By 2023, India’s online pharmacies will become a US$2.7 billion market according to the latest growth forecasts – highlighting a major market opportunity in the country’s healthcare sector.
“India is adapting to e-commerce rapidly, with mobile-first consumer behavior and improving digital payments infrastructure,” says Ankur Pahwa, who is a partner and national leader in e-commerce and consumer interest for Ernst & Young (EY), the firm which released the projections. “Online pharmacies, one of the verticals of e-commerce, are starting to gain momentum and have tremendous growth potential.”
Online pharmacies at present represent a US$360 million industry. According to Research and Markets (R&M), “traditional brick and mortar retail pharmacies are currently responsible for 99 percent of the pharmaceutical sales annually with online [pharmacies] contributing to only one percent of the total therapeutic sales.”
However, this positions e-pharmacies favourably for growth opportunities as R&M notes that India’s 850,000 pharmacy retail stores can satiate just sixty percent of demand. Already, the EY report estimates that the e-pharmacy sector’s addressable market size (this being the opportunity for revenue available to a sector) currently stands at US$9.3 billion. This is poised to swell to US$18.1 billion by 2023 – a compound annual growth rate of 18.1 percent.
EY’s report identifies India’s growing burden of noncommunicable diseases (NCDs) as one of the drivers of the e-pharmacy sector’s growth. The report suggests e-pharmacies could tap 85 percent of the market for medications related to chronic NCDs. Such conditions are responsible for 61 percent of deaths in India and are responsible for a significant portion of the country’s out-of-pocket expenditure on health. Indeed, R&M notes that “the Indian e-pharmacy market growth is fuelled by the rise in the number of Indian population suffering from chronic clinical indications like diabetes, hypertension, asthma, and obesity.”
That online pharmacies are stepping in to fill the void is no surprise as e-health emerges as big business in India. There is no shortage of start-ups innovating in the field of digital health. Innovations such as artificial intelligence (AI) and telemedicine are emerging as ways to bridge the gap between the absence of many key healthcare services and the considerable demand for them – especially in rural areas where shortages are most pronounced.
This does not mean that e-health is free from controversy – including e-pharmacies. Online sales of medicines were actually banned last year by the Madras High Court following on from concerns expressed by petitioners that e-pharmacies are not subject to appropriate regulation. This ban – already temporary – was walked back in January following an appeal by e-pharmacy firms, alleviating firms’ fears of losses to the tune of hundreds of crores of rupees.
While e-pharmacies do have a valuable role to play in the healthcare sector, ensuring proper regulation is of great importance – especially given the gargantuan nature of growth expectations. At a time of rising antibiotic resistance, inappropriate use of medications must be stymied – be they prescribed in the doctor’s office or availed online.