The regulatory framework governing sale of prescription drugs is silent on the legalities surrounding their online trade. The law of the land does not state clearly whether the buying and selling of medicines through websites is legal or illegal, says Mr Prashant Tandon, Managing Director and Co-Founder of an e-health store, Healthkart.com. The purchase and sale of drugs falls under the Drugs (Control) Act, which was formulated in 1950. “When the Act was put together, five decades ago, there was no channel for online distribution of drugs. But times have changed and today the Internet can prove to be a very lucrative channel of distribution,” says Mr. Tandon.
Owing to increasing internet usage in the country, the e-commerce industry has grown exponentially during the past few years. The online travel market comprises of 80 per cent of the total e-commerce, online retail market stands at Rs 2,000 crore and is growing at an annual rate of 35 per cent. The online retail industry is likely to be worth Rs.7000 crore by 2015, with Flipkart being the dominant player, says Prashant who is tapping healthcare for online gains. However, though over-the-counter products are no problem, online trade of prescription medicines is a sensitive issue. There are far too many issues involved regarding safety and authenticity. “Given the safety and legitimacy aspects of the products, it is more the reason for law makers to take note and create proper guidelines,” says Prashant.
Most countries in Europe, Germany and the United States have allowed online sale of medicines. China recently joined the bandwagon by opening the online route for its pharmaceutical industry. Around 20 companies were given licenses and are doing pretty well, says Prashant. In India, barring a couple of companies that sell medicines online, most players are afraid of venturing into that zone because of the uncertainty in the legal framework. “A lack of clarity in the Indian law on the subject dissuades e-healthcare stores from venturing in the direction, he adds.
“We are exploring the idea of prescription business, but do not want to be on the wrong side of the law or regulatory framework,” he says. The company instead is focusing on its consumer healthcare segment, which is huge in itself, says Sameer Maheshwari, managing director and co-founder, Healthkart.com.
“The overall market for consumer healthcare products in India can be pegged at $15-20 billion. Of this, personnel care and nutritional health products are primary,” says Sameer.
Healthkart.com, which recently raised capital from Omidyar Network, Sequoia Capital and Kae Capital, sells home health devices such as thermometers, diabetes testers, elderly and disabled support devices, fitness and sports equipment, eye care products, baby, beauty and sexual health products. The company, which claims a robust 50 per cent month on month growth, is less than a year old.
