On 16 February, India’s e-pharmacy sector woke to an all too familiar feeling—existential dread. As many as twenty players in the space—including Tata 1mg, Netmeds, and PharmEasy—were on the receiving end of show cause notices from the government which questioned the legality of their operations.

This isn’t the first time India’s e-pharmacies have been in the government’s crosshairs. With the central government yet to enshrine laws that specifically regulate the sale of medicines online, these businesses have always existed in a regulatory grey area, vulnerable to disruption. In 2018, the Delhi and Madras High Courts went so far as ordering e-pharmacies to temporarily cease operations.

For PharmEasy, the biggest e-pharma player in the country, the latest threats of regulatory action couldn’t have come at a worse time. After acquiring a trio of companies—e-pharma rival Medlife, healthcare supply chain platform Aknamed, and diagnostics chain Thyrocare—the company began readying for a public listing. In August 2022, nine months on from filing its draft red herring prospectus (DRHP), API Holdings—PharmEasy’s parent company— shelved its plans to go public altogether.