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DigiHealth Technologies acquires B2B marketplace Pharmarack and market research firm AIOCD AWACS

DigiHealth Technologies, a subsidiary of a partnership firm owned by leading Indian pharmaceutical majors, has acquired market research firm AIOCD Pharmasofttech AWACS and B2B marketplace Pharmarack Technologies, as it aims to create the IT infrastructure and supply chain needed for pharmaceutical distribution.

DigiHealth is a wholly-owned subsidiary of ABCD Technologies, which will be renamed to IndoHealth Services, and has Indian pharma leaders Cipla, Dr. Reddy’s, Alkem Laboratories, Cadila Healthcare, Mankind Pharma, Lupin, Sun Pharma, and Torrent Pharma as investors, as revealed in a press statement.

ET reported on Wednesday that a consortium of pharma players including Sun Pharma, Cadila Healthcare, Lupin, and Torrent Pharma was in advanced stages of acquiring Pharmarack to develop their own digital-first distribution business. The report also stated that additional pharmaceutical companies could buy into the grouping.

“Both AWACS and Pharmarack have over the years created a digital ecosystem in the pharmaceutical industry downstream supply chain. The investment has been made to develop a world-class pharmaceutical supply chain and distribution IT ecosystem,” read the statement from DigiHealth on Friday.

DigiHealth added that it would be managed by an independent board and management and that both AWACS and Pharmarack had independent management teams with “strong governance protocols to ensure data privacy and neutrality”.

People aware of the deal stated that the important challenge for the grouping would be to ensure that the platform remains neutral to make pharma companies operating with it more comfortable. They added that the grouping was also planning to create its own online pharmacy at some point to compete with Reliance Industries, Tata, Amazon, and others.

India’s online pharmacy sector experienced a huge boost due to the Covid-19 pandemic, alluring large players such as RIL, Tata, Amazon, and Apollo Pharmacy. Experts and competitors stated that the pharma leaders saw this as a hurdle as online pharma retail players are rolling out their own private label brands that compete with products from pharmaceutical firms.

The consortium of pharmaceutical players is one of the first such groupings in the country where traditional manufacturers/brands have joined hands to take on big players in the fast-growing online space.

A person aware of the deals said that the pharma grouping had appointed KPMG to develop a plan on creating an online pharma distribution business and utilize the base of retailers that this firm works with to also start selling to consumers via an online pharmacy platform.

Pharmarack is considered to be working with 3,000-4,000 distributors and 100,000 retailers in the pharma space, providing services such as analytics, logistics, and supply chain financing. AWACS on the other hand is engaged in data collection and market research focused on data analytics, the statement added.

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