Small retailers, wholesalers are up in arms against pricing, discounts of online pharmacies: Here's why

Consumers are “apprehensive about exposure” while venturing outside for medicines and lab results and prefer online options. (Representative image: Reuters)

Small chemist retailers and wholesalers have told the Union government that they would go for a country-wide agitation if the government fails to rein in the predatory pricing and indiscriminate discounts being offered by online pharmacies.

A delegation of the All India Organisation of Chemists and Druggists (AIOCD) met Dr. V.K. Paul, Member, NITI Aayog, and requested action against the indiscriminate discounts being offered by corporate retail chains and online pharmacies.

The top AIOCD officials have complained to the government of open violation of the Drug Acts, Pharmacy Act, and medical practices ethics by online pharmacies, which was impacting small retailers, and wholesalers, across the country.

The delegation submitted a detailed memorandum with proof in the form of advertisements in the public domain of discount offers to the extent of below purchase price.

Huge discounts put retailers in trouble

The National Pharmaceutical Pricing Authority (NPPA), which regulates the prices of drugs, has fixed the trade margin at 16 percent on scheduled drugs and 20 percent for non-scheduled drugs for retailers.

According to Rajiv Singhal, e-pharmacies and corporate retail chains selling medicines online are offering whopping discounts ranging between 30 percent and 40 percent through advertisements.

“The general industry practice has been to fix a margin of 8 percent for wholesalers and 16 percent for retailers for the drugs under the Drug Price Control Order (2013) and 10 percent for wholesalers and 20 percent for retailers. Thus, it is not at all possible for small chemist shops to compete against such discounts,” he said.

Violation of Drugs & Cosmetics Act, 1940

The chemists’ association has alleged that selling medicines via online mode for home delivery was in complete violation of the Drugs & Cosmetics Act, of 1940, which states that for prescription medicines a prescription “in original” is required.

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Prior to AIOCD, the Confederation of All India Traders (CAIT) had written to Commerce Minister Piyush Goyal and Health Minister Dr. Mansukh Mandaviya for their urgent intervention in prohibiting e-pharmacies from selling drugs in India, and to be in compliance with the provisions of Drugs and Cosmetics Act and Rules (DC Act and Rules).

“To prevent intermediaries from getting into creative agreements and operate marketplace e-pharmacy platforms, we have also requested the government to ensure that no person should be allowed to establish a web portal to act as an intermediary between the e-pharmacy entity and consumer,” CAIT said.

Will DCGI act?

Moneycontrol reached out to Montu Patel, President, the Pharmacy Council of India, the apex body of pharmacies in the country, for his reactions. Patel slammed online pharmacy companies saying they violated the norms established by the government.

“The practice of selling medicines online is wrong. These online pharmacies threaten the existence of retailers,” he added.

Patel said that not even developed countries have a system of online pharmacies, adding that both the state and central drug controller need to formulate a strategy to check this unfair trade practice.

The Drug Controller General of India, VG Somani, did not answer the queries sent by Moneycontrol.

The online pharmacies didn't respond to the queries.