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E-Pharmacy: Turning threats into opportunities
Introduction

The Indian pharmaceutical market (IPM) was valued at ~US$17 billion in FY18 and it is expected to reach
~US$20 billion by 2020. Offline pharmacies account for more than 95% of overall pharmaceutical sales in
India.
Bulk of the supply of medicine in India to patient happens through traditional offline pharmacy stores. (refer
to appendix A for pharma distribution flow). The current market size for e-pharmacy market operating in
India is estimated to be between US$ 0.14 billion to US$ 0.42 billion at present and expected to reach
US$2.7 billion by 2023. There are over 200 players in this market with few big players emerging as market
leaders. E-pharmacies are increasingly gaining acceptance due to an increase in the ageing population
base with a need for direct delivery of chronic therapy medicines, deeper internet penetration and higher
smartphone acceptance. They are exercising their scope for both forward integrations (lab diagnostics,
doctor consultations) and backward integrations (distribution).

Problem statement

Pharma sales are prescription driven. Doctors have been the focus for product promotions (see appendix
A) by pharmaceutical companies. In contrast, e-pharmacies add value for the end patient/customer by
making medicine available to them. The entrance of e-pharmacies has caused disruption in the traditional
pharma set-up.
Please note: According to the drug regulations in India, a company cannot promote a Schedule H/Schedule
H1/Schedule G/ Schedule X drug brands directly to consumer (patients). For example, you cannot promote
a GSK paracetamol to a patient, but you can cite the disease, and its prevention measures for educating
the patients.

Your deliverables

With disruption come opportunities and threats for pharma companies. Imagine that you are working as a
strategy manager for a multinational pharma company. In this context, please provide the marketing plan
(strategy, implementation) for tie-ups with e-pharmacies. You are expected to propose solutions with an
understanding of possible market changes in the future. The key deliverables also include how you would
measure the success of your ideas on-
1. Opportunities to leverage e-pharmacies for GSK Pharma brand recognition
2. Opportunities to leverage e-pharmacies to increase sales
3. Other ways to partner with E-pharmacies
Please note: Solutions presented should be within the scope of existing drug regulations.
You need to submit a 6-slider presentation (including introduction and references) in .ppt or .pptx format.

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Appendix A

Demand generation and demand fulfilment model for Traditional Pharma Companies
Demand generation model for traditional Pharma companies is done by product promotions to doctors.
The chemists are visited by the sales force for demand fulfilment activities. The availability of a product at
chemists plays a huge role in fulfilment of the prescription. Doctors are the main decision maker of the
pharma value chain. Around 80% of medicine sold by the retailers in India are prescription based.
The value chain for Pharma sales is
Pharma company CFA (Carrying and Forwarding Agents) – Stockist/Distributer – Chemist – Customer
(with prescription from a doctor)

Appendix B

Regulations on E-pharmacies (draft regulations dated 28th August 2018)

• Registration of online pharmacy to be made mandatory.
• E-pharmacy to be registered with CDSCO (Central Drugs Standard Control Organization).
• Only 1 license in any state needs to be obtained, it will be valid anywhere in India.
• Narcotic & Psychotropic drugs, tranquilizers and drugs specified in Schedule X are prohibited for
sale by e-pharmacy.
• E-pharmacy must comply with provision of Information Technology Act 2000 (21 of 2000) & rules
made thereunder.
• Premise of e-pharmacy shall be inspected every 2 years by a team of officers authorized either by
the central licensing authority or the concerned state licensing authority.

Appendix C

References:
Article/paper on e-pharmacies
https://www.expresspharma.in/cover-story/e-pharmacies-waging-a-battle-for-survival/407595/
https://www.ey.com/Publication/vwLUAssets/EY-e-pharma-delivering-healthier-outcomes/$File/EY-e-
pharma-delivering-healthier-outcomes.pdf
Regulations on e-pharmacies
https://www.manifestias.com/2019/01/29/draft-rules-on-e-pharmacy/