Blog Details

Co-author: Sonali Sinha

Introduction

Over the past few decades, there has been a tremendous development in the field of consumer behaviour. That resulted in the change of business behaviour and marketing. Offline shopping ceded transactional activity to online in alignment with consumer preferences. Buying anything online has become a generally accepted practice. The field of pharma is no exception to this. Buying medical needs online is no longer an outlier social activity. This led to increased online pharmacies that have become one of the fastest-growing and most trending patterns for commercial activity. It has been found that India's growth rate in e-commerce revenue is now larger than most nations. India has witnessed buoyancy in the field of e-commerce over the past few years. An upward curve has been seen in the most recent past, particularly during and post Covid-19.

Who are the intermediaries?

Intermediaries are entities that provide services online both to sellers and buyers through the use of technology. The Information Technology Act, 2000 govern Internet Intermediaries. The Information Technology Act 2000 defines the term intermediaries as:

“With respect to any particular electronic records, any person who on behalf of another person receives, stores or transmits that records or provides any service with respect to that record and includes telecom service providers, network service providers, internet service providers, web hosting service providers, search engines, online payment sites, online-auction sites, online market places, and cyber-café.”

Section 2(1)(W) of the IT Act, 2000 (henceforth referred to as the IT Act) gives a wide definition of an intermediary, about any electronic record in one of the two ways below:

1. A record any person receives or transmits on behalf of another person 

                                                   OR

2. Provides any services for a record.  

Further, the Section also talks about telecom service providers, internet service providers, search engines, and the online market place. Therefore, Section 2(1)(W) of the amended IT Act (in the year 2009) also regulates e-pharmacies, which are considered intermediaries as they supply medical services on an online platform.

Section 79 gives safe harbour protection to the intermediaries from liability for unlawful acts such as the sale of counterfeit drugs through patent infringement committed by a third party. However, for safe harbour protection, the intermediary must discharge its duties with due diligence. Further, safe harbour protection is only limited to those e-pharmacies or intermediaries that act as facilitators alone and do not participate in any creation or modification of any data or information.

Online pharmacies or e-pharmacies

Technological advancement and digitalization have together enabled better consumer reach and engagement. The transition to online marketing has been quite rapid, as already discussed above.  An online pharmacy or what we call e-pharmacy is a virtual platform or internet-based medium which provides medicines online while operating through websites or mobile apps. In this hard time where life is too busy, and the mortality rate is high, there is a huge surge in e-commerce, including medicines. With the e-pharmacies, a consumer can place his order online at the e-pharmacy website/app, and the medicine/drugs are delivered to the consumer's chosen address. As a result, a consumer is not required to visit the pharmacy himself. However, for prescription drugs, the consumer has to upload a scanned copy of the prescription on the website or app. Whereas, for over the counter (OTC) medicines, the consumers can order directly.

Moreover, online pharmacies operate on the three business models. Firstly, the inventor model where the e-pharmacy itself possesses the drugs and sells them to the customers directly via its website or app. Secondly, the market model where e-pharmacies act as intermediaries or as a platform to buy or sell medicines/drugs. The third one is the combination of both. Some of the majorly known e-pharmacies are Netmeds, Medlife, pharmeasy, 1mg, Udaan, Meesho, etc. Several new startups with the same line of thought and objectives are sprouting up even to date.

Benefits and Risks associated with e-pharmacies

The demand for e-pharmacies is increasing day-by-day because of the benefits associated. Some of the most common benefits of e-pharmacies are mentioned below:

• Increase or improvement in consumer convenience and access to drugs/medicines.

• Online discounts offers make e-pharmacies very cost-effective.

• Most online pharmacies offer value-added information such as drug instructions, medicine reminders, drug side effects, etc. 

• The consumer can track purchase history of all drugs/medicines readily using any compatible device and know details of medicine/drug, its batch number, and the retail supplier pharmacy.

Conclusion

With plenty of benefits, there are also many risks associated with e-pharmacies. The most common concern is that e-pharmacies dispense drugs based on a scanned copy of a prescription which may not be actual. Another risk involved with e-pharmacies is the existence of illegal e-pharmacies, which may sell low-quality drugs. Further, the consumer’s privacy is at risk as the information is stored online. Some drugs require specific storage conditions, and if they are not maintained properly may lose their effectiveness and potency. Finally, a major risk is that minors or children, who are tech-savvy, might order drugs online and potentially consume them without parental supervision.  This may lead to drug abuse and resultant consequences.

Anything that is in the early stages of utilization has its pros and cons. Likewise, e-pharmacies too. This is where caution is warranted. Any opportunity should be exercised and leveraged upon very carefully. Awareness of associated risks is quintessential. Even owners of the e-pharmacy and the intermediaries must be cautious and conscious in selling/delivering any drug/medicine to the consumer.