The
global market for ePharmacies is forecast to reach $51.75 billion by the year
2017, according to Global Industry Analysts.
The
market for ePharmacies is driven by the increasing number of Internet savvy
people as well as the growing demand for prescription drugs. ePharmacies
complying with required regulatory standards and ethical business practices are
likely to emerge as a safe, accessible, and affordable source of prescription
medicines in the coming years.
Although
the industry has shown substantial growth in the past few years, the potential
of this market remains to be fully realized.
The
Internet is one of the breakthrough technological developments of the 20th
century, and presently forms a part of people’s daily life all over the world.
It facilitates in conducting business operations, such as sales of all kinds of
products, including medication.
Electronic
pharmacies (ePharmacies) sell medications over the Internet. The total revenue
generated by the ePharmacy industry worldwide is estimated to be in several
billion dollars. However, the present market scenario reflects higher
penetration in developed countries, as compared to the less developed markets.
The
boundless nature of the Internet also presents several challenges, as the
global ePharmacy industry is not governed by all-encompassing infallible
regulatory guidelines. Consequently, the market also comprises several rogue
ePharmacies that do not comply with the necessary safety and regulatory
guidelines thereby causing a number of discrepancies.
They
represent a potential threat to patient safety and thus present several
regulatory challenges.
The
developed markets of US, Europe, and Canada together account for a lion’s share
of the global ePharmacies market, as stated by the new market research report
on ePharmacies. The US represents the largest regional market.
Europe
represents the second largest as well as fastest growing market for drug sales
through ePharmacies growing at a compounded annual rate of more than 20% over
the analysis period.
Feasibility
of an electronic pharmacy is largely determined by its expanse, which enables
co-ordination with large chain pharmacies and drug manufacturers, as well as in
inventory optimization.
Large
chains facilitate growth, and provide a cost advantage to electronic
pharmacies. Specialization in a particular market segment, such as cancer or
diabetes, represents another feasible approach to capture the market, although
to a great extent, the benefits would possibly be counterbalanced by the cost
incurred in providing doorstep delivery.
However,
considering the low weight of pharmaceutical products, doorstep delivery
through mail delivery or parcel delivery services represents a convenient and
ideal alternative. On the positive side, customers benefit from delivery of the
product at the doorstep, which adds to the ePharmacy’s capability in providing
efficient customer service.
Electronic
pharmacies, associated with a conventional brick and mortar pharmacy, are
likely to be more successful in comparison to standalone ePharmacies.
ePharmacies, however, need to develop a system for managing insurance
co-payments.
Pharmacies
with an e-Commerce business model enable customers in availing improved
services in terms of quality of care, convenience, and low priced drugs,
particularly to those residing in remote locations and those who are homebound
either due to a disease or aging.
ePharmacies
are playing a significant role in the prescription drugs market, given the
pricing advantage as well as the ease of ordering and obtaining a drug without
having to visit a pharmacy store.
Despite
the fact that ePharmacies represent a convenient way of purchasing drugs and
availing cost benefits as well, the parallel emergence of fake or illegal
ePharmacies presents a major challenge given the potential risk associated with
buying drugs from unlicensed pharmacies.
Proliferation
of illegal ePharmacies has raised questions on the reliability of this medium
of drug purchase, which is expected to be the reason for its variable market
penetration. Issues facing the ePharmacy industry include parallel emergence of
rogue ePharmacies, Re-importation or parallel trade of drugs, rising drug abuse
due to easy accessibility of prescription drugs, and other potential risks
associated with this medium of drug sales.
The
emergence of fake Internet pharmacies has resulted in ePharmacies being looked
upon by pharmaceutical companies as a medium utilized by counterfeiters,
promoting unauthorized sale and import of drugs. Nearly 50 percent of the
world’s ePharmacies operate in the US, which has raised several issues
pertaining to their impact on the brand value of a drug.
ePharmacies
have promoted parallel trade, thereby considerably weakening the US market for
branded drugs, as well as generic drugs to a certain extent. This could be attributed
to their availability at prices lower than the market price in the US, from
ePharmacies operating low-cost markets outside the US.
Adopting
measures, such as curbing the supply of drugs to ePharmacies, taken by US
manufacturers has resulted in ePharmacies obtaining much cheaper generic
versions from eastern European countries.
Some
manufacturers have also implemented an increase in drug prices in low-cost
markets, to cut down the profit margin of ePharmacies.
By
Telecomlead.com Team
editor@telecomlead.com
