Chemist body opposes Reliance's acquisition of Netmeds: Here's why
Yesterday, Mukesh Ambani's Reliance Industries had announced the acquisition of online pharmacy Netmeds, along with its subsidiaries and parent company, to scale up its e-commerce play. Now, the All India Organization of Chemists and Druggists, representing over 850,000 chemists, resellers, distributors, has written to Ambani, PM Narendra Modi and Home Minister Amit Shah expressing its concerns over the deal. Here's why.
Investment in 'illegal industry'
In the letter, AIOCD noted it is "very disheartening" to see a company like Reliance invest in an industry that is still not legal under the Drugs & Cosmetics Act regulating the import, manufacturing, sale, and distribution of drugs. "We wonder how Reliance's shareholders will feel knowing that their favorite company has entered a business which is still not allowed," the organization emphasized.
Concerns over livelihood of people
The body further pointed out that Reliance's entry into this category will threaten the livelihood, employment of millions of people involved in offline medicine retail. "This move will not only threaten the livelihood," it added. "It will create a monopoly in a perfect competition market and create concentration of wealth while taking it away from our citizens and putting it in Reliance Industries' pocket."
Request to reconsider the decision
Citing these concerns and legality issues regarding the home delivery of medicines, the organization has asked the RIL's Chairman and MD to reconsider the deal to acquire Netmeds and barge into the e-pharmacy space. Notably, Jeff Bezos, the CEO of shopping giant Amazon, also received a similar letter from AIOCD after the Indian arm of the conglomerate launched an online pharmacy last week.
No word from Reliance on the matter
So far, neither Reliance Industries nor Amazon has commented on the matter. The companies are pushing e-pharmacies to establish themselves in the Indian e-health industry, which is estimated to grow at 68% every year and become a $16 billion opportunity in the next five years. Apart from Reliance and Amazon, Medlife and PharmEasy are also merging to grow their footprint in this space.
