E-pharmacy Market By Drug class OTC Drugs, and Prescription Drugs
E-pharmacy refers to online platforms that provide pharmacy products to consumers at their doorstep. Consumers have to order their requirement by mobile application or website, and the online pharmacy company delivers their products at the given address. E-pharmacy is also called as internet pharmacy or mail-order pharmacy. E-pharmacy companies provide both over-the-counter (OTC) dugs and prescription drugs. For ordering prescription drugs, one has to upload its prescription online. Increasing internet penetration has supported growth of E-pharmacy market in the recent past and is expected to witness high growth in the near future. For instance, according to the data published by The World Bank, around 34.3% of total population were using internet in China in 2010 which has increased to 53.2% in 2016. E-pharmacy market in developed economies such as North America and Europe is well developed, however, the market in emerging economies such as India is at nascent stage, and growing rapidly.
Increasing investment by private players and initiatives taken by governments is expected to drive growth of the global e-pharmacy market
In 2017, Zur Rose AG, a Switzerland-based online pharmacy company, raised an amount of US$ 237 million to expand its business in Germany. Increasing investments by key players in the market to scale-up online pharmacy business is expected to fuel growth of global e-pharmacy market in the near future. Initiatives taken by government to improve online infrastructure, and provide high speed internet connection may also support growth of the market. For instance, in 2015, Indian government launched Digital India program with the motto ‘Power to Empower’. Under this program, government is working on digitalizing India by providing high-speed internet networks in rural areas. Such initiatives by Indian government is expected to positively affect the E-pharmacy market in the country and is expected to drive growth in the near future.
The global e-pharmacy market was valued at US$ 31.5 Bn in 2016 and is expected to witness a CAGR of 16.5% over the forecast period (2017–2025).
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Increasing penetration of online pharmacy due to lucrative strategies deployed by key players
Offers and discounts on E-pharmacy channel is a major factor attracting consumers towards it. For instance, as on April 2018, 1mg, an E-pharmacy company in India, is providing a discount of 12% on over-the-counter (OTC) drugs. Free home delivery, and free returns are other two important and attractive features of E-pharmacy channel. Thus, evolution of E-pharmacy channel has resulted in availability of products at every doorstep and also, at significantly lower price. Moreover, increasing internet penetration across the globe has expanded the customer base for these E-Pharmacy companies. For instance, according to data published by World Bank, only 12.58% of total population were using internet in 2012 in India, which has increased to 29.5% in 2016. The growth rate of internet coverage is similar in developing economies such as China, Brazil, and Mexico.
Selling of illegal drugs online is a major concern for regulatory bodies across the globe. Hence, various governments are working on formulating policies to regulate the E-pharmacy business. In U.S., Food and Drug Administration (FDA) has ruled that importing prescription drugs is illegal. All the online pharmacies that are supplying medication in the U.S. must be physically present in the U.S. Furthermore, all the online pharmacy companies need to be licensed at the state-level. However, it does not need require physical presence in state, it just needs to get licensed if it wants to deliver its products in a particular state. The Central Drugs Standard Control Organization (CDSCO), the regulator for pharmaceuticals and medical devices in India, and the health ministry are also working on framing some policies to encouraged online pharmacy companies to sell quality medicines.
E-pharmacy companies have gained significant market share in urban, however, these companies have not been able to effectively target rural areas. Low literacy rate, lack of internet facilities, weak supply channel, and lack of awareness about these channels are the prime reasons for this scenario. Moreover, rural population still accounts for significant share in total population. According to the World Bank data, about 2 in 3 people in India, and 2 in 5 in China lives in rural area in 2016. High percentage of population living in rural areas with low or no access to online pharmacy has inhibited the growth of E-pharmacy market.
Key players operating in the E-Pharmacy Market includes The Kroger Co., The Walgreen Company, Express Scripts Holding Company, CVS Health, Zur Rose Group AG, Giant Eagle, Inc., Walmart Stores, Inc., OptumRx Inc., 1mg, and Netmeds.
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