Online-offline pharmacy collaboration will lead the future: Industry experts

Industry experts believe that tech-enabled collaboration between online and offline pharmacies will be the way forward

According to the FICCI’s white paper report on online pharmacies, the COVID-19 pandemic allowed online pharmacies to thrive – giving patients across the 22K+ pin codes access to medicines during lockdown via their supply chain and high fill rates 95 per cent plus (since they aggregated from multiple licensed vendors). In addition, COVID-19 has changed consumer behaviour and e-pharmacies were viewed as a safe and convenient option.

Analysing the scenario, Shirish Ghoge, Ex-senior Director Government Affairs of Abbott and Ex-senior Director of Public Policy and Government Affairs Sanofi India, said, “The main objective of the healthcare industry is to benefit the patient. Therefore, a collaboration between the offline and online channels is the only way to co-drive value for consumers – e.g., tie-ups with local pharmacies to offer last-mile delivery by allowing offline vendors to expand the base.”

Explaining the benefits of technology which can transform the pharmacy market, he said, “Digital payments and the presence of online pharmacies may also bring in more transparency and price competition in the pharmacy market, thereby making medicines more affordable for end consumers. Partnerships with State Governments will also enable supplies in remote areas. And, access to both online and offline pharmacies will provide options to consumers to choose based on the requirements, availability and price. Therefore I strongly believe, it is imperative that both the models co-exist for patient benefits.”

Dr Varun Gupta, Convenor, Digital Health Platform, commented, “The e-pharmacy sector through an active partnership with existing pharmacies is firmly committed to support the government and help the nation in fighting COVID-19. The industry is working 24×7 to ensure that people get essential medicines at home all across the country, and the reach of existing pharmacies is expanded. Importantly, the regular medicines required for ongoing treatment are also being delivered.”

He continued, “The debate should not be about e-pharmacies vs brick-and-mortar pharmacies, rather between complaint vs non-compliant, irrespective of the channel. We believe that a model of retail pharmacy which is a combination of e-pharmacy and brick and mortar pharmacies, will benefit consumers and make the healthcare system more resilient. This sector needs investments and technology up-gradation to make it more transparent and accessible. The ultimate beneficiary of this advancement is the consumer.”

Speaking on the need for collaboration between offline and online pharmacies, Dr B R Jagashetty, former National Advisor – Drugs Control, Ministry of Health and Family Welfare pointed out, “I feel that, it should work perfectly if both go hand in hand since online business is only a platform to get orders, which have to be fulfilled through licensed premises of their own or in collaboration with existing brick and mortar shops.”

He also highlighted, “The online pharmacy definitely has good growth, but not publishing the final rules for e-pharmacy is hindering not only rightful business but is also an injustice to the customers. There should be proper competition in any business.”

Shetty added, “India is following a policy of making laws, whenever a problem is spotted, rather than enforcing existing laws to solve problems. The Supreme Court has quite clearly said that courts are not to act upon the principle that everything is to be taken as prohibited unless it is expressly permitted. On the contrary, the court has said the principle to be applied is that everything is to be understood as permissible until it is shown to be prohibited by law.”

“Online is only a mode of getting orders, dispense/delivery happens only through licensed premises. Therefore, the government can restrict the type of medicines to be ordered through such platforms instead of keeping quiet without publishing. Overall, customers are likely to get more benefits and existing business will not get affected. It is just like the situation around a decade back when the entrance multiplex theatres and big malls raised apprehensions in the existing players,” Shetty explained.

Commenting on the recent movements in the online pharmacy space which may affect the existence of offline pharmacies, Ghoge explained, “The cash flows with these giants will allow them to acquire new customers that will impact the offline pharmacies. During the pandemic as well, several offline pharmacies were working on home deliveries – though with limited radius. For the next few months, the consumer preference to explore safer options will allow movement of more sales to this channel. There are early signs that while e-pharmacies have been able to reach more chronic users, offline pharmacies are preferred more for acute usage. The offline channel is a strong association with well-established rules and regulations, hence a significant change might take time. However, analysts suggest current penetration, which is a six per cent expected to grow to ~30 -35 per cent by 2025. With new players, proper guidelines and a strict code of conduct is now a pressing need to ensure a healthy competitive environment for co-existence of e-pharmacies and offline pharmacies.”

Ghoge too mentioned, “The past week has witnessed a lot of traction in this space, which is much anticipated given the host of online vendors. The increased investment in this marketplace will only fuel the growth of this segment allowing these players to offer a lot more compared to the existing range of – medicines, diagnostic tests (partnerships with lab chains) and devices. Since long companies have been using this channel for product promotion (smaller SKUs for introduction), given the merits of data at a pin code level – local activations can be explored, exclusive launches across some sites and at the same time give this marketplace a new scale.”

Harshit Jain, Founder and CEO, Doceree expressed, “It is a massive market and business opportunities are enormous for all the players. Also, offline and online are different categories and serve different needs. Online pharmacy can only play a role in chronic illnesses. For acute illnesses and fulfilling needs of senior citizens, the availability, service and discounts of next-door pharmacy can’t be matched.”

Jain said, “Whether online, offline or a collaborated effort, in the end, what matters is a seamless experience for the customers. I can see consolidation to be taking place in the offline ecosystem as well in the near future that would lead to the emergence of ‘hyperlocal pharmacy’ where you would order online and the delivery would happen from the neighbourhood.”

“Going forward, there seems to be significant consolidation in healthcare on the back of aggregation of pharmacies and the crucial announcement of a National Digital Health Mission by the government. I see this bringing a fundamental shift in healthcare delivery with big data becoming indispensable and healthcare turning far more insightful in the times to come. This is the beginning of a new healthcare model post-COVID era which will definitely be data-driven,” he added.