As we witness, India’s pharmaceutical landscape is undergoing a profound transformation, driven by technological advancements and shifting consumer preferences. The traditional brick-and-mortar retail pharmacy, a familiar fixture in every neighborhood, now faces a formidable challenger: the burgeoning online pharmacy sector. This evolving scenario is not merely a commercial rivalry but a complex interplay of accessibility, economics, regulatory lacunae, and deep-seated concerns over public health, frequently drawing the ire of established chemist bodies.
The Evolving Scenario: A Digital Shift:
For decades, the retail pharmacy has been the cornerstone of medicine dispensing in India. Its strengths lie in immediate access for acute needs, personalized advice from local chemists, and the trust built through long-standing community relationships. However, this largely unorganized sector, comprising millions of fragmented outlets, often grapples with wafer-thin margins and the pressures of price control.
Enter the online pharmacy, a disruptor propelled by India’s soaring internet penetration and smartphone adoption. E-pharmacies offer unparalleled convenience, allowing consumers to order medicines from the comfort of their homes and receive doorstep delivery, a service that proved indispensable during the COVID-19 pandemic. They often entice customers with deep discounts, a wider range of medicines (including those hard to find locally), and value-added services like e-consultations and diagnostic bookings. The sector has witnessed remarkable growth, with projections indicating it will capture a significant share of the overall pharmaceutical market. Major players like Tata 1mg, PharmEasy, Netmeds (backed by Reliance Retail), Apollo Pharmacy (with its Apollo 24×7 platform), Amazon Pharmacy, and Flipkart Health+ have rapidly expanded their reach, with Amazon Pharmacy recently announcing shipments to every functional pin code in the nation, including remote areas. This reach is particularly beneficial for those in rural or underserved regions with limited access to physical drugstores.
Beyond mere delivery, online platforms excel in digital record-keeping, which can enhance traceability and potentially reduce the circulation of counterfeit drugs if properly regulated. They also foster a growing demand for over-the-counter (OTC) products and wellness supplements, aligning with a national shift towards preventive healthcare.
AIOCD’s Ardent Objections:
The rapid ascent of online pharmacies has not been without significant resistance, primarily from the AIOCD, the powerful representative body for retail chemists. Their objections stem from a fundamental concern for patient safety and the perceived existential threat to traditional businesses.
The AIOCD consistently argues that online pharmacies operate in a legal gray area. They highlight that the existing Drugs and Cosmetics Act, 1940, and its Rules, 1945, do not specifically govern online drug sales. The permission for doorstep delivery granted in March 2020 was a temporary measure for the pandemic, which the AIOCD claims is now being “misused by online platforms” and should be revoked. In April 2025, the Drugs Technical Advisory Board (DTAB) was reportedly set to review the continuation of home medicine delivery following AIOCD’s strong objections.
Some of the reported AIOCD concerns include:
- Lack of Prescription Validation: A central worry is the potential for medicines, especially Schedule H and X drugs (requiring strict prescription), to be dispensed without proper verification, leading to self-medication, drug addiction, and misuse.
- Quality and Authenticity: Fears abound regarding the sale of fake, expired, or unlicensed products, with traditional chemists arguing that rapid delivery models, such as Swiggy-PharmEasy’s proposed 10-minute delivery, could compromise quality control and thorough checks.
- Data Privacy: The handling of sensitive patient health data by online platforms raises significant privacy concerns.
- Unfair Competition: Deep discounting by e-pharmacies is seen as an unfair trade practice, creating an uneven playing field and severely impacting the livelihoods of millions of traditional chemists.
- Regulatory Loophole: The AIOCD contends that online pharmacies are circumventing established laws that mandate physical licensed premises for drug distribution. Their recent opposition to RailTel Corporation’s proposal to invite bids from online pharmacies for home delivery to railway hospitals underscores their stance that online pharmacies remain illegal in India.
The Regulatory Landscape: A Work in Progress:
The legal status of online pharmacies in India remains ambiguous, leading to frequent legal tussles. While the Drugs and Cosmetics Act and Rules vaguely apply, a dedicated framework is conspicuously absent.
