The Value of Tradition in a Competitive MarketWed, 09/05/2018 - 09:41
Mexico has a population of over 120 million in a territory that covers 1.9 million km2. Getting healthcare services in smaller and remote locations can be a challenge but small and medium-sized pharmacies are stepping up to the challenge, says Juvenal Becerra, President of the National Union of Pharmaceutical Entrepreneurs (UNEFARM), an independent alliance created in 2009 by 25 pharmaceutical groups to represent the interests of independent pharmacies in the Mexican market. He points out that their traditional values allow them to continue competing in the market. “Independent pharmacies are operated by their owner so customer service is personalized and of very high quality. In addition, pharmacies of this size are located in places where chain pharmacies generally do not operate,” explains Becerra.
Mexico’s pharmacy market is dominated by pharmacy chains. According to a study by Anáhuac University, the country has 21,000 points of sale belonging to independent pharmacies and 7,500 points of sale associated with pharmacy chains. Yet, in terms of sales, independent pharmacies represent 16 percent of the private market, says Becerra. The market is dominated by the bigger chains, which account for a 65 percent share, according to the Anáhuac study.
Independent pharmacies are also helping to increase access to healthcare thanks to their extensive generic options. “In 80 percent of the pharmacies that UNEFARM represents, seven out of 10 drugs sold are generic.” Becerra says these types of medicines have enjoyed exponential growth because the public has recognized their effectiveness, in addition to the purchasing power of the population and the efforts of COFEPRIS. “Between 65 and 70 percent of the products offered by the independent pharmacies we represent are generic and between 25 and 30 percent are innovative.”
UNEFARM has 5,200 affiliated pharmacies and offers it members better commercial opportunities for product purchases, human resource training and tax advice. “We always look out for the benefit of independent pharmacies to remain competitive and survive the market,” says Becerra.
The alliance works directly with distributors such as Levic, Almacén de Drogas, Marzam and Nadro, negotiates with laboratories for independent or centralized purchases and also provides regulatory support to help pharmacies comply with guidelines. “COFEPRIS has helped us with health promotion visits, which has allowed us to adopt the needed changes in each location. The authorities have always been very close to independent pharmacies,” says Becerra.
The association wants to establish a structure for affiliated pharmacies and thus strengthen its presence in the market. Another goal is to empower small and medium-sized pharmacies with a more solid commercial base backed by technology. It recently developed software that records data from all affiliated companies to help each pharmacy understand market trends and price data. “This system will help us to homologate prices and in the future it will allow us to operate as a pharmacy chain.” To execute this plan, the association hopes to install the software in 3,000 pharmacies in the next two years. Afterward, it hopes to establish a name and a brand.
Besides software, independent pharmacies are adopting other Big Pharma trends, such as adjacent doctor offices. UNEFARM is also sketching its new operational model along the lines of segmentation as it works with pharmacies of different sizes. “Not all pharmacies have the same resources and capabilities but the image will be the same in different segments,” Becerra says. He adds that the main role of independent pharmacies is to take healthcare to those remote places where big pharmacy chains are not present. The second priority is to stay competitive in cities to compete with the big pharmacies.