secretary of the Delhi Drugs Traders Association and General Secretary 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 firms are flouting laws. How far do these allegations hold ground?
There are e-pharma companies and certain pharma portals that are doing brisk business while breaching laws right under the nose of the government. In fact, the government has done nothing to check them. As a result, the traditional wholesalers have taken a huge hit. Three years ago, the wholesalers had a business of Rs 1 crore a month. This has been reduced by half to Rs 50 lakhs. The same is true for the small and medium traders as well. The families attached to them are bearing the brunt of that. It’s a chain reaction.
It has also been alleged that the e-pharma firms are selling medicines at rock bottom discounts – sometimes as low as 40 per cent. Your views.
We also give discounts; the chemists do too. But when we do that, it raises a controversy. Sometimes, a ban is imposed on selling medicines at a discount. A control is imposed on the prices as well. But when e-pharma companies do the same thing, there’s no one to stop them. The government has no control over them. It doesn’t stir any dust. Many low-standard e-pharma companies have also entered the business. Nobody knows what they are selling!
Do you want to say that quality is being compromised?
Perhaps. Who knows! Is there any check on the quality of the medicines being sold online? Any check on the ingredients that go into making a medicine? We only see that discounts are being offered, but at what price? Any local drug company can give you the discounts that these e-pharma firms are offering. But the customers want to buy branded medicines as well as get a discount while sitting in their homes. Online companies can afford to give 40 per cent discounts but we can’t slash the prices so much.
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But why is the price disparity so glaring when we buy medicines from the offline medical stores?
See, when a medical shop is opened, it needs a huge investment – from Rs 20 lakhs to Rs 50 lakhs, depending on the location and the medicines being stocked in it. So, the discounts or prices vary.
Now, if Dava India, inaugurated by legendary cricketer Kapil Dev, offers a 50 per cent discount over its self-dispensing medicine vending machine, we can’t match it. The e-pharma companies have disturbed the retail chain. The C&F agents give stocks to the distributors; from the distributors they reach the stockists and eventually the retailers get them. So, everyone in the chain has a margin. E-pharmacists have broken this chain, and this has affected the small and medium businessmen as well as those who are attached to them.
So, the e-pharmas are posing a threat to the small and medium traders as well as to the retail chemists.
Yes. E-pharmaceutical firms are like a slow poison for the small retailers. Their businesses are on the verge of collapse. Every day, a new e-pharma company is popping up and that is causing huge losses to the drug stores. If this trend continues, many stores will be elbowed out of the market. Now, Jio Mart is also opening pharmacies. Jio Mart takes goods/stocks directly from the companies, so they can earn more profits and are therefore in a position to sell medicines at rock bottom prices.
CAIT says that there should be checks and balances for the e-pharmacy firms. How can this be done?
There has to be a watchdog. At least on some fronts, the government must devise some policies to prevent the e-pharma firms from breaching the rules. Offline shops that have obtained a licence from the government to function and also give taxes to it, should be promoted and given some type of support.
Even if a small trader wants to turn his business into an online one, he can’t do it because he doesn’t have the big infrastructure that is required for it.
Prescriptions are important. But there are allegations that the e-pharmacies hand out medicines even without prescriptions. Is it true?
Many e-firms are doing just that. However, if you buy medicines over the counter from an offline shop, they will ask for a prescription. Moreover, the retailers will also help a customer – who is not fully aware about the drug — by guiding him/her regarding the doses of a medicine, how to take it, etc. This facility is not offered online. Hence, it’s high time that the government provides some protective shields to us and institutes certain rules to regulate the business of the e-medical companies.
The e-pharmacy firms should be allowed to do business in high-end medicines, which could cost up to Rs 4 lakhs. The small retailers can’t keep such medicines. If people buy medicines for a headache or a stomach ache online, then the local retailers will run into huge losses and the wholesalers will also be affected, because it’s a chain. When a medical store closes down, it’s not just the three people working there who are impacted; their families as well as the families of those who are involved in the chain, suffer too.
Is the government listening to your grouses?
Not really. Actually, it is doing nothing concrete. If e-pharmacies continue to mushroom, there is a fear that more people will jump on the bandwagon too, without thinking about the long-term consequences. The offline shops will shut down. The retailers won’t be able to survive the onslaught of the e-pharmacy firms. Without checks, these e-firms will continue to flourish.
I can understand that the e-pharmacy companies which are already doing business can’t be stopped. But the government must set some parameters and draft some guidelines for them.