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How can PRM increase the profitability of pharmacy networks?
by Paweł Oskory on December 14, 2023 You read:
How can PRM increase the profitability of pharmacy networks?
The pharmaceutical industry is experiencing tremendous growth, both in Poland and worldwide. In our country, there are nearly 13,000 brick-and-mortar pharmacies, but only slightly less than 4,000 are owned by individuals, with the rest being operated within a network model. This underscores the significant potential in this market for a Partnership Relations Management (PRM) solution designed to manage businesses in a distributed model.
According to data from IQVIA Poland, there are currently 12,887 pharmacies and pharmacy points operating in Poland. The market is decentralized, with the majority (5,951) belonging to 328 networks that have more than 5 outlets. The 17 largest companies, each operating at least 50 pharmacies, collectively manage 2,996 points, accounting for 35% of the market.
The number of individual pharmacies in the country is declining, while the number of pharmacies operating under network branding continues to rise. In just 2022, the number of individual outlets decreased by 292, while network-operated pharmacies increased by 46, despite legal limitations associated with their establishment.
How do pharmacy networks operate?
Pharmacy franchises operate based on a well-established business model that combines local pharmacist brands with the benefits of utilizing a known and trusted brand, making it easier to attract and retain loyal customers.
In the pharmacy sector, regulations and legal norms play a significant role, especially concerning the pharmaceutical industry. In Poland, the prices of certain medications are regulated by the Ministry of Health, which is also responsible for the reimbursement process. In 2017, the “Pharmacy for the Pharmacist” law was introduced, allowing pharmacies to be operated only by pharmacists. In August 2023, the Sejm (Polish Parliament) adopted an amendment to this law, stipulating that one qualified individual can operate a maximum of four pharmacies.
What challenges do pharmacy networks face?
Pharmacies, both independent and networked, encounter various obstacles in the dynamic healthcare and business environment. However, regardless of their location or distance from one another, the challenges they face tend to be similar. Here are some of them:
Expenses
Changes in drug prices and the costs of running pharmacies can affect profitability. Franchise pharmacies must monitor costs and compete on pricing while maintaining high service quality.
Regulations and Legal Norms
Pharmacy regulations can be complex and subject to changes. Franchise pharmacies need to continuously monitor legal developments and adjust their operations to meet current requirements.
Staffing
Finding and retaining qualified pharmacists and personnel can be challenging, especially given changing standards and increasing customer service expectations.
Operational Management
Managing operations can become complex as the network expands. Ensuring medication availability, inventory control, personnel management, and maintaining consistent service quality are crucial for franchise pharmacies.
Innovation and Technology
The digitization of pharmacies (electronic prescriptions, patient data management systems, modern e-commerce platforms) plays a significant role. Effective use of technology can improve operational efficiency. The popularity of e-commerce also impacts the pharmaceutical sector, as patients can order medications and healthcare products online, making access to needed items easier and more convenient. Data analysis and artificial intelligence are also used to predict trends in drug demand and optimize logistics processes.
What benefits can the implementation of PRM bring to pharmacy networks?
PRM is a modular platform that enables the seamless integration of all partners and points of sale. Each module supports a different aspect of network management, from acquisition and assessing the potential of new locations to maximizing sales and profit optimization. Implementing such a system in pharmacy networks can offer numerous advantages for both franchisors and franchisees. Below are some selected areas that can be improved with the PRM platform.
Improved Communication with Partners
The solution facilitates consistent communication between the franchisor and franchisees. This allows for real-time sharing of information, guidance, and updates.
Operational Management
The PRM system can integrate various aspects of managing franchise pharmacies, including planning, coordinating, and implementing promotions.
Standardization of Tools Across the Network
The platform provides access to files, knowledge repositories, and marketing materials, which help in better pharmacy management. This enables franchisees to benefit from proven solutions and best practices, ensuring consistency and quality in their pharmacies.
Performance Monitoring
The PRM system can provide franchisors with data on the performance and results of all locations within the network. This allows for analysis and assessment of achieved outcomes and identification of areas that require improvement.
Efficient Onboarding
The platform facilitates the smooth process of onboarding and acquiring new partners for the network, including launching new locations. This is one of the key benefits of implementing the PRM platform, highly appreciated by pharmacy networks.
Summary
The introduction of a PRM system can contribute to improving management and overall efficiency