Despite controversy over Snapdeal selling prescription drugs, more start-ups to sell medicines online

Despite the controversy over Snapdeal selling prescription drugs online and confusion regarding the rules, new portals offering the service continue to prop up.

The latest to join the bandwagon is former iGate CEO Phaneesh Murthy-promoted PM Health and Life Care (PMHLC), which is set to launch an e-venture for selling pharmaceutical products. The Maharashtra Food and Drug Administration had recently cracked down on e-marketplaces including Snapdeal for selling medicines online.

As pharma e-tailing is at a nascent stage, compared to other e-commerce segments, and offers huge growth opportunities, the development has not deterred entrepreneurs looking to make a mark in the online space.

There are a couple of other players including Medidart, Buydrug and Meramedicare, etc which all have an online presence but with different work models. However, the common link between all these retailers is that you must upload prescription for prescribed drugs while placing orders.

The retail market place for medicines is estimated to be around $10 billion which is likely to become $56 billion by 2020. Start-ups like PMHLC are eyeing huge growth potential in this space. PMHLC, a healthcare technology company that would act as a marketplace connecting druggists and pharmacists to the consumers, plans to go online sometime between July and September in full compliance with the law of the land.

Hemant Bhardwaj, CEO & co-founder, PMHLC, told dna that there is no express prohibition on online sale of medicines in India. "It's just that every new concept goes through testing times till it gets accepted. So whoever is doing retailing of prescription medication should remain compliant with the law of land. We have known about actions taken by regulators earlier against both online and offline retailers who flouted norms."

However, the Maharashtra Food and Drug Administration has a slightly different take on the matter. "Our stand is that online sale of medicines is not ethical as so far the Drug Controller has not come out with a circular allowing it. Lack of a proper policy is putting us too in a difficult situation as we are trying to curb the practice. As long as online sale of medicines is done in compliance with the law and retailers have proper licence, we have no issue," said a senior official of Maharashtra Food and Drug Administration, adding a medicine can be sold only with a proper prescription, supported by a proper bill from the retailer along with the pharmacists' stamp on it. The official also said that selling of even emergency contraceptives, both online and offline, without prescription is unethical.

According to the Drugs and Cosmetics Act, 1940, only a licensed retailer is entitled to offer the sale of drugs and that too on the basis of a prescription by a doctor, while as per the Drugs and Cosmetics Rules, 1945, Schedule H drugs could be sold by retailer on the prescription of a registered medical practitioner only, while Schedule X drugs (which includes narcotics and psychotropic drugs causing delusion, hallucination, psychosis, sedation and hypnosis) can be sold for which the retailer is to preserve prescription for a period of two years.

Last year, the government also included a new provision, Schedule H1 to the Drugs and Cosmetics Act, 1940 where about 46 drugs have been put under restricted category. The drugs mostly comprise third and fourth generation antibiotics, anti-TB among others. The move is to check indiscriminate use of all these drugs and sale without prescription. Besides, the chemist should retain a copy of the prescription and maintain a separate register for these drugs where the name of the patient and the details of the doctor who prescribed the drugs will be noted. This register will have to be maintained for three years.

So, while PMHLC has expressed its intention to follow all necessary methods to remain fully compliant with the law, a few customers who would like to purchase a few Schedule X drugs (morphines, sleeping pills, etc) on this platform will find it difficult. "We will not allow sale of Schedule X drugs in this platform as these drugs often get misused," Bhardwaj said. The Maharashtra FDA official too clarified that Schedule X drugs cannot be sold online.

Bhardwaj said, "As per the rule, when a pharmacist disperse a medicine, he needs a copy of the prescription. But only a few chemists follow this. We realised it is important to remain compliant with the law to make our model work. So, for us, the prescription would be the Bible."

PMHLC, which is looking to raise another $5-7 million from venture capitalists apart from Murthy-family funded seed fund of about $3.5 million, has invested over $1 million on building its technology. The e-venture platform plans simultaneous launch in 10 cities on day-1 which would include Bangalore, Chennai, Hyderabad, Mumbai, Pune, Ahmedabad, Delhi, Noida, Gurgaon and Kolkata, followed by about 50 more cities over the next one-and-a-half year and then to 100 cities in two years' time.

"We are aiming to cross 1 million transaction in the first year of operation, and the long-term mission is Rs 2000 crore of gross merchandise value by 2017," Bhardwaj added.