<div><strong>By CH Unnikrsihnan</strong></div><div> </div><div><div>I met 27 year-old Dharmil Sheth, co-founder of PharmEasy, an e-pharmacy start-up based in Mumbai, over a coffee at the St. Regis hotel, on Wednesday. I was interested to meet him because of two reasons. First, the subject 'online pharmacy' is quite topical now and I was curious to know what’s different in his model from others, and secondly, how do these guys afford to give heavy discounts on the medicine prices when they deliver it at home. </div><div> </div><div>As you know, online pharmacies have been the talk of the town in the last fortnight after the country’s 9,00,000 odd chemists closed shops on October 14 to protest the government move to appoint a committee for making a regulatory framework for e-pharmacies. </div><div> </div><div><table align="right" border="1" cellpadding="2" cellspacing="2" style="width: 200px"><tbody><tr><td><img alt="" src="http://bw-image.s3.amazonaws.com/unninWEB.jpg" style="width: 200px; height: 200px; margin: 1px; float: right;"></td></tr><tr><td><strong>C H Unnikrishnan</strong></td></tr></tbody></table>E-pharmacies are not new to Indian patients as scores of ads and promos of such online stores pop up on your browser every time you open one. Most of these online pharmacies, which offer nutritional products to sex enhancing capsules, including several prescription drugs,at huge discounts typically do not show the contact address or source of products that they offer to deliver. </div><div> </div><div>There is no official statistics available as of now to show how many people lost their money or how many patients got cured by taking the medicines delivered through these flashy websites and apps. But, since these sites have their servers based somewhere outside the country, Indian regulators can do nothing about it, to ban or allow. </div><div> </div><div>But, when it comes to a dozen odd local e-pharmacies that have come up recently, the government should have some say. As a matter of fact, their models are not very different from the ones that is mentioned above except the access to the names and addresses of the promoters. These new start-ups, which promise that the sales are purely prescription based, too talk about heavy discounts on medicine prices and delivery of the products at the patients’ doorstep.</div><div> </div><div>Now, the bigger dilemma that the Indian regulators are in at present is whether it’s time to recognise this model or not, and if yes, how to regulate them. India's Drugs and Cosmetics Act under which the pharmacy trade is regulated at present does not talk about this new model as this Act was drafted when the country did not even have a computer. The other the issue is the threat of strong protest from the offline trade, which argues that the online trade will lead to abuse of prescriptions and other ethical practices, though their real fear is the likely loss of revenue. </div><div> </div><div>Dharmil Sheth explains that his model is ethical, safe and patient friendly and it asks for prescription as the patient needs to send a digital copy of the same when placing the order. . According to Sheth, the patients are offered a flat 20 per cent discount on their bills. His supply partners are the existing neighbourhood medical stores in every city that he operates and the delivery boy also cross check the prescription at the time of delivery. </div><div> </div><div>According to Sheth, they are able to offer 20 per cent discount as they generate high volume of business for his supply partner. At this rate of discount, one should assume that the retail partner passes on his entire retail margin, if not more, to the buyer. As per the industry data, the wholesale margin for drugs and pharmaceuticals in India is typically 8-12 percent. While, the retail margin is 15-17 per cent of the maximum retail price (MRP).</div><div> </div><div>But, one key issue in the online trade that the the e-pharmacy entrepreneurs, drug industry as well as the regulator are silent at this point in time is the inventory movement and the system to monitor this movement. </div><div> </div><div>In the offline model, the medicines are sold and dispersed at a medical store, which is licensed by the drug authority. This helps the authority to inspect the place at any time during the business to ensure that the inventory stocked there are genuine and safe. The regulator also mandate the presence of a qualified pharmacist at the store and also specifies norms about storage conditions that is essential for maintaining quality, stability and efficacy of medicines.</div><div> </div><div>But, in the new model, neither the patient nor the regulator has any clue on where the medicines are sourced from and where are they kept. The patient also knows nothing about the delivery boy and whether the products that he brought were manufactured by a licensed drug maker. </div><div> </div><div>I don't doubt Dharmil Sheth. But, there could be a black sheep in the trade. </div><div> </div><div>So, should India--a market already known for rampant cases of drug counterfeits even with the existing licensed brick and mortar stores-- open up another big avenue for the counterfeiters without the required checks and balances?</div><div> </div></div><div> </div><div> </div><div> </div><div> </div>