Even as India deliberates on the status of online pharmacies, startups such as 1MG Technologies and NetMeds say they are planning to take up an e-pharmacy licence if the government allows online sale of medicines.

A proposal is underway through a sub-committee under the Modi government which is likely to submit its report, this month.

Currently, online sale of medicines falls in a grey area as the Drug and Cosmetics Act of 1940 does not mention anything about sales of drugs through an internet channel. As a result, most online pharmacies in India operate on an aggregator model. They accept orders with scanned prescription images and pass on the order to the nearest retailer who does the delivery.

They take an average commission of 10 to 20 percent on the same. Margins in retail medicine business ranges between 8 and 33 percent. This huge margin band allows online pharmacies to give discounts to end users.

“Clarity of law is required in this space. In the US and UK, there are two different licenses one each for online and another for offline,” says Pradeep Dedha, CEO of Chennai-based NetMeds.

“We will apply for an online pharmacy license if the government comes out with it,” he adds. Earlier this week, All India Organisation of Chemists & Druggists – an apex body of about eight lakh members involved in sale & distribution of medicines, called for a nationwide strike on November 23 demanding action from the Centre against ‘illegal’ online sale of medicines.

The Food and Drug Administration, Maharashtra has in the past registered FIRs against online pharmacies for selling online medicines. E-pharmacies such as MeraPharmacy, mChemist, Pharmeasy and NetMeds have come under the FDA scanner in the past.

“We have proposed some suggestions to the government in this regard. There should be a separate registrar of e-pharmacies,” says Prashant Tandon, of 1mg Technologies, a Gurgaon-based marketplace for prescription and OTC medicines. 1mg Technologies asks for a doctor’s prescription before delivering an order to a customer.

As per law, even offline pharmacies should ask for prescription before supplying medicines to customers. However, the practice is rarely implemented offline. “There should be a level playing field between online and offline,” Tandon adds. The Sequoia Capital and Maverick Capital backed-startup raised Rs 100 crore in April 2016.

Source: moneycontrol