An E-pharmacy or online pharmacy is an internet-based vendor that sells medicines. E-Pharmacy is one of the innovative progressions that will probably connect the gap between the services of retail pharmacies and mainly the end rural customers by giving simple and moderate access of medicines to the shopper at their doorstep just by the click of a finger.
The rural population of India is about 68.85 percent. The demand for E-pharmacy in the rural area increases mainly due to the rising number of people with unmet medical needs because of the large population. It is expected that the E-pharmacy could account for 5-15 percent of the total pharma sales in India, largely by enhancing adherence and access to medicines for a lot of under-served population. There are numerous other factors apart from the large population that influence the need for E-pharmacy in rural India.
The objective of this work is to identify the factors influencing E-pharmacy in rural India. A quantitative analysis of these factors is done using Data Envelopment Analysis(DEA) in order to understand the preparedness of various states in India with respect to E-pharmacy.
Keywords— E-pharmacy, Data Envelopment Analysis, Rural India
India is one of the rapidly developing nations that is home to over 1.1billion people, out of which 68.85 percent population live in rural areas. The retail pharmacy sector is the prime source of medicines for all patients. In most of the developing countries, private pharmacies are often seen as a source of inexpensive medical care; India is of no exception. But the idea of accessible and affordable medicines is as remote as their homes in rural area and an estimated 65 percent of Indian population even do not have access to healthcare.
Online marketing or digital marketing or internet marketing is a trend these days and most of the companies promote their business through digital platforms. Online purchase of medicine is gaining popularity worldwide due to its convenience. The Indian healthcare market is growing rapidly and was approximately USD27.57 billion in 2016 and is expected to reach USD55 billion by 2020. Online pharmacy sale is the new attractive format for business in pharmaceutical industry. Currently, around 60 online pharmacy startups have mushroomed over the past two years in India, but most of them have not reached the scale of other online vertical E-commerce. The convenience factor associated with E-pharmacy happens to be one of the determinants for attracting more consumers. The E-pharmacy is still in its nascent stage in India and it is still an unknown useful service to the rural people. E-Pharmacy is one of the innovative progressions that will probably connect the gap between the services of retail pharmacies and mainly the end rural customers by giving simple and moderate access of medicines to the shopper at their doorstep just by the click of a finger. The demand for E-pharmacy in the rural area increases mainly due to the rising number of people with unmet medical needs because of the large population. It is expected that the E-pharmacy could account for 5-15 percent of the total pharmacy sales in India, largely by enhancing adherence and access to medicines for a lot of under-served population. There are many other quantitative and qualitative factors that can enhance the E-pharmacy in rural India. The motivation of the paper is that the rural population do not have sufficient access to medicines due to the lack of retail pharmacies and need to venture out to adjacent towns to get to the pharmacies. Absence of a proper vehicle facility, long pausing and travel time and the cost associated with it influences the patient’s access to medicines. So once a proper E-pharmacy model is developed, it will be convenient because a patient need not hop from one pharmacy to another for a medicine and also the medicine will be provided at the doorstep.
The present work addresses the quantitative factors that directly affects the E-pharmacy. An analysis of these factors is done using DEA for 29 states of India with specific reference to E-pharmacy market in rural India. The data for four inputs and three outputs are used to estimate the efficiency of the states for E-pharmacy market in rural India. This paper consists of the following sections: Section II explains the factors affecting E-pharmacy for different states and the application of DEA methodology. Section III gives an analysis of various factors with respect to the efficient and inefficient states identified by DEA. The results are discussed in section IV along with the conclusion in section V.
The popularity of E-pharmacy is still very low in Saudi Arabia. But a survey conducted by the author shows that the respondents are ready to purchase medicines online once the FDA of the country sets regulations and monitor the procedures(Norah Anbanmy,2017). Due to the huge promotion of information technology by European Union, the online pharmaceutical market is gaining interest in Europe. The study by the author shows that legal online pharmacies will only benefit the consumers. Proper national regulations will not hinder the market from the online purchasing community (Mia, Paivi, Jari, 2005). In India, there is a lack of clear cut regulations and guidelines for the proper working of E-pharmacy. The authorities find it difficult to control, monitor and track the sale of medicines through internet. According to the review by the authors, the E-pharmacy model is a promising business but the drawbacks hurdle the success of the model. As of 2015, E-pharmacy is a dangerous trend in India, if not regulated(Priyanka, Ashok,2016). According to (Mohd. Ayub and M. Mustafa, 2017), online delivery of medicines is estimated at $10million at its nascent stage in India. With adoption of E-commerce, this industry will grow among Indian consumers and has emerged to be the greatest challenge for unorganized retail pharmacy in India. (Prabal and Alok, 2019) addresses the present scenario of E-pharmacy, the rules and regulations and the suggestions for improving the market among common people. Not much literature is available for E-pharmacy and the existing research articles presents the concern on the guidelines and regulations to be followed for the legalization of E-pharmacy in India.
