‘Unethical For Pharmacy To Advertise Discounts': Pharma Expert Raj Vaidya On Online Vs Offline Pharmacies

Offline pharmacies have had a tough time in the last couple of years. The entry of online pharmacies has affected their business considerably. A few weeks ago, news emerged that online pharmacy PharmEasy was set to raise fresh money, around Rs 2,400 crore, at a valuation that was 90% down from its peak of $5.5 billion in October 2021.

PharmEasy appears to have done what all firms with venture money did in recent years – which is to buy other companies, in this case, distributors, supply chain software and assorted services, all of which kept investors happy and the pink press buzzing. In reality, nothing went anywhere because there never existed the bandwidth or more importantly the business model to sustain it.

Online pharmacies in the past have been fast, the interfaces slick and the choice of medicines and pharmaceutical products vast. However, as time passed, users observed that the number of drugs that needed a prescription steadily started rising. The process of uploading prescriptions was as smooth as could be but still cumbersome.

But offline pharmacies have struggled, not just with online ventures, but also due to the increasing presence of offline chain pharmacies that have made their business a lot harder in some parts of the country. Nevertheless, they seem to have banded together in some way and are exploring how they can become of greater relevance to the consumer.

To understand the pharmacist perspective, Govindraj Ethiraj, Founder, The Core spoke to Dr Raj Vaidya, Immediate Past Chairperson of the Indian Pharmaceutical Association's community pharmacy division.

Here are edited excerpts from the interview:

How do you view the threat of online pharmacies?

See, additional business whether online or otherwise will definitely affect existing players. Online pharmacies have had a significant impact. If one looks at the statistics, we can see that they are increasing gradually every year. They also have a higher impact due to their sustained marketing campaigns - celebrity endorsements, driving home features such as easy accessibility to medicines, convenience, and doorstep delivery. Most importantly, the huge discounts offered by the online pharmacies have helped attract customers in a big way.

Today, even offline pharmacies or the local chemist are also offering some kind of discounts. Is this in any way an indicator to the fact that the local chemist could have given better prices in the past?

No, not exactly. The local chemists work on their profit structures. The margins that are being offered online often have a catch-the asterisk or the conditions apply terms. This would also mean that discounts more often than not would be lesser than the advertised percentage. The local chemist will not be able to give those discounts.

Even now, I believe they are doing so to survive the competition because apart from online pharmacies, offline chain pharmacies too, especially in the big cities, are affecting their business. Chains too offer discounts and free door deliveries. As a result the chemist is facing competition from both the online pharmacy and offline chains. It is a double impact. So, left with no option, in desperation they are trying their best and are offering discounts. However, I do not think that is viable. Even as the chemist tries to offer better discounts to please their customers they would have to recover the money they are losing from someplace. And this unfortunately could lead to malpractice. That is a possibility.

In the past, it's been pointed out that there are not enough safeguards on prescriptions online. Is there any evidence to suggest that something has gone wrong because of inadequate safeguards, as many offline pharmacies have said so?

There are no safeguards in the online pharmacies, no control of the drug regulators. In actuality, in our country, online have not been clearly defined. So it just happened and now it is rampant. And it now looks very difficult to take it back. See, there have been orders from the High Court, and even from the Supreme Court. The Controller has issued two orders so far. The Health Minister took it up and ensured that orders were in place to prevent such things. But it still continues to function. Law implementation in our country is lacking, not only in this department but other departments too. Unfortunately, here we are playing with lives and that is disturbing.

Do you feel that offline chemists have lost business in the last few years?

Yes, and we can understand this is mainly from the news articles and by word of mouth. People we know of are talking of considerable reduction in business. So, they are trying to negotiate with the wholesalers to get discounts that can then be passed on to their customers. They are doing this in a bid to survive the bigger chains and online pharmacies that offer larger discounts. That is the reality, it may not be across the board but that is the general sentiment. Actually, it is unethical for a pharmacy to advertise that they are offering discounts. But then unfortunately today whether it is ethics or law, it's all getting washed under the carpet.

Looking ahead, what should offline chemists do to retain or even increase their market share? Given that many online pharmacies could face problems due to funding issues, what do you think needs to change with regard to the local chemist?

Through our associations we are trying to inculcate professionalism in local pharmacies. We are encouraging them to try and offer patient care services as they have knowledge of the neighbourhood and would know the needs of the residents. They could offer value added services like measurement of blood pressure, blood sugar, counselling services, labelling of medicines, giving information and instructions and following up with their customers. These are the need of the hour and they are well placed to offer these have been in the business for so many decades.