The world has been gripped by the beast of coronavirus and everyone has been made to refrain from human contact. Going to stores to purchase medicines and groceries have become no-gos for all. It has led to remarkable surge in use of online medicine delivery apps. This article examines the state of online Pharma industry before the global lockdown, the big bounce in the industry in recent times and factors driving the same.


Even before this pandemic pervaded our country, the online Pharma industry showed a very promising outlook. According to a report by EY in 2019, the Online Pharma industry stood at $360 Million market size and the combined market share of Online Pharma Companies was set to achieve $2.7 billion by 2023. Last year the total addressable market size was around $9.3 billion and is set to grow at a CAGR of 18.1% to reach $ 18.1 Billion by 2023. Besides Chronic disease medicines, they have made headway into acute diseases as well.

online pharma outlook in india

The growth of the Online Pharma Industry is also evidenced by the fact major players have secured large amount of venture capital funding and the intense price war competition between them. It is common to see rapid decline in cash among these companies because of the massive discounts offered the low margins in the value chain. There are several players in the market, all vying for greater market share and trying to gain a greater competitive advantage by scaling up their operations.


According to the EY report mentioned above, the main drivers of the growth of this market have been increase in internet and smartphone penetration. The ease of ordering medications online through e-commerce is a big plus and rise in per capita income and healthcare expenditure are also spurring the growth. Improvement in delivery logistics and collaboration with local pharmacies have also built on the already fast rising momentum. Aside from these, there’s also impetus by the government for E-health and digital literacy among the masses. This has led to greater adoption of Health and Pharma Ecommerce apps and gaining traction in tier 2 and 3 cities also.


The recent disease has, if anything accelerated the growth of the industry. The surge in demand for doorstep delivery of medicines and E-consultations has been absolutely unprecedented. E-pharma saw a growth of 50 to 60 percent, led by strong growth in Electronic consultations and a demand spike for prescription medicines. CEO of NetMeds, an online E-Pharmacy Co. has witnessed an upsurge of 1400% in Sanitation products and 500% in disinfectants alone during the last 2 weeks itself. The advent of the lockdown created a huge challenge for Indians to avoid contracting the virus and maintain one’s health and continuing the current medication.

In come online pharma facilities who stepped up in a moment of crises and ramped up their business model and garnered the resources needed to ensure continuity of operations. Pharma industries were no strangers to supply chain disruptions, having faced disasters like Kerala and Chennai floods, and hence were prepared to respond to a situation such as the lockdown that leaves businesses strapped for resources. The companies have got their delivery channels up and running and are delivering to several pin codes and expanding as well.

online pharma industry


Many players have shifted gears and reorganizing and reinventing themselves in face of the crisis and are thriving under adversity. Mumbai based- Medical Startup shifted gears after the outbreak, from medicine delivery to online doctor appointments. A predominantly B2B business between suppliers and pharmacies, it now offers a wide selection of wellness, fitness and beauty products and has also started a 24×7 service for doorstep delivery of medicines and health essentials, and also masks, gloves and sanitizers with a special focus on senior citizens. The startup is also planning to step in and improve the supply of COVID-19 test kits to hospitals and medical centers. The startup has plans to venture into Pune as well in the coming months.  

Popular apps and services have been forced to redesign and rebuild their operations, bringing essential services like grocery deliveries and medicines etc into the fold. Dunzo has partnered up Britannia, Marico, and Cipla to deliver medicines and groceries directly from the distribution centers or hubs of these companies to the customer’s doorstep.


Online medicine vendors, including market leaders 1mg, Medlife, NetMeds etc say they face shortage of delivery personnel because of the supply chain disruptions. 1mg has had to function with a slim workforce at around 50% due to restrictions on interstate and intercity movements of delivery executives. In case of MedLife, only 20-30% of their workforce is present and though orders have increased two fold, only half of the orders have been met on time. As such their operations, for the time being are limited to only major cities. Expansion plans will not come to fruition if delivery partners in non-metro cities do not resume operations.

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Though Authorities have extended assistance to ensure smooth flow of medicines and supply of critical and essential medical items, operations are being disrupted in major cities of the country. Both the customers and the Industry players have taken to twitter to air their concerns about the criticality of the supplies such as medicines for diabetes, hypertension and cardiac diseases.

Another thorn is the lack of legal clarity on the business of E-pharma. In December 2019, there was an order by Drugs Controller General of India asking drug regulators in States and UTs to prohibit sale of of drugs by E-Pharmacies till the government drafts rules to regulate these entities. Currently, E-pharmacies are operating without a drug license and their contention is that they do not require a license and are merely intermediaries that deliver prescription approved medicines and drugs from physical pharmacies. Yet it still is a grey area. The draft rules for E-prescriptions are also in the works by the government and must be formalized soon to confer E-pharmacies legitimacy.


In addition, supply of essential medicines to combat the pandemic could also be insufficient. Although E-Pharma companies have geared up to face the upsurge in demand, there is a definite chance of economics catching up to them i.e demand exceeding the supply. With smaller staff and working capital, recommended medicines like hydroxychloroquine, Vitamin C are out of stock. Stock shortage could also arise from Pharma distributors and manufacturers facing shortage of raw material or being unable to secure licenses for production of essential supplies. Also due to price caps on hand sanitizers like masks and sanitizers and unprofitable for suppliers to source and supply to the E-Pharmacies. Some E-Pharmacies like MyUphar are rationing critical medicine supplies as users have resorted to panic buying in bulk. 


E-Pharmacies are being recognized as essential intermediaries in the medical supplies industry and their growth has been accelerated by the pandemic. While digital literacy and rise in internet and smartphone penetration are working in their favour, the supply chain disruption is not. These Companies will have to contend with these issues until lockdown is eased and more nodes of the delivery channels are opened up.