Role of Pharmacies in Healthcare Ecosystem

Role of Pharmacies in Healthcare Ecosystem

After hospitals and healthcare clinics, pharmacies are the third most important delivery channel in a healthcare ecosystem. First of all, pharmacies make medicines/medical necessities available to the local public. Medicines of every big pharmaceutical company reach the remotest corners of the world via pharmacies. ECommerce and local home delivery models are the latest developments.

Most pharmacies also have the facility of visiting doctors providing initial check-ups/assessments and further recommendations at the local level.

Certified pharmacies can serve as delivery partners in health campaigns. Certified pharmacies can also play a pivotal role in emergency situations.

Not to mention that pharmacies create employment opportunities.

Given the significance of the role of pharmacies in a healthcare ecosystem, it becomes extremely important to manage these entities with utmost professionalism. Also, private pharmacies are businesses and they should be managed accordingly.

Challenges – from management perspective

Operational Challenges

As organisations, pharmacies are far simpler than hospitals or clinics. However, it is still a part of healthcare ecosystems and plays an important role in the value chain and patient journey. Having strong support functions for managing operations is of critical importance in the pharmacy business. Some of the characteristic operational challenges faced in the pharmacy business are discussed below.

Different countries may have different rules governing employment in pharmacies but the underlying essence is more or less the same – pharmacies can engage only registered professionals with the required qualifications. There is a growing shortage of qualified pharmacists in the world. Fewer students opting for pharmacy education is often cited as one of the reasons. Another related aspect is pay. Most of the traditional pharmacies that exist today are small, local businesses. It is difficult for these businesses to offer high salaries. Although many big brands and businesses including eCommerce players have entered this sector a lion’s share of the market is still held by small players.

Inventory management is another area of work that demands the utmost professionalism in the pharmacy business. To begin with, medicines come with expiry dates. Pharmacies have to keep an eye on this element. The need to have updated stock also emerges from changes and developments in products. Then there is the challenge of adjusting inventory based on seasonal factors that affect the demand for medicines and other medical supplies. Avoiding situations of overstocking and understocking is already there.

Planning and Strategic Challenges

Before taking any concrete step, every entrepreneur must ask this question introspectively – why choose this business? It is good to have some competitive advantage in the form of any inherent strength. This can significantly alter the rest of the business planning process. For example, if there is own commercial space in a prominent marketplace, it gives the proposed business multiple advantages from the start. However, things are not so straightforward in reality which makes this task challenging.

Market research is a quintessential requirement for any business. It applies to pharmacy retail enterprises as well. Casual understanding and vague assessments of local markets and consumer behaviour should not be treated as market insights. Most small businesses do not go for detailed and curated market analysis which often affects their business planning and marketing strategies.

Another challenge is identifying the right value propositions. Every market has certain unique characteristics and requirements. This affects the nature and specifics of values offered to target segments in each market. It is important to tune these value propositions to suit the requirements of each locality or market.

The challenges related to financial and commercial planning are discussed in a subsequent point later.

For existing pharmacy businesses, striving for growth and expansion is important. With rising competition and modernisation, many businesses find themselves stuck with their status quo.

Financial & Commercial Challenges

As pharmacies have to maintain an extensive range of inventory based on demand and expiry dates, they are required to plan their purchases carefully. In doing so, they must avoid both excess and shortage of inventory as the former can create a liquidity crisis and later loss of sales.

Increasing competition from offline and online players has forced pharmacy businesses to offer discounts from their margins. This is not easy for small enterprises with less business volume.

Rising operational costs have made things more difficult for pharmacy businesses. Annual hikes in rent, increasing tariffs for utility services, and demand for higher salaries/consulting fees are prime examples here.

Changing regulatory compliance requirements is not just a commercial challenge but also affects pharmacies financially and time-wise. This is another reason for hiring and retaining staff that understands these medico-regulatory complexities.

Changing customer expectations also necessitates pharmacies to keep updating themselves from time to time. Such makeovers and changes in the core system come at a cost. Technology adoption or upgradation serves as an example here.

Cash flow management is not possible without proper planning and working systems. Managing the inflow and outflow of cash is important to meet working capital expenditure, maintain profitability, and invest in funds and future growth and expansion endeavours.

Technological Challenges

One of the most basic technological requirements in the pharmacy business is inventory management software. It helps keep an eye on inventory statuses and make timely and informed decisions pertaining to replenishment, returns, etc. More advanced software platforms offer more sophisticated capabilities. The problem is majority of small businesses today are still reliant on writing inventory data on registers and copies. This makes the reordering process chaotic and unreliable. For example, the employee responsible for making reorders may find some handwriting on such registers illegible.

Another important technology used in the pharmacy business is the billing software. Both the billing and inventory software must stand integrated working from the same database of information. If two separate software applications are used and they are not well integrated, it can not only slow down the checkout process but also create financial losses. It can also hamper the ability to maintain the required stock levels.

A third technology that has become desirable is analytics. It can help in making better demand predictions, reading customer behaviour with data-based insights, tracking the performance of suppliers, analysing process performance, auditing, etc. Again, a majority of small businesses are not fully equipped with analytical capabilities using technology or are not utilising such capabilities adequately.

Latest Developments

One of the strongest developments in the pharmacy retail industry is the adoption of digital transformation. Today, pharmacies are trying to expand their range of service coverage via online platforms. This has enabled them to offer services like telepharmacy, remote consultations, prescription refills, online bookings, and home delivery.

Pharmacies are moving beyond their traditional roles. Many pharmacies are rebranding themselves as wellness centres that align with the idea of preventive care. There is also a growing trend of pharmacies associating with hospitals, healthcare clinics and centres, and laboratories and diagnosis centres. In many countries, precision medicine is also making a place for itself.

The use of blockchain technology is another emerging trend. Two important objectives of using this technology are strengthening product authenticity and logistical trackability.

Customer experience has also found strong roots in the pharmacy business. The reasons are no dissimilar than for any other business. It has become common to see pharmacies offering value-added services like online booking, home delivery, extended hours, drive-thru services, etc.

Future Trends

Pharmacies in the future will no longer be just about dispensing medicines or offering consulting services of visiting doctors. Pharmacies will play a key role in local healthcare ecosystems. The use of analytics to improve operations, marketing, staffing, inventory management, and other business functions and strategic areas is already becoming prevalent. Automation will have a greater part to play. Pharmacies will no longer be standalone business units but will engage with other stakeholders of the wider healthcare ecosystem like hospitals, insurance companies, and eCommerce brands with greater intensity.

Why PHARMCARE INDIA

With experience spanning over a decade as retail and eCommerce consultants, PHARMCARE has worked with over 500 enterprises from 25 sectors with a success ratio of over 94.5%. In pharmacy business consulting, PHARMCARE provides solutions for establishing a business, improving management, bringing operational excellence, and executing growth and expansion initiatives. A brief highlight of PHARMCARE’s services and solutions for pharmacy retail businesses is given below.

Market Research

PHARMCARE INDIA offers market research services targeted at delivering a detailed and insightful market understanding with actionable information and recommendations on an extensive range of parameters. Some of these parameters in market research for pharmacy business are listed below:

Market gaps

Customers’ needs and expectations

Potential solutions and value propositions

Market segments, buyer and consumer behaviour, buyer personas

Target market location(s), target market size

Obstructions to market entry and exit

Opportunities for scale

Pricing

Business Model Development

With increased competition among pharmacy businesses, startups must begin with strong value propositions and exclusive brand positioning. Achieving this demands going beyond the boundaries of conventional values and prevailing market standards. This brings to limelight outer-layer values like omnichannel services, hyper localisation, competitive discounts, loyalty or membership benefits, etc. In today’s pharmacy business models, it has become common to have supplementary, value-based services and benefits to achieve brand uniqueness. Pharmcare acknowledges these sprouting developments as well as the importance of staying true to the fundamentals in its business model development services.

Omnichannel Consulting

Adopting omnichannel aids pharmacy stores to overcome a few challenges and derive many benefits as well. In the pharmacy business, one of the toughest tasks is customer acquisition. By offering online services and home delivery, the chances of customer acquisition increases. This also helps overcome any locational constraint that might have emerged later. There are different levels of going omnichannel as per business needs. Pharmcare understands the subtle and strategic aspects involved in going omnichannel and tailors strategies accordingly.

