The Hindu Business Line : Internet pharmacies, major worry for drug cos: E&Y

YOU may increasingly find your e-mail inundated with offers to ship across impotency drug Viagra, for instance, at a low price! And while you may rid yourself of the unsolicited mail by hitting the delete button, pharma companies have a more serious problem on hand.

The global pharmaceutical industry sees Internet and mail-order pharmacies as being one of the biggest gaps to plug in its product supply chain in the next five years, according to Ernst & Young's Global Pharmaceutical Report 2005.

Hawking prescription drugs over the Internet is a problem that pharma companies are trying to deal with using internal operating procedures, product security controls and tracing technology, said Mr Utkarsh M. Palnitkar, Director with E&Y India Pvt Ltd.

Another big challenge to the global supply chain is spurious drugs, he said and added that deterrents need to be strengthened in India.

"Promise and peril describes the pharma industry, as it is today", he said. The fall-out of the global recall of Vioxx by Merck and the concern it triggered over the entire class of these products had sparked a debate on pharmaco-vigilance and drug safety.

The World Health Organisation predicts that 45 per cent of countries will report adverse drug reactions by 2007, compared to 38 per cent in 2003, he said.

Pharma companies are also battling with a bad image problem, with consumers demanding a line be drawn between profits and profiteering. Drug price transparency has become a key policy issue in many countries, the survey said.

While Indian pharma companies were partnering more with their global counterparts across the value chain, the dynamics of the Indian market seems to be attracting the attention of Japanese companies, he said.

"The age of internal sole research and development is over," he said and added that Indian companies too were scouting around for acquisitions in Europe.

Underlining the India advantage, he said that global companies were revisiting their India plans and putting in place scalable models. The pharma sector accounted for the highest foreign direct investment in the financial year 2004, amounting to Rs 1,571 crore.

And with the product patent regime in place, global pharma companies are planning for more proprietary products to be launched in India, he said.

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Internet pharmacies, major worry for drug cos: E&Y