Chemists' body writes to Mukesh Ambani against RIL's investment in Netmeds

All India Organisation of Chemists and Druggists (AIOCD), which represents more than 850,000 members across the country, has written a letter to Mukesh Ambani, chairman and managing director of Reliance Industries Limited (RIL), against the company’s acquisition of majority stake in online pharmacy firm Netmeds.
 

The letter has also been addressed to Prime Minister Narendra Modi, Union Home Minister Amit Shah, Commerce and Industry Minister Piyush Goyal and other top ministers and government officials.
 

AIOCD said it is “very disheartening” to see that a company of Reliance Industries’ stature, has invested in an industry which is still illegal. It said this industry is not recognised under the Drugs & Cosmetics Act under which the import, manufacture, sale and distribution of drugs is regulated.
 

“We wonder how Reliance’s shareholders will feel knowing that their favourite company has entered a business which is still not allowed under the laws,” said AIOCD in the letter. “Mukesh Ji (Ambani) it is pertinent to mention here that this move will not only threaten the livelihood of millions of our citizens, (but) it will create a monopoly in a perfect competition market and of course create a concentration of wealth while taking it away from our citizens and putting it in Reliance Industries’ pocket,” AIOCD said.
 

"This move (Reliance Venture acquisition of Netmeds) will not only threaten the livelihood of millions of our citizens, it will create a monopoly in a perfect competition market and of course create concentration of wealth while taking it away from our citizens and putting it in Reliance Industries’ pocket" said in the letter.
 

AIOCD said as an industry and trade association, it is concerned for its people that they may face a similar fate which others in other industries like telecom and retail have faced.
 

“We sincerely hope that you will rethink your move and save millions of our citizens from getting unemployed,” said AIOCD.
 

RIL on Wednesday said that it has acquired a majority equity stake in Chennai-based Netmeds (Vitalic Health Pvt. Ltd) for a cash consideration of approximately Rs 620 crore. This investment represents 60 per cent holding in the equity share capital of Vitalic and 100 per cent direct equity ownership of its subsidiaries - Tresara Health Private Limited, Netmeds Market Place Limited and Dadha Pharma Distribution Pvt. Limited.
 

AIOCD told Reliance that one of its member associations had filed a case against Union of India for misusing the "Aarogya Setu application" for illegal promotion of e-pharmacies. During the case proceedings in the High Court of Delhi, it was submitted on a sworn affidavit by the Joint Drugs Controller of India that the issue relating to the online sale of drugs is presently under the consideration of the Government.  Also, with respect to the query relating with whether e-pharmacy services being provided on web link of “Aarogaya Setu Mitra” are registered or licensed e-pharmacies, it is submitted that at present there is no provision under the Drugs and Cosmetics Act, 1940 and Drugs and Cosmetics Rules, 1945 for online pharmacies.

Apart from this, AIOCD said  ‘home delivery’ of medicines was never allowed under the Drugs & Cosmetics Rules. Recently due to the Covid-19 situation, the Ministry of Health & Family Welfare came out with a notification allowing ‘door delivery’ of medicines, only by neighbourhood shops.
 

Last week, AIOCD wrote a similar letter to Amazon CEO and founder Jeff Bezos against the e-commerce giant’s entry into the online pharmacy segment in India. AIOCD had told Amazon that it is amply clear that ‘home delivery’ cannot be undertaken by any online pharmacy and entities doing so are already facing contempt of court proceedings under the laws of India.
 

Experts said companies such as Reliance and Amazon are eyeing the Indian e-health sector. This sector is expected to become a $16 billion opportunity by FY 2025, growing from $1.2 billion, at a compound annual growth rate of 68 per cent, according to a report by research firm RedSeer Consulting. To tap this market, e-health companies Medlife and PharmEasy have agreed for a merger, according to the filings submitted by the companies to the Competition Commission of India (CCI).

The aim is to create one of the largest healthcare companies and the valuation of the combined entity is expected to be over $1 billion, according to the sources.

AIOCD is an association of about 8,50,000 medicines resellers including Retail chemists and pharmaceutical distributors.