An amendment to the Medicines Thrift Act XCVIII of 2006, which came into effect in early 2022, has effectively eliminated what was fast becoming a booming market in the home delivery of over-the-counter (OTC) medicinal products and medical aids.
The repeated lockdowns and restrictions imposed to contain the spread of the pandemic caused the home delivery market to explode, enabling the delivery of meals, groceries, and OTC medicines at the click of a button. Pharmacies in Hungary had already begun investing huge amounts into online pharmacy, which extended to virtual consultancy regarding OTC medications and their subsequent rapid delivery via courier. Even the bigger food and restaurant delivery players were joining in on the pharmacy delivery market. Considering the limitations and fears caused by COVID-19, it was a fiercely competitive market that provided a remarkable level of comfort and ease for its customers.
Pre-pandemic research projected that the global ePharmacy Market would reach $177,794.9 million by 2026, up from $49,727.7 million in 2018. Such meteoric numbers are reflected in online orders for specifically OTC products in recent years, and the pandemic provided fertile ground for commercial couriers to take advantage of a huge market share for home delivery services. More locally, organisational changes in response to the first wave of the pandemic ranged from 20% of pharmacy chains in Central Europe establishing a platform for home delivery, and 27% establishing new pharmacy services (e-shop). These investments created solutions that were particularly useful to patients who were quarantined, self-isolating, or had to stay at home for safety reasons.
However, in 2021, the Hungarian Association of Pharmacies lobbied the Government to change the legislation for OTC delivery, arguing that it threatened the existence of small town and village pharmacies, particularly considering the significant costs connected to running a pharmaceutical e-shop and delivery service. The Association further argued that an open market for OTC delivery services could create demand issues in pharmacies in larger towns and cities.
The amendment, announced mid-December 2021, set forth that it is only professional pharmacists themselves, or their assistants, who may home deliver OTC medications. Considering the limitations of those professionals in terms of time and capacity, as well as the limitations in terms of geographical scope for delivery, this has effectively put an end to a highly lucrative market.
Many pharmacy chains and businesses in Hungary responded to the first pandemic wave by investing considerable amounts to introduce new pharmacy services practically overnight. These investments in ecommerce and home delivery services have effectively been made redundant without any hope for return, particularly considering the finality of the amendment.
By Milan Kohlrusz, Partner, Bittera Kohlrusz & Toth
