Over the past few, the internet and communication technology (ICT) has evolved significantly and empowered the consumer like never before. Today, the consumer has thousands of products and services available through a click of a button. Along with the increased variety/range of products, it has also saved user’s time and money.
Following the trends, a few companies, prominently startups, have also started selling medicine and other healthcare products through online mode. The concept is termed e-pharmacy or online medicine. Over a short period, e-pharmacy has attracted significant attention from consumer and Venture Capital funding. Similarly, to regulate the business operation of e-pharmacy and to safeguard consumer rights, the government across countries has also rolled out policies and practices for online buying and selling of medicine.
What is E-Pharmacy?
The e-pharmacies is an internet-based pharmacy that allows the user to buy medicine without visiting brick-and-mortar pharmacies. With the advent of the internet and consumer literacy, the e-pharmacies growth has risen sharply over the past four-five years. Utilising the experience of buying the online product over the years, the consumer today is confident to buy the medicine and other healthcare products through online mode.
The demand for online medicine is mainly confined to urban areas; however, with the advancement of technology and logistics services, e-pharmacy is expected to spread to new geographies. In recent times, the Covid-19 pandemic has also accelerated the growth of e-pharmacies.
How E-pharmacy works?
In e-pharmacy, the consumer uploads the scanned copy of the prescription and places the order for the required drugs on the mobile application or on the website. The registered pharmacists at their end analysed and verified the prescription and, accordingly dispense the medication to the users. The whole process may take a few hours to weeks depending on the availability of the drugs, location and supply chain system. The e-pharmacy operates and governed under the IT Act of the respective country. The acts cover the various provisions related to user information privacy, prescription details, and others.
One of the critical factors associated with e-pharmacy is compliance. The companies have to take a licence to operate and sell medicine. Companies deliver the medication only after the verification of the patient and registered medical practitioner details. It is found that the companies operating in the e-pharmacy space follow the complaints more strictly than the traditional offline pharmacies.
Over the past few years some, big investors and brands worldwide have shown interest in e-pharmacies. Today the e-pharmacies has become very competitive spaces with many dominant players. Some of the key companies operating in the e-pharmacy space include Kroger, Walgreen, CVS Health, Netmeds, Medlife, Echo, Giant Eagle, Inc, OptumRx, 1mg, EasyMedico, EMEDIX, Express Scripts Holding Company and many others.
What are the benefits of E-pharmacies?
To the user, the overall process of ordering prescription drugs is found to be easier and convenient. The consumer need not to visit the pharmacy and wait in queues. The drugs can be ordered at any time, and the prescription is also delivered to the doorstep. Pricing is another attractive feature of e-pharmacy. It is found that the online pharmacy offers better pricing than offline stores. To gain market share and maintain loyalty, the companies provide enticing discounts offers to customers from time to time. In some cases, the e-pharmacies can provide some medicine that is not available at the nearest pharmacy, and reduce the risk of counterfeit/substandard drugs.
To the companies operating in the e-pharmacy space, it provides the opportunity to maximise the profit margin. The e-pharmacy purchases the bulk of medicine directly from pharmaceutical companies or distributors, which helps them to get the drugs at a substantial discount rate. With the help of modern technology, it is becoming easier for companies to track the order details, counterfeit medicines, customers’ consumption patterns, and help them to predict future demand. E-Pharmacy has the potential to overcome the loophole in the offline market as well, especially in the case of taxes and billing. E-Pharmacy companies maintain the record and document of every transaction, making it easier for the government to calculate the taxes and reduce tax loss.
What are the drawbacks of E-pharmacies?
The chances for selling unapproved prescription drugs are always there with online pharmacies, especially in countries with no well-defined dedicated laws to sell or buy pills. Generally, such practices are observed to be higher in developing countries. The lack of personal interaction with the physician and pharmacists is another major drawback of e-pharmacies. Sometimes the user may not be able to get the required information regarding the prescribed drug. In the case of unavailability of the needed medications, the user may receive a substitute product from a different brand, affecting his/her future buying decision. Similarly, the urgent requirement of medication cannot be fulfilled. The user has to wait for a while to get the delivery of the drug.
What are the major challenges in the E-pharmacies market growth?
The fear of receiving counterfeit medicines is one of the major issues that hesitates the user to switch offline to online pharmacies. The language barrier, the timely delivery of the medication, quick redressal of the issues are other challenges in the e-pharmacies. Similarly, concerns regarding the software design such as poor screen design and menus, automatic filling functions, payment options and legitimacy of the website also negatively affect the user attitude toward e-pharmacies. Apart from these, the issue such as drug abuse, misuse, self-medication, re-ordering of the prescribed medications by the consumer is a major challenge in front of healthcare authorities.
Future of E-pharmacies
The online pharmacy is an attractive space that offers a lot of benefits to both sellers and buyers. Over the past few years, the e-pharmacies concept has observed a significant growth rate with massive private equity / VC funding investment. The Covid-19 pandemic has also attracted a number of first-time buyers from online pharmacies, the trends are likely to continue in the coming years as well owing to the demand for chronic medications. The volume of online pharmacies is expected to rise near future as well due to the factors such as rising per capita income, increase in households healthcare spending, internet penetration to new geographies (especially to the rural areas), improvement in supply-chain (logistics) and an increase in smartphone ownership. Similarly, the improvement at the technological front such as digital payments infrastructure, seamless internet connectivity, will also provide momentum to the e-pharmacies growth rate. However, data privacy especially related to the user’s personal health records and prescriptions is one of the major issues that may affect the growth of e-pharmacy.