Isaac Valdivieso
Director General
Farmacia San Pablo
View from the Top

Pharmacy Chains Quickly to Keep Up With Changes

Wed, 09/05/2018 - 15:31

Q: What are the main trends that Farmacia San Pablo is seeing in the market and with pharmacy suppliers?

A: Although our core business remains the same, many things have evolved, including technology, processes, the market and regulations. Our personnel had to evolve alongside the sector through local and international courses. We will continue changing and in the next five years, we expect to incorporate many new products. New distribution channels like Amazon are entering the market and leading us to reinvent ourselves. New trends have also emerged in terms of management, so we are working to ensure that our employees are prepared. All pharmacy chains are growing, which is intensifying the fight for the best talent.

Major suppliers are increasingly taking a larger role and increasing their prices and often they do not provide sufficient products. Suppliers seem to be changing their business model to one based on product rotation. This has caused problems for pharmacies due to the wide variety of products we offer. Laboratories have also shown gaps in supply in recent months.

Q: Is Farmacia San Pablo focusing more on retail or on its online platform?

A: The online market is still too young to reach definitive conclusions but the general consensus seems to be that neither will replace the other; the market is more likely to differentiate depending on the product that is being sold. In the US, some analysts believe that the division between online sales and the retail market will be 50-50, but Mexico is in an entirely different situation. There is no data with which to make a proper prediction.

Q: In which areas should local regulation be changed to strengthen pharmacies?

A: Regulators have taken significant action to improve the manufacture of medications but regulations have been left behind, especially for sales and distribution. Regulation regarding pharmacies has lagged far behind and regulators lack the necessary funds to properly address many issues. For instance, the sale of psychotropic medications is not applied correctly due to the lack of technology and the adequate processes to control it.

Q: How are retail stores changing the market? What is Farmacia San Pablo doing to adapt?

A: It is necessary to divide the pharmaceutical market between prescriptions and OTCs. In the case of OTCs, convenience stores like OXXO will have the opportunity to position themselves, but since the sale of prescription medications is highly controlled, convenience stores might not be willing to undergo the complex processes necessary to sell them. Moreover, these stores could only have a limited product offering as it would take a significant amount of space to store. In the case of self-service stores like Walmart, the consumer’s approach is completely different from that of a pharmacy, since it involves more planned shopping and is a more time-consuming experience. Consumers are unlikely to enter one of these stores just to buy a medicine because it would consume too much time compared to visiting a pharmacy.

Q: How is Farmacia San Pablo positioning itself among pharmacy chains?

A: All pharmacy chains have different market strategies. Some are focusing on the sale of medicines as commodities and for that reason their model is shifting towards that of a self-service store. Others are focusing on immediate supply. Our pharmacy is a mixture of both and includes a broad portfolio of healthcare products in addition to medications. Farmacia San Pablo has 7,000 employees and 120 points of sale that are located in Mexico City, its metropolitan area, Toluca and Metepec. We are also incorporating doctors at the point of sale but only in a few pharmacies. Having doctors at the point of sale is not part of our core business but clients are increasingly requesting them. For the rest of 2018, we will focus on sustainable growth.