Authorities probe dynamic pricing of medicines by e-pharmacies in Hyderabad

Regulators in Telangana have begun monitoring online medicine prices amid concerns that e-pharmacies may be using location-based algorithms to alter prices. Authorities are checking whether advertised discounts are genuine or if base prices are inflated before discounts are applied.

Hyderabad: Is your e-pharmacy platform fixing the price of your medicines depending on where you live in Hyderabad? While it may seem as if online customers are able to avail deep discounts when purchasing medicines from e-pharmacy websites, in reality, it may be part of a sophisticated ‘location-based’ algorithm pricing where customer’s location decides the price of the medicine.

While online medicine platforms aggressively offer ‘flat discounts’, the Price Monitoring and Resource Unit (PMRU), Telangana, in collaboration with National Pharmaceutical Pricing Authority (NPPA) and State Drug Control Administration, has launched an initiative to scrutinise whether these discounts are genuine or part of sophisticated price manipulation.

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Unlike traditional medical shops, e-pharmacies tend to frequently adjust prices based on user location, browsing history and real-time demand. Now, price regulatory teams of State Drug Control Administration (DCA) and NPPA have launched online monitoring to detect such trends.

The regulatory authorities are looking into the practice of ‘Dynamic Pricing Spikes’ to ascertain whether prices of essential, non-scheduled drugs are being hiked during peak hours or in high-demand zones within Hyderabad.

Following complaints made by traditional druggists and chemists from Hyderabad and other States under the banner of All India Organization of Chemists and Druggists (AIOCD), the NPPA has launched the initiative in almost all parts of the country. Reports suggest that authorities are specifically targeting online drug store platforms that make misleading claims, which is illegal under the Drugs (Prices Control) Order (DPCO).

“There have been instances where the e-pharmacies have inflated the base price i.e., more than the NPPA mandated MRP, and then applied a 15 per cent to 20 per cent discount. Customers who are purchasing online are under the impression that they have got a good deal. However, they are paying standard market rate,” senior doctors familiar with the issue said.

To regulate such practices, the NPPA has recently rolled-out Integrated Pharmaceutical Database Management System (IPDMS 2.0) that allows price monitoring units in States such as Telangana to track real-time transactions and monitor the actual price at which a drug is being sold against its MRP. The IPDMS essentially helps to flag instances where the same drug might be sold at different prices in areas like Gachibowli compared to Langar Houz, allowing regulatory authorities to ensure customers are not charged more than the ceiling price.

• Online e-pharmacies tend to adopt dynamic pricing spike algorithms
• Regulatory authorities have started to track online-sales from such platforms in real time
• To curtail practice of drug prices being hiked during peak hours/ in high-demand zones in Hyderabad
• Online tracking system launched to ensure discounts offered are genuine
• Regulation launched to control practices of location-based pricing of medicines
• Customers can download ‘Pharma Sahi Dam’ government app to check government fixed ceiling prices
• Online discounts are legitimate only if final price is less than the MRP printed on medicine strip