Prime Pills: Amazon launches online pharmacy in India

September 14, 2020

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2 min read

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What's going on here?

Expanding its reach across the global marketplace, Amazon has launched an online pharmacy in Bangalore, India.

What does this mean?

This new service provided by Amazon Pharmacy allows consumers in Bangalore to order and purchase prescriptions, over-the-counter medicines, traditional herbal medicines and even health devices for delivery.

Amazon’s venture into pharmaceuticals may at first seem surprising. However, back in 2018 Amazon acquired the online US pharmacy PillPack for $1bn, which now represents the first step in Amazon’s attack on the pharmaceutical market. 

There are huge opportunities for growth for Amazon in India. Research firm Frost & Sullivan predicted in 2019 that the Indian pharmaceutical industry alone would increase from $29.6 billion in revenues in 2017 to $55 billion in 2020. Whilst this projection could not have anticipated the shift away from in-person care as triggered by the Covid-19 pandemic, there is the potential for this $55 billion prediction to be exceeded through the increased demand for medical products and ease of online accessibility. A point emphasised by an Amazon spokesperson in stating that online access “will help customers meet their essential needs while staying safe at home.” Essentially, with more people now seeking online care for medical purposes, such online developments are likely to help as opposed to hinder the pharmaceutical industry. 

What's the big picture effect?

Although there are various prospects available for Amazon and benefits attached to the online availability of medicinal products, the question remains whether this move is a step in the right direction. Whilst certainly a profitable area, this move in India has been met with significant controversy. The All India Organization of Chemists & Druggists (AIOCD), who represent retail pharmacies and distributors in the country, are largely hostile to Amazon’s movement into the pharmaceutical market. In a letter dated 14 August 2020, it was stated that: “E-Pharmacies are illegal and not recognized” by certain laws. They also highlighted the realities that “this space has been marred by extreme controversies, court cases and legal issues in the last few years” due to the overall lack of clear regulations available to guide those seeking to establish online pharmacies. Reinforcing this viewpoint outside of the Organisation, leading Indian academic Chetna Desai has recognised that the “laws for E-commerce are ill-defined and subject to varied interpretations,” due to the fact they were “written when use of computers and the internet was not as prevalent as it is now.” 

Overall, the market conditions brought about by Covid-19 may work in Amazon’s favour and also enable customers to stay safe by ordering medicines without a visit to the pharmacy. However, there are two key points to be aware of. Firstly, there needs to be clarification in Indian law as to the appropriate approach towards regulating online pharmacies. Secondly, clarification is required on whether to permit Amazon’s development in Bangalore. With the AIOCD prepared to “fight (Amazon) tooth and nail” all the way to India’s Supreme Court, the search for clarity has essentially set the medical community and Amazon on a collision course.

Report written by Karolina Smolicz

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