Trader's body CAIT has written to the government alleging violation of the Drugs & Cosmetics Act by sale of pharmacy through e-commerce channels, saying it is adversely affecting the business of lakhs of medicine retailers and chemists.
The Confederation of All India Traders (CAIT) wrote to Commerce and Industry Minister Piyush Goyal, Health Minister Harshvardhan and Defence Minister Rajnath Singh on the issue.
"It is important to note that sale of prescription drugs and medicines through online medium is illegal. The legal regime, under the Drugs & Cosmetics Act, 1940, does not permit home delivery of prescription medicines for which a prescription "in original" is required," CAIT said in the letter to Goyal sent on Friday.
The traders' body claimed that mushrooming of e-pharmacy is causing huge hardships to the retail chemists and distributors in the wake of anti-competitive practices like capital dumping and deep discounting, leading to predatory pricing.
"As soon as the markets started reopening in October 2020, after the lockdown, e-pharmacies like PharmEasy and Medlife indulged in deep discounting on their platforms by giving a flat discount of 30 per cent," it said in the letter to Goyal.
To capture the markets even further, an additional cashback of 20 per cent was extended to customers with free shipping. Effectively, this translated to a whopping discount of around 40 - 45 per cent with free shipping, the traders' body added.
It alleged that e-pharmacies like Medlife and 1mg indulged in predatory pricing immediately after the lockdown by offering a 25 per cent discount on medicines and an astronomical 75 per cent discount on wellness products, a market that had begun expanding in the wake of the Covid-19 pandemic.
Responding to the allegations, PharmEasy Cofounder Dharmil Sheth said online pharmacy platforms connect the existing brick and mortar pharmacies with customers using technology. This improves accessibility, availability and ensure there is complete track and trace of medicine movement across the supply chain.
"It is time to adopt digital tools and platforms in order to bring in efficiencies and transparency in the ecosystem and enable better consumer experience," Sheth said.
The CEO and Co-Founder of 1 mg, Prashant Tandon, said: "We enable licensed pharmacies to connect with and serve consumers seeking medicines, and all our pharmacy partners have the required licences under the Drugs & Cosmetics Act.
"Our nascent industry is just 2-3 per cent of the large and growing Indian Pharma market, and as an industry we are providing customers service and efficiency that is being appreciated".
He observed that all pharmacy players should consider leveraging digital technologies to enhance their business efficiency and reach, and reap the benefits of growth in line with customer expectations.
"It would help the ecosystem move forward and ensure that every small pharmacy can play a role in making National Digital Health Mission a huge success for the citizens of India. We work with thousands of pharmacies across the country and help connect them with customer demand and technology support," Tandon said.
Email sent to Netmeds did not elicit any response till the time of filing of the story.
The Competition Commission of India earlier approved the proposed combination of Medlife and API Holdings.Medlife, a healthcare company, is primarily engaged in wholesale and distribution of drugs. API Holdings is the parent entity of API Holdings group. API Holdings is the parent of PharmEasy, as per reports.