ePharmacy Market - A New Healthcare Buzzword
The pharmaceutical industry which is known to be one of the fastest growing sectors with a global valuation of $1,587.05 Bn in 2022 is estimated to reach $2,067.35 Mn by 2028 owing to factors like rapidly growing and aging population, increased global burden of diseases, rise in healthcare awareness, among others. The pharmaceutical industry is embracing digitization in order to cope up with the rise in demand. Hence, the challenges faced by the traditional pharmacy model along with the widespread adoption of digitization has given rise to the concept of online or e-pharmacy.
ePharmacy is a term used to describe online pharmacies that sell medicines and health products on the internet and deliver them to customers. The concept of e-pharmacy is becoming quite famous among the customers in the light of the advantages it has to offer like cost savings, privacy and confidentiality, convenience and time saving, among many others. Also, in the wake of the COVID-19 pandemic; the demand for e-pharmacies has boomed due to reduced foot traffic in physical stores and the need for social distancing.
History of ePharmacy
The history of ePharmacy dates back to the late 1990s and resembles mail order of patent medicines. Later, Drugstore.com was launched in 1999 which was not the first online pharmacy, but it was the first to offer a secure service for consumers. So as to keep a check on the credibility of online pharmacies, the Verified Internet Pharmacy Practice Sites (VIPPS) program was set up by the National Association of Boards of Pharmacy (NABP) as a platform for registration of reputable online pharmacies. In 2003, Drugstore.com and many other major online pharmacy chains were granted VIPPS approval.
Drivers of ePharmacy
The ePharmacy market has experienced significant growth in recent years and is expected to continue growing in the coming years. The factors contributing to the growth are as follows-
Increased internet penetration across the world
The widespread use of internet along with the improved access to online services have been acting as a major driver in the growth of e-Pharmacy. This is evident by the fact that the number of prescriptions dispensed in the US in 2022 was around 6.7 billion. The Digital India is one such flagship programme in India which has contributed to the rapid and increased internet penetration in various parts of India.
Rise in Government Initiatives
The several public health-oriented initiatives set up by the Government of India (GoI) and the Ministry of Health and Family Welfare (MoHFW) so as to promote ePharmacy in India are expected to positively affect the ePharmacy market. Also, government initiatives are promoting ePharmacy growth by encouraging the adoption of electronic prescribing and through conduct of awareness programs. Many online players have also tied up with the government E-healthcare initiatives aiding government’s health insurance initiatives.
Outbreak of COVID-19 pandemic
The demand for online pharmacy services grew in the light of the pandemic owing to improved accessibility with the reduced risk of infections, increased convenience and time-saving option. Also, the restrictions imposed by many governments worldwide including lockdowns, travel bans and social distancing indirectly happened to favour the e-Pharmacy market. The pandemic also proved helpful in introducing the perks of e-pharmacy to a wider chunk of population which is evident by the responses received in a survey wherein almost 41% pharmacists admitted having started home delivery of prescriptions after the onset of the pandemic.
Challenges of ePharmacy
Stringent government regulations
The changing regulatory landscape is expected to shape the future of ePharmacy startups, and the need for increased accountability is necessary to safeguard people in the online pharmacy domain. A regulatory framework has been worked out by governments of many countries for proper registration and monitoring of such platforms over concerns of distribution of illegal or substandard medicines. These regulations aimed at regulating the epharmacy market possess the potential so as to dampen its growth. Also, regulators having no control over the e-pharmacy activities outside their national borders is proving to be a rising concern.
Rogue ePharmacies
Customer trust is hampered owing to the presence of large number of rogue ePharmacies in the market which is proving detrimental to the overall growth of e-Pharmacy. Also, the risk of buying products from fraudulent sites which may cause adverse health effects is prevalent. The flourishing of illegal rogue online pharmacies is a significant challenge for the industry which can hinder the growth of the market.
Challenges pertaining to logistics and delivery
Handling timely delivery of medications as well as handling returns proves to be challenging as medicines are perishable in nature. Also, specialised storage options required by some medicines can also add up to the cost and difficulty of operation. Even the quantity of medicines to be delivered may have to be regulated based on the regulations in the destination country. The incapability to cater to all regions can further limit its potential.
How is ePharmacy contributing to the growth of the healthcare industry?
The pharmaceutical market has been significantly impacted by the global pandemic, but it also stimulated the acceleration of the e-Pharmacy market which further boosted the integrality of pharmacy e-commerce in healthcare provisions. It provided a convenient and contactless option for patients for online order of medicines from the comfort of their homes proving helpful mostly for the geriatric population as well as for patients with chronic diseases. The capability of ePharmacies in low cost delivery of medical products came to the notice of the general public which further contributed to an increase of 38% in the ePharmacy market from 2019 to 2020. It also provides the added advantage for the customers of comparison of prices on different platforms.
On the other hand, sellers are benefitted by the reduction of working capital and overhead costs required for functioning of traditional pharmacy systems. The time for processing of a prescription is also reduced at the seller’s end.
The future of ePharmacy Market
The ePharmacy market is expected to play a significant role in the future of the healthcare industry. The COVID-19 pandemic has witnessed an upsurge in the strategic initiatives by many market players, and the market is expected to continue the momentum post-pandemic owing to the widespread adoption among consumers favoured by the convenience, affordability, and accessibility that these platforms have to offer. The growth for ePharmacy during the forecast period will typically augment due to the introduction of new players in the ePharmacy market coupled with increasing global competition. This might further affect the market share of the existing key players in this segment. In the coming future, the transformation of e-pharmacy platform from a convenience to a necessity is deemed to occur.