For Tushar, the reason to create Medlife where people could gain access to multiple healthcare services came from a personal experience where he had to walk up to 40 miles from his home to purchase medicines for his parents.
After realising the potential of technology intervention in the healthcare domain and the experience he gained while living abroad, Tushar who comes from a family of pharma entrepreneurs and was briefly involved in the family-run Alkem Laboratories, teamed up with Prashant Singh to launch Medlife in November 2014. The startup embarked on the journey with an initial investment of $15 Mn, later received a funding of $30 Mn from family capital and promoters.
The idea was simple: meeting the inadequacies in the healthcare delivery system through technological interventions. The epharmacy startup aims at providing a platform which would enable a consumer to gain access to healthcare services at all levels, starting from having all their clinic visits and prescriptions recorded and stored to buy medicines online and getting them delivered to their doorstep to e-consultation with doctors and scheduling diagnostic tests, thereby making it a one-stop platform for healthcare needs.
After being operational for almost four years, the startup is now processing over 8,000 deliveries a day (including private-label products) that amount to $4.6 Mn (INR 30 Cr) a month and expects 15-20% business growth month-on-month. The company further plans to close the current financial year with a revenue of $64.7 Mn (INR 425 Cr) and is targeting $138 Mn (INR 900 Cr) by the end of 2018-19.
Medlife started out in the e-pharmacy space following an inventory-led model and helping doctors digitally manage and store patient records. However, it gradually diversified to online doctor consultations, wellness products and laboratory services.
The startup now has a single consumer-facing mobile app to access its main services: it offers doctors the ability to create and store patient records online through the app.
Today, Medlife has a customer base of over 500K in India. The rapidly changing consumer behaviour towards Internet services in India is contributing to the boost that healthtech startups in the healthcare system and especially e-pharmacy based startups like Medlife are experiencing.
The global e-pharmacy market, led by North America and Europe, was approximately $29.3 Bn in 2014 and has been estimated to grow at a CAGR of 17.7% to reach a valuation of $128 Bn by 2023. This is a treasure trove that healthtech startups in India can capitalise on.
Secondly, according to a report published by FICCI, e-pharmacy platforms are expected to account for 5-15% of the total pharma sales in India, which would be largely achieved by enhancing adherence and access to the medicines for a large section of the underserved population. Moreover, the report also states that the healthcare industry in India is at an inflection point right now and is poised to grow up to $280 Bn by 2020, which is 10 times the growth since 2005.
In cognizance of the growth prospects and the challenges that mar the healthcare industry in India, what Medlife is doing is to maintain affordability, spread awareness and make health services accessible.
Recently, the startup also launched its generic drugs in keeping with the Government of India’s efforts to encourage the use of affordable generic drugs, instead of expensive brand-named alternatives.
What gives Medlife the edge for this money-run? It’s range of deliveries.
While Medlife is essentially an online pharmacy delivering healthcare solution such as medicines delivery and diagnostic services, it also provides a complete health package by integrating various other aspects of healthcare onto its platform thereby providing an entire healthcare ecosystem to the customer for timely diagnosis and effective treatment.
The app is easy to use and customers don’t have to go outside the platform for medical assistance unlike various other products available in the market. At the moment, Medlife has over 1,200 doctor clinics on the platform working for the ecommerce healthcare business in the health sector.
Along with Medlife, other e-pharmacy startups are also reaching out to the exponential growth. India has around hundreds of e-pharm startups in India which include the likes of 1mg, PharmEasy, Myra, Practo, etc.
The opportunity: The Indian healthcare IT market is worth $1 Bn (2014) and is pegged to grow at 1.5X by 2020. Healthcare software market comprises of only 9% of the total healthcare IT market in the country.
Startup Hub: Over 60% of healthtech-focussed startups incorporated since 2010.
Key Segments: Mobile apps, healthcare platforms and wellness analytics have gained maximum interests from the investors.
And in terms of funding, as per Inc42 DataLabs, the healthtech sector had witnessed over 111 deals in 2017, making it the second most funded segment of 2017. Not just in terms of the number of deals, healthtech startups raised over $333 Mn in funding in 2017, which is three times the amount they raised in 2016.
In light of the growth curve in the sector, not only is there a huge competition among epharmacy startups, but also virtual pharmacies are posing a grave threat to the non-virtual ones.
Online pharmacies are not only catering to a larger customer base due to the technology leverage that provides easier access to the services but they are also rolling out discounts and coupons to attract and broaden the customer base.
Another challenge was to win the first few customers, especially doctors, since there was skepticism about the security of patient data and using technical devices in general.
The company had also faced challenges with setting up the delivery of medicines within the legal framework but ultimately achieved compliance with all laws and regulations.
“Additionally we saw that a certain segment of the target audience was not comfortable placing orders online. To solve this, we launched call-to-order for them to simplify their experience with us,” Tushar speaks retrospectively.
But government initiatives are also attempting to mitigate the prevailing challenges.
Last year, due to the boom in e-pharmacy, the government issued a draft of the Drugs (Sale and Distribution) Rules 2017, aiming at removing ambiguity on regulations to facilitate sales of drugs online.
According to the draft rules, which came out in March this year, no one can operate an e-pharmacy without registering with the Central Licensing Authority and the supply of drugs by an e-pharmacy will be regulated.
Going forward, Medlife has plans to launch about 30 generic drugs and 40 OTC products by the next financial year. With a planned internal investment of $30 Mn to scale up operations, the company expects to earn a revenue of $138 Mn-$153 Mn (INR 900 Cr-1,000 Cr) by the financial year 2019.
Medlife will manufacture generic products through Alkem Laboratories and Tulip Lab, and aims to open its first store in Mumbai. Eventually, the firm will either eye wholesale drug suppliers in the south or target cities like Chennai, Bengaluru, New Delhi and Kolkata.
“We will also be launching our first ever diagnostic lab in Bengaluru to reach out to the masses in Tier I/II cities in India, with the direct and clear-cut approach of providing easily accessible high-quality diagnostics services at affordable prices,” Tushar confirms.
The growth demonstrated by Medlife and such online pharmacy startups is a clear testimony to India’s indulgence in digitised services.
Accenture analysis revealed that digitisation will be fueling almost one-third of the growth and an estimated 40% of the profitability in the pharmaceutical market by 2020. For businesses that are partially digitised, their models can drive improved profitability by as much as 27%.
The Indian pharmaceutical industry is at an interesting juncture today. Digitising pharmacy and other healthcare services is boosting the healthcare industry due to the wider reach of technology in different geographical locations in India.
Companies have started exploring and deploying cloud-based platforms, mobile applications and advanced data analytics tools to build leaner and more digitised healthcare organisations. It can be said with conviction that this market is set to grow further as India’s online presence increases. With over 460 Mn Internet users, India is the second largest online market, ranked only behind China. By 2021, there will be about 635.8 Mn Internet users in India.
With such a promising future for digitised healthcare in India and across the world, online pharmacy startups like Medlife will try to capitalise on the opportunities that the digitised industry holds. Considering the encouragement that e-pharmacy is receiving, startups will have a lot to gain from this wave.