E-pharmacies ready to engage with Centre for regulation: Prashant Tondon of TATA1mg

Questions have been raised in recent weeks over the way online pharmacies operate and disburse medicines to consumers. Retail chemist and druggist organisations are up in arms against the online retailers, alleging that they follow unethical practices in drug disbursal.

Meanwhile, the Union health ministry is deliberating on steps to regulate e-pharmacies; a permanent ban is also being contemplated as an option. This is because some online pharmacies are accused of violating norms of the Drugs and Cosmetics Act, 1940, and breaching data privacy rules, a government source told Moneycontrol.

Speaking to Moneycontrol on the sidelines of entrepreneurship conference TiEcon Delhi, Prashant Tondon, Co-founder and CEO of TATA1mg, said his company was complying with the rules laid down in the Drugs and Cosmetics Act, 1940.

Tondon, who is also the Chairperson of the FICCI e-Pharmacy Working Group, said online pharmacies are open to the idea of new regulatory frameworks and would engage with the government on the same.

Edited excerpts:

Have you responded to the show cause notice from the DCGI? There were allegations of violations of the Drugs and Cosmetics Act…

We have responded to the letter from the Drug Controller General. We believe we are in good compliance (with the law). The order (on running online pharmacies) has been enforced since 2018, and we've been very compliant with the law.

The Centre is mulling reforms and regulation of e-pharmacies is also on cards. How do you view this ?

I think as players we have been seeking proactive positive enabling regulation, and there have been multiple stakeholder consultations. So, the process of engaging for positive enabling regulation has been underway. We'll continue engaging with the stakeholders of the ecosystem and make sure we continue to be compliant with all the prevailing laws. If the government needs to bring in new regulatory frameworks and requirements, we would be happy to work with them.

Also read: Prohibition on cards for online pharmacies, health ministry sets the ball rolling for regulation

You are also Chairperson of the FICCI e-Pharmacy Working Group. How do you see the operations of e-pharmacies amid the allegations of violations?

The Drugs and Cosmetics Act is very clear — dispensation (of drugs) has to happen through licensed premises. There have to be pharmacists, there has to be a prescription. All that is fairly clear. So, all the pharmacies that are operating in the network we work with have those compliances very much in place. And they always have been. We will continue to make sure that we operate our business in compliance with the requirements of the law.

Have you sought a meeting with the Health Ministry to discuss these issues?

The industry bodies are in touch, and we look forward to continuing the engagement. We will wait and engage as the government decides to speak.

It's being said that the government may also close down e-pharmacies. How do you see this?

I would not comment on that. I think it's too premature to have conversations in that regard. We haven't had direct conversations with regulators or the government on this, so I would not comment on media reports.

Also read: Tata1mg focusing on expansion in Tier 3 cities, working to reduce delivery time: CTO Gaurav Agarwal

One of the key concerns with online pharmacies is predatory pricing. How do you plan to tackle it?

Predatory pricing is an ecosystem concern. The government has taken note of it and set up this specific expert committee to deal with competitive pricing for digital markets. That’s a very accomplished group of people looking at what they need to do. I am fairly certain that they will come up with the right laws and all ecommerce ecosystems will probably benefit and certainly abide by that. I think if the government can define the right policy framework, the operating field, start-ups will always be very happy to comply.

You are also looking at offline retail stores for medicine disbursement. How far have things progressed?

We are doing our pilots. I think we've got some 50 stores live, and we'll continue to observe. We have to set up the right model; the consumer consumes digitally and the consumer also consumes physically.

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

With new regulations expected on e-pharmacies, is TATA1mg viewing physical retail as a future option?

I think it's too premature to pass any judgment on what is the future model or what is today's model. I think the model that will work is the model that consumers are happiest with at the end of the day. And we are building towards that.