Home HEALTH Regulations Needed in Online Drugs Business: CCI

Regulations Needed in Online Drugs Business: CCI

The Indian medical devices sector is playing a pivotal role in shaping the narrative of 'Make in India' on the global stage. The adoption of advanced medical technologies is enhancing the efficiency of healthcare delivery, ensuring that even remote areas have access to state-of-the-art diagnostic and treatment options

With consumer preference for online purchase of drugs increasing, the Competition Commission of India (CCI) called for enforcing necessary regulations for safeguarding patient privacy and protecting sensitive personal medical date, until the country legislates its data protection law.

In the latest report, the CCI said that online pharmacies should adopt self regulatory measures in the areas of collection, use sharing of data and privacy.  The CCI conducts market studies to better understand sectors, markets, or business practices through proactive engagement with stakeholders.


The CCI in its latest Market Study on the Pharmaceutical Sector noted that digital technology created new opportunities in health care. Digitalisation of healthcare infrastructure is expected to expand in the coming days, which would improve effectiveness of delivery and enhance supply chain efficiency. Though the share of e-pharmacy in the overall pharmaceutical retail market is low, the CCI notes that its growth has been noteworthy. “The pandemic has provided further impetus with over 8.8 million households having accessed the online pharmacy market during the COVID-19 lockdown period compared to 3.5 million in the pre-COVID-19 phase,” the CCI said.

Price and convenience are the two major factors driving consumer preference for online purchase of drugs. However, a major concern highlighted in the study is the thrust of substitution by online pharmacies not backed by prescription, patient data and prescription privacy and risks of self-medication.


In the study, the CII mentions that generic drugs played an important role in bringing down the price of medicines thereby reducing healthcare costs and improving access. After the expiry of potent protection, price competition from generic substitutes can generate significant cost savings for consumers. Apart from this, the study also showed a considerable price difference between brands of some particular generic formulation marketed by different firms. Notable variations in price were also observed between brands marketed by the same company. The study finds that market leaders even in the presence of a large number of firms and brands, charge prices that are relatively higher than other market participants, especially those with lower market share.

The CCI came up with e following measures to help in quality enhancement and price regulation in generic drugs

  1. A harmonised system of quality standard enforcement is an immediate imperative. The state level regulatory apparatus needs to be strengthened by equipping the regulators with adequate personnel having requisite knowledge and skill
  2. Set a state-of-the-art infrastructure including upgraded testing infrastructure and sufficient resources.
  3. A mechanism may be devised under the aegis of the CDSCO to create awareness on quality issues, build capacity and harmonise training and practices across the country
  4. A comprehensive online centralised drug data bank consolidating real-time data on active pharmaceutical manufacturing companies in the country needed. 5 The regulatory impetus on uniform and effective enforcement of quality standard needs to be complemented by measures to build public confidence in unbranded generic drugs

The CCI said that the sector contribute 43.2 per cent to the total out-of-pocket expenditure (OOPE) on health in the country. India ranks third and thirteenth globally in terms of volume and value respectively. From a turnover of Rs 1,750 crores in 1990, the drug industry’s turnover witnessed tremendous rise to Rs 2.89 lakh crores in 2019-20, of which exports accounted for half the turnover. Moreover, the study finds that the largest number of US FDA-approved facilities worldwide are in India, totalling about 665 in addition to 1,400 WHO GMP approved plants, and about 253 European Directorate of Quality Medicines -approved production plants.



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