In August 2018, the Union Health Ministry published Draft Rules for the “sale of drugs by e-pharmacy” to amend the Drugs and Cosmetics Rules, 1945. As my knowledge goes, these draft rules, though yet to be finalized and notified, proposed significant provisions:
- Mandatory Registration: E-pharmacies would require registration with the Central Drugs Standard Control Organization (CDSCO) and pay a fee.
- Periodic Inspection: Premises would be inspected every two years.
- Data Localization: Patient data would need to be stored in India and kept confidential.
- Prohibition of Advertising: E-pharmacies would be barred from advertising drugs.
- Customer Support and Grievance Redressal: Mandatory 24/7 customer support with a registered pharmacist for queries.
- Prohibition of Schedule X Drugs: Sale of tranquilizers, psychotropic drugs, narcotics, and habit-forming drugs would be prohibited.
Despite these drafts, finalization seems to have been repeatedly delayed due to stakeholder objections and legal challenges. Various High Courts, including the Delhi High Court, have intervened, urging the government to expedite the policy formulation. The CDSCO has also issued show-cause notices to several online firms for alleged violations.
Simultaneously, government initiatives like Digital India, Ayushman Bharat, and the National Digital Health Mission (NDHM) are actively promoting digital healthcare solutions, indirectly fueling the growth of e-pharmacies by fostering a more digitally savvy healthcare ecosystem. This creates a dichotomy: a push for digital adoption on one hand, and a lack of clear regulation on the other.
The Way Forward: Coexistence and Comprehensive Governance:
In my view, the path ahead for India’s pharmacy sector demands a nuanced approach that acknowledges the benefits of digital innovation while robustly safeguarding public health and ensuring fair competition, such as.
- Expeditious Finalization of E-Pharmacy Regulations: The most critical step is the immediate finalization and notification of a comprehensive regulatory framework. This framework must clearly define the operational guidelines for online pharmacies, including stringent norms for prescription verification, drug storage, logistics, data security, and accountability. It should also establish a clear distinction between aggregator models and inventory-based models.
- Addressing Safety and Quality Concerns: Regulations must incorporate mechanisms to prevent the sale of spurious or expired drugs online. This could involve mandating blockchain technology for drug authenticity tracking, stricter penalties for non-compliance, and transparent track-and-trace systems for all online dispensed medicines. The concerns regarding “10-minute deliveries” need specific guidelines to ensure patient safety is not compromised for speed.
- Leveling the Playing Field: While online pharmacies offer discounts, a balanced approach is needed. Regulations could explore ways to mitigate predatory pricing practices that disproportionately harm traditional chemists, perhaps through floor prices for certain drug categories or by promoting fair trade practices.
- Promoting Omnichannel Healthcare: The future likely lies in a hybrid model. Many e-pharmacies are now opening physical stores, while traditional chains like Apollo have embraced online platforms. This omnichannel strategy allows businesses to combine the convenience of online services with the trust and immediate access of physical outlets, creating a more holistic patient experience.
- Leveraging Technology for All: Technology should not be exclusive to online players. Initiatives to digitize retail pharmacies, provide them with better inventory management systems, and integrate them into national digital health ecosystems can empower them to compete effectively and serve their communities better.
- Public Awareness and Education: Educating consumers about the risks and benefits of both online and offline channels is vital. Campaigns should highlight the importance of valid prescriptions, verifying drug authenticity, and understanding return policies.
Conclusion:
The online versus retail pharmacy debate in India is a microcosm of a larger digital transformation. The evolving scenario demands a regulatory compass that navigates the complexities of innovation, competition, and public welfare. Only through a well-defined, robust, and adaptable regulatory framework can India truly harness the potential of digital healthcare, ensuring that accessibility, affordability, crucially and patient safety are not compromised in the race to the digital frontier. The coexistence of both online and retail models, operating under a clear and equitable legal regime, will ultimately best serve the diverse healthcare needs of the Indian populace.
By: Tapan J. Ray
Disclaimer: The views/opinions expressed in this article are entirely my own, written in my individual and personal capacity. I do not represent any other person or organization for this opinion.