Friday, June 2, 2023

Investors fret over e-pharma policy

NEW DELHI : The Centre’s decision to ban the sale of medicines by online pharmacies has rattled investors, as the move could result in the closure of the firms.

E-pharmacies, backed by the likes of LightRock, Temasek Holdings, TPG Growth, Naspers, Everstone, Fidelity Investments, Think Investments, CDPQ, Orios Ventures, Eight Roads and Fundamentum, have written to the Centre about their concerns over the sudden change in policy.

One of the letters addressed to Deepak Bagla, chief executive and managing director of Invest India, which operates under the commerce ministry, by the head of an e-pharmacy said: “I write to you regarding the recent show cause notice from the CDSCO issued to all e-pharmacy companies raising concerns on the legitimacy of their operations. This has resulted in confusion and anxiety for stakeholders of digital health ecosystem, including entrepreneurs, vendor partners, employees, consumers and investors. Investors are extremely concerned around the news of an ad-hoc change in policy that could shut down online pharmacy platforms.”

Investors have infused over $3 billion in the sector, which has so far serviced over 50 million families in India, he said.

In February, the health ministry issued show cause notices to at least 20 firms, including Tata-1mg, Apollo, PharmEasy, Flipkart, Amazon and Reliance Netmeds, for selling medicines online after the All India Organisation of Chemists and Druggists, with over 1.2 million members, warned of a country-wide agitation if the government failed to act.

A person, who is involved with one of the e-pharmacies, said that they are fully compliant and are open to any scrutiny that the government would want to conduct.

He explained for all the orders received by e-Pharmacies, dispensation of all the medicines is done from a licensed physical pharmacy, having a registered pharmacist.

“E-Pharmacies like us merely play the role of an intermediary technology platform, which is the link between the consumers and a licensed pharmacy and we are covered by the definition of ‘Intermediary’ in the ‘Information Technology Act, 2000’. Such action (banning medicine sales) is directly impacting Ease of Doing Business, mis-information and unawareness about the e-Pharmacy sector,” said another person involved with an e-pharmacy.

Meanwhile, the government is also mulling a complete ban over the online sale of drugs for alleged violation of norms. The health ministry is reportedly discussing regulations and stringent action against e-pharmacies following concerns over data privacy, malpractices in the sector, and irrational sale of drug.

“Move like these hampers these companies’ commitment towards supporting the government’s vision of achieving Universal Health Coverage, providing quality and affordable healthcare to all the citizens of the country and the Digital India initiative of the government. The government could have, instead, used us,” said one of the people quoted above.

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