What has happened?
On August 14th Amazon launched its online pharmacy in Bangalore, India. This announcement has stirred up fierce opposition from The All India Organization of Chemists & Druggists (AIOCD), who represent retail pharmacies and distributors. In a letter to Amazon CEO Jeff Bezos and Amit Agarwal, an Amazon executive based in India AIOCD stated, Amazon is operating an "illegal e-pharmacy"[1] and declared, "we will not give up. We will fight Amazon tooth and nail" [2] to see the end of Amazon Pharmacy.
What does this mean?
Amazon Pharmacy has begun taking orders for prescription-based medicines, traditional herbal medicines, and healthcare devices.[3] Amazon has seized upon demand for healthcare services in India after seeing over 2.5 million coronavirus cases.[4] An Amazon spokesperson stated, "it will help customers meet their essential needs while staying safe at home."[5]
With India's digital health market set to increase to US$ 4.5 billion in this financial year[6], Amazon has invested $6.5 billion into its India operations[7] hiring health experts and in 2018 securing ownership of the US-based home delivery medications start-up PillPack for $1billion.[8] As recently as January, Amazon Pharmacy was trademarked in the UK, Australia, and Canada.[9]
However, the 5 million owners and employees of offline pharmacies fear the impact of Amazon Pharmacy. Yash Aggarwal, legal head of South Chemists and Distributors Association in New Delhi, said, "Amazon's customer base is very high, so we are bound to lose business."[10] The Competition Act 2002 regulates business practices in India[11] by preventing anti-competitive agreements and abuse of dominant market positions. It is yet to be seen if an investigation will be launched by the Competition Commission of India (CCI) into Amazon Pharmacy, which is already offering a 20% discount on all orders. The CCI previously launched an investigation into Amazon and Flipkart after claims they were promoting some "preferred sellers" and, in turn, hurting business for other, smaller sellers.[12]
How does this impact the legal sector?
Contention surrounding the legality of Amazon Pharmacy originates from New Delhi's lack of regulations on online sales of medicine.[13] The laws that do exist are poorly defined as they were written when computers were less prevalent.[14]
AIOCD stated, the E-Pharmacies are illegal and not recognized by the laws under Drug & Cosmetic Act & Rules."[15] E-Pharmacies are not premises that have been licensed by the relevant authority; therefore, AIOCD argues their selling of prescription-drugs and medicines is illegal[16] and could lead to the sale of medicines without proper verification.[17] An exception to this rule was only made because of the unprecedented lockdown period.[18]
E-Pharmacies such as 1mg have argued they are needed in India and are regulated by a strong code of conduct.[19] Murali Neelakantan, former global general counsel of Cipla and Glenmark Pharmaceuticals, has argued that since Amazon is a marketplace, "there is nothing in the law that requires a marketplace to have a licence to facilitate the sale."[20]
The question remains, is Amazon Pharmacy and other E-Pharmacies illegal? Or is it time for India's laws Drug & Cosmetic Act & Rules to be adapted to current times?
Written by Venus Amon
Assessing firms:
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References:
[1] Peerzada Abrar, ‘Chemist body warns against Amazon’s entry into pharmacy space’, (Business Standard, August 15th 2020)
[2] Christina Farr, ‘Amazon faces resistance as it moves into online pharmacy space in India’, (CNBC, August 17th 2020)
[3] Manish Singh, ‘Amazon launches online pharmacy in India’, (TechCrunch, August 14th 2020)
[4] ‘Amazon launches online pharmacy in India’, (Time of India, August 14th 2020)
[5] Manish Singh, ‘Amazon launches online pharmacy in India’, (TechCrunch, August 14th 2020)
[6] India Brand Equity Foundation, ‘Amazon launches online pharmacy service’ (IBEF, August 14th 2020)
[7] Manish Singh, ‘Amazon launches online pharmacy in India’, (TechCrunch, August 14th 2020)
[8] BBC, ‘Amazon launches online pharmacy in India’, (BBC News, August 14th 2020)
[9] Ibid
[10] Pri Mandav, ‘Amazon launches online pharmacy in India’, (Pharmacy Business, August 14th 2020)
[11] Aditya Kalra, Aditi Shah, ‘India orders antitrust probe of Amazon, Walmart’s Flipkart’,(Reuters, January 13th 2020)
[12] Ibid
[13] Ibid
[14] Christina Farr, ‘Amazon faces resistance as it moves into online pharmacy space in India’ (CNBC, August 17th 2020
[15] Ibid
[16] Peerzada Abrar, ‘Chemist body warns against Amazon’s entry into pharmacy space’, (Business Standard, August 15th 2020)
[17] Leroy Leo, ‘Chemists body writes to Amazon’s Jeff Bezos, call India e-pharmacy launch ‘illegal’ ‘, (Livemint, August 14th 2020)
[18] Ibid
[19] ENS Economic Bureau, ‘Amazon India to pilot online pharmacy in Bengaluru ; chemist body says ‘illegal’ ‘, (The Indian Express, August 15th 2020)
[20] Ibid
Disclaimer: This article (and any information accessed through links in this article) is provided for information purposes only and does not constitute legal advice.