The generalized form of output oriented DEA model is presented by (Ma Sheng-yun and Ma Zhan-xin, 2011) and the model has been used to evaluate the efficiency of energy consumption and GDP in China. (An Xun, Bao and Zhu, 2011) has studied the economic and social contribution of NOC(national oil company) using DEA model. The two stage NOC model- micro production and macro- contribution are studied using the model. The paper by (Bruno,2010) measured the efficiency of the district hospitals of Uganda using super- efficiency DEA model which solves the problems of standard DEA. (Gholam and Toloo, 2007) proposed an improved integrated DEA model to find the efficient DMUs. In this case, the DMUs are evaluated using the common values of weight and the formulation of LP is simplified. An application of DEA to evaluate how well the regions of Serbia utilize their resources is presented by (Milan and Gordana,2001). An output oriented CCR model is used and a study to combine DEA and LDA(linear discriminant analysis)is done. (Yan, Gongbing and Liang,2012) presents a model to find out the appropriate input and output variables for DEA model based on the concept of cash value added. This model has been used to evaluate 14 Chinese banks. The input-output variables can include both quantitative and qualitative factors, but the qualitative factors needs to be quantified. (Wade, Moshe and Lawrence, 1996) presents a framework to include the qualitative factors for DEA calculation. There are many research articles that addresses DEA and its different variants.
Factors Affecting E-pharmacy
The identified factors affecting the performance of E-pharmacy are:
a) Literacy rate
Education is a key factor that influences any business. Helping out the rural population to read and write in their own language will help in proper communication about the products. This will help the rural consumers to safely access E-pharmacy portals. Educated consumers will be able to identify the reliability of legal E-pharmacy. It also helps in protection of consumer rights, security and confidentiality of information exchanged and security of financial transactions. E-pharmacies provides value-added information to consumers, such as drug interactions, side effects, medicine reminders and information on cheaper substitutes. This power of knowledge enables the consumer in improving compliance. This will in turn increase the trust of rural population to online pharmacies. Literacy rate is taken as per the 2011 census of India.
Telephone density or Teledensity is the number of telephone connections for every hundred individuals living within an area. The source of data is Telecom Regulatory Authority of India.
c) Number of Patients
As per reports, chronic diseases (e.g., cardiovascular diseases, mental health disorders, diabetes, cancer, etc.) and injuries are the leading causes of death and disability in India. There is also widespread presence of some lifestyle disorders (e.g., pain, obesity, stress, diabetes, hypertension and some cancers, etc.). India is experiencing a rapid transition with the rising burden of chronic non-communicable diseases (NCDs) which currently accounts for around 60% of the total deaths. The number of inpatients in rural healthcare centers per thousand population is taken for calculation. The data is obtained from Rural Healthcare Statistics.
d) Length of surfaced roads
Delivery of desired drugs at desired place (at doorstep) is one of the important tasks of E-pharmacy. People living in remote villages are required to travel to nearby towns to access the healthcare services, thereby affecting patient compliance. The other major problem perceived by consumers is the delay in delivery of medicines. With a long way to travel and no proper road network, it is tough to transport temperature sensitive drugs such as insulin. With proper road networks in the rural area, the demand and supply of medicines will be met, which will also help in reducing the transportation costs, which will be acceptable to the rural community. The statistics of rural roads is collected from Basic Road Statistics of India. The ratio of length of surfaced roads in rural area to the length of total surfaced roads of the state is taken for calculation.
e) Number of medicine outlets
In addition, another major factor which directly impacts the access to medicines is the unavailability of retail pharmacy in rural areas forcing the consumers to travel long distances and visit multiple stores for procuring all the specified medicines. E-pharmacies enable access to rural areas where there is limited presence of retail pharmacy. The only available facility is the dispensaries. Also more the number of retail pharmacies available, more efficient will be the E-pharmacy model. The data for number of medicine outlets per thousand population is collected from Rural Healthcare Statistics.
f) Number of Medical staffs
Not only doctors, pharmacists too have a role in ethical dispensing of prescription medicines. The E-pharmacy model enhances the services of the pharmacist to the consumers. Routine questions about medications could be answered by online pharmacists using e-mail or other real-time chat options. An E-pharmacy should have a team of qualified pharmacists for validation of prescription and for handling any drug related queries from the patients. The data includes the total number of doctors, specialists and pharmacists available for thousand population in primary and community health centers. The source of data is Rural Healthcare Statistics.
g) Number of internet subscribers
The increased number of citizens using Internet fuel the gearing up of E- pharmacies. Numbers of internet users in rural India have been increasing continuously since 2000. This is the high time for the E-pharmacy model to grow with the drastically increasing netizens, smart phone users and patients. Under the Digital India initiative, the Internet and broadband services are being expanded to every remote corners of the country. The number of internet subscribers data is collected from Telecom Regulatory Authority of India.