Retail Chemists Call for Ban on E-Pharmacies Amidst Predatory Pricing Concerns

New Delhi- In a letter addressed to JP Nadda, the BJP Chief, the organization claiming to represent around 12.40 lakh chemists across the country has also demanded a ban on deep discounts and discount advertising, citing predatory pricing practices by online platforms and chain stores to prevent the exploitation of small retailers.

The advent of the Internet has enabled the rise of e-commerce, which has, in turn, disrupted the retail sector significantly. The online grocery and food delivery segments have witnessed rapid growth, especially during the COVID-19 pandemic, as consumers increasingly turned to online platforms for their daily needs. Direct-to-consumer (D2C) brands have gained traction in India, leveraging e-commerce platforms to reach consumers directly without relying on traditional retail channels.

The e-commerce space has also transformed the landscape of the pharma sector in India. The e-pharma sector received a massive boost during the COVID outbreak when people turned to online platforms to order medicine, avoiding physical visits to their neighboring pharmacies.

However, the rise of the e-pharma sector has severely impacted the retail pharma sector. Small retailers are feeling the pinch, prompting the All India Organisation of Chemists and Druggists (AIOCD), an industry body representing India’s retail chemists, to ask the ruling Bharatiya Janata Party (BJP) to incorporate the demand for a ban on e-pharmacies into its manifesto.

AIOCD has also demanded the removal of Schedule K of the Drugs and Cosmetics Act 1940 Rule, 1945, which permits retailers to sell 16 specific drugs Over-The-Counter (OTC) only with a valid license.

Speaking to The Mooknayak, Jagannath Shinde, the president of All India Organisation of Chemists and Druggists, said, “The online medical sale is illegal in India, as the sale of medicines is covered under the Drugs and Cosmetics Act 1940 Amendment 45, and the sale of drugs must be done physically.”

Shinde added that fake drugs are also making their way onto these platforms, and drug inspectors have found that the sender's address is fake upon investigation.

Pointing out the effects of e-commerce, Vishram Chandra, a medical retailer from Lucknow, who has been in the trade for more than 30 years, told The Mooknayak, “The online platforms purchase products from the manufacturer in bulk, enabling them to get a steep discount. Additionally, they manage to circumvent taxes through manipulation, enabling them to sell products at a discount, which affects retailers.”

He said that besides discounting, retail pharmacies are also facing other problems, as some consumers manage to return medicines purchased online to the retailers, as the return of medicine is not viable in most purchases.

In February 2023, the Ministry of Health issued show cause notices to sellers like Tata-1mg, Flipkart, Apollo, PharmEasy, Amazon, and Reliance Netmeds for selling medicines online.

Besides the online space, organized retailers with deep pockets are also pushing small retailers out of business.