Revenge of the Luddites
Ibnsina Pharma has ended its standoff with the Pharmacists Syndicate, announcing yesterday that it would walk back its acquisition of 75% of 3elagi Tech, which owns digital pharmacy platform 3elagi. “Ibnsina Pharma is keen to maintain strong relations with pharmacists who are the focal point for the company and the reason for its success therefore we decided to cancel our intention to invest,” company chairman Mohsen Mahgoub said yesterday in a statement (pdf). The syndicate has responded in turn and has agreed to ask its members to end their boycott of the meds distributor. The syndicate will also drop a lawsuit against the EGX-listed business.
“Ibnsina Pharma is committed to digital transformation plans, with aims to increase operations efficiency for both the pharmacist and Ibnsina Pharma while realizing the economies of scale benefits for Ibnsina Pharma,” Co-CEO Omar Abdel Gawad said.
Making Michael Corleone proud: The Pharmacists Syndicate claims its campaign to block the acquisition is rooted in the Pharmacists Act of 1955 — which for those too young to remember was way before the internet. They claim that the act restricts public sales of meds to brick-and-mortar pharmacies (which must be owned by individual pharmacists) and hospitals — and any sale outside of that is illegal.
Ibnsina shares rose 6% in trading yesterday after the news was released early in the day.
WATCH THIS SPACE- This literal reading of the letter of the law could apply to all applications that try to sell or create marketplaces for meds, including Yodawy, a pharma industry insider tells us. As with taxi drivers when ride-hailing came on to the scene, the aim of entrenched interests is to not be “disrupted.”
So why pick on Ibnsina? Because Yodawy’s real market is helping insurance companies manage benefits, while Ibnsina is captive to the pharmacists who are the core customers of its distribution business. It will be interesting to see how they react when the 21st century eventually hits the sector.
There’s also the little matter of a pandemic: The irony isn’t lost upon us that healthcare professionals are actively punishing attempts at social distancing through online applications.