RIL Buys E- Pharmacy Startup Netmeds, AICOD Sends Letter Against Investment
On August 18th, Reliance Industries made a late night statement announcing its acquisition of major equity stakes in the pharmacy start-up Netmeds for a cash consideration of Rs 620 crore.
The decision is taken so as to set a foot in the e-commerce space. RIL lately has also been in talks to buy Milkbasket, Zivame and Urban Ladder in order to compete against e-commerce giants like Amazon and Flipkart.
Vitalic and its subsidies are collectively known as Netmeds. Incorporated in 2015, Netmeds is a licensed e-pharma portal that offers prescriptions, medicines and other health products in India. RIL announced that the investment represents 60% holding in Vitalic Health Pvt. Ltd. & 100% direct ownership of its subsidiaries.
After the announcement was made, the AICOD- All India Organization of Chemists and Druggists, which represents around 850,000 members across the country has written a letter to the RIL’s chairman and managing director Mukesh Ambani, against his decision regarding the investment in Netmeds.
According to AICOD, the online drug sales or e-pharmacy industry is still considered illegal as it is not recognized under the Drugs & Cosmetics Act under which the import, manufacture, sale and distribution is regulated. The ‘home delivery’ of medicines was only allowed due to Covid-19 only from the nearby stores.
Also, AICOD said that as an industry it is concerned that this acquisition may lead the industry in hands of the same fate as the telecom and retail industry. They mentioned in the letter that this move will not only threaten millions of livelihood of people but would also create a monopoly in the perfect competition market. It would also create a concentration of wealth, taking it from citizens and filling the RIL’s pocket further.
“We sincerely hope that you will rethink your move and save millions of our citizens from getting unemployed,” said AIOCD.
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, against which the action taken by RIL is said to be taken.