ECommerce Consulting for Pharmacy Businesses

In eCommerce consulting for pharmacy retail businesses, Pharmcare offers a comprehensive array of solutions for business set-up and scale. The service objective is to deliver accurate and quickly implementable solutions going through a planned and proven methodology. The key elements of this service cover market research, business model development, financial and commercial planning, functional strategies, SOPs, identification of best-fit IT solutions, SOP-IT integration, franchising, and audit.

Functional Strategies

Functional strategies help keep the different business functions of an enterprise on the same page and aligned with the global business goals and objectives. Having well-planned functional strategies gives certainty to line and staff operations as specialised divisions as well as coordinated units of one enterprise. While Pharmcare provides solutions to some of the main line functions discretely (like financial planning and operations planning), the solutions for other functions are dealt with under this banner. The service objective here is to quickly conclude the strategic framework for other functions like HR, administration, logistics etc.

Pharmacy Location Analysis

In brick-and-mortar retailing, location plays a crucial role in the growth trajectory of a business. This applies to pharmacies as well. One important requirement is that pharmacies have to strike a balance between saving on rent and its marketing geniuses. However, marketing and promotions cease to bring any effective result in combating a poor location after a certain limit. On the other hand, going for a prime location does not take away the need for marketing and promotions. It is also to be kept in mind that the decision on location is not a standalone decision. It is affected by value propositions, value chain, supply chain, services of value chain partners, infrastructure, accessibility, traffic, anticipated developments in localities, consumer behaviour, etc. That is why Pharmcare starts working on location analysis from the very beginning depending on the services sought. Pharmcare understands that the intricacies of locational analysis with the rest of the business planning are not easy to manage especially, for new players.

Pharmacy Layout Planning

Traditionally, layout planning was not considered seriously in the pharmacy business. It was treated like any other counter-style retail store. However, this approach has dramatically changed. The new avatar of brick-and-mortar emphasises the element of premium and customisation. A lot of emphasis is now on how customers feel in addition to the core services. Instead of staying confined to the standard store layout models, Pharmcare’s approach is to let businesses speak as brands through their store layouts and appearances. This entails going for hybrid and customised solutions while keeping the fundamental objectives of layout planning intact.

SOP Framework – Operations Planning

YRC stresses that in modern-day pharmacy retailing, some of the required outcomes of operations are not confined to operations alone. The quality of operations also affects customer and patient experience, acquisition and retention, profitability, and long-term growth and expansion prospects.

SOP formulation and application is one of Pharmcare’s principal competencies. Pharmcare deals with operations framework solutions with an inside-out approach. SOPs are only the surface-level results – the vision is to help pharmacy businesses become process-oriented from within.

Pharmcare also helps in identifying the best-fit business IT solutions for pharmacy business process management followed up with the much-needed SOP-IT integration. This encompasses assistance in vendor search and selection and securing the required support from the selected vendor(s) in the tailoring and deployment of the business IT solutions. For additional information on SOP templates for pharmacy business, please visit Pharmcare India ‘s website.

Financial and Commercial Planning

Pertinent, thorough and precise financial and commercial planning is one of the keystones of a prosperous firm. Lacking appropriate financial and commercial planning is summoning unwanted challenges. For illustration, not forecasting and managing the inflow and outflow of cash/funds can produce a working capital crisis that can further lead to stalling operations.

Likewise, not having provisions for asset replacement can bring unexpected expenditures in huge amounts which then might have to be compensated with temporary borrowings at scorching interest rates.

With more than a decade in business, YRC is cognizant of the known and veiled characteristics of financial and commercial planning. Areas of planning covered in this service are:

CAPEX requirements

OPEX requirements

Demand forecasts

Sales and revenue estimates

Estimated flow of cash/funds

Forecast of P/L statements

ROI and break-even analysis

Applicable financial ratios

Working capital assessments and any other element of financial management as applicable

Pharmacy Franchise Consulting

Planning and executing a full-scale franchising exercise can be a daunting task for both franchisors and franchisees. Pharmcare India role here is to help pharmacy businesses and aspiring entrepreneurs catapult from idea to implementation in competitive timelines. Service areas covered are franchise expansion strategy, franchise business model development, franchise business plan, franchise partner selection, franchise operations manuals (franchise SOPs), and franchise agreements.

To know more about Pharmcare India pharmacy business consulting services covering business set-up, management, and scale or to speak to one of YRC’s pharmacy business consultants. please visit the company’s website:www.pharmcareindia.com