This post provides my perspective of the retail pharmaceutical industry in India and the USA. Even though the ultimate goal is to make medicine available to the end customer, it is done in slightly different ways in the two countries.
Pharma Industry in India
Organized retail pharmacy is still in its infancy. Popularly called pharmacy or medical stores, numerous pop & mom stores dot the busy streets of any city or town. Most of them just sell the packaged medicine in its original packaging and do not make any medicine.
The Business Model
In most the cases, the prescription is not recorded by the physician's office or hospital. Wait a minute, did I say you can go to any medical stores? There is a catch in it. The doctor/hospital, medical stores and pharmaceutical companies operate in a closed loop triangle model. The Pharmaceutical Company first sells the "medicine" idea to the doctor, then to the medical stores who has to invest in stocking the item. If the sales volumes are not met, the pharma sales person will make a "co-ordination" effort to increase the sales otherwise offers alternatives or the competitive products take over. Sometimes the competition in the "special"(read expensive) medicines category is so intense, if you plan to purchase the medicine like 5-10 miles away from doctor's location, you may not find it!. So the pharma sales cycle is customized to city/locality/street(?) level that it has not gained international attention!. Compare to the US, big box retailers are investing millions of dollars
in customizing their outlets suiting to local residents needs and preferences, a concept which is called Customer Centricity. Some medical stores sponsor the prescription stationary for the neighborhood doctors and in the bottom of the prescription is the medical stores address!!.
Some important Observations:
Doctor's Handwriting in Prescription: There exists some encryption logic which only the doctor & the pharmacist can understand. Common people try hard & fail to decipher these cryptic notes. May be the doctors got bored of writing prescriptions all their life or they want just the pharmacists to understand what they write.
Inventory Management:
Mostly manual, occasionally some shops have computerized sale & inventory transactions. Most of the inventory, sale transactions are recorded offline in a notebook or human brain!. It's really amazing how a pharmacist searches for a medicine in the maze of shelves containing numerous medicine packets, small carton boxes, bottles, etc. The prescriptions are filled on a first cum first serve basis and are done in a remarkably less time. Most of these guys do multi-tasking like work with 1 or 2 customers at a time. Vendor's sales representatives also help sometimes in inventory management & replenishment. Wait a minute, this is called Vendor Managed Inventory in the informed world and this concept is followed quietly in Indian pharmacy stores for so many years!
Customer Service: Being a competitive industry, store owners try to build a good relationship, trust and offer value added services like recommending the best OTC, Occasional discounts, product samples, door delivery, etc. A customer with a good rapport can negotiate exchange unused medicine with alternate medicine, soaps or other consumables.
Pharma Industry in USA
Unlike India, Retail Pharmacy is a niche industry and some of the big box retailers like WalMart, Target, WalGreens, CostCo, SamsClub offer OTC (Over the Counter) medicines & pharmacy services. The OTC department is the first stop for picking up medicine for common ailments. The prescription written by the doctor is documented in the physician/hospital records. The pharmacy stores take away the prescription and provide the prescribed quantity of the medicine (for tablets, capsules) in the small plastic bottles. Refills, if required are decided by the doctor, additional refills need to be authorized by the doctor. Pharmacy provides a detailed write up on the medicine which includes constituents, effects, side effects and allergy symptoms. The doctors generally do not oversubscribe to avoid overdose, any risk of wrong treatment or legal implications.
Business Model:
Looks more organized and not much is visible to the common man. I have seen medical representatives dressed in crisp suites calling on doctors towards the end of the morning or evening rush hours. From there on, I have no clue as to how the business model operates!
Customer Service: Professional, Pharmacist works with one customer at a time. Even though they provide excellent customer service, first time prescription filling time is significant because it involves checking the insurance details, recording the sale transaction in the system, preparing the medicine, etc. Refills are relatively easier and faster, however takes at least 10-15 minutes. Refills can also be ordered ahead by phone and picked up later. The OTC medicines offer a wide choice of medicines for common ailments. Branded medicines are expensive and some pharmacies offer alternate generic medicine which is quite economical.
2 comments:
Nice one again!
End of the day, I would be happy with the system that can give me (and everybody) medicines at an affordable price.
There is another angle for the business angle in the US. That's the nexus between the pharma manufacturers, government, insurance companies, and doctors. This is a very complicated network. One could get a PhD by just analyzing the basic connection.
Hi. Thanks for visiting my blog. You seem to dwelve deep into subject before scripting a blog. Nice post. I havent gone thru other posts tho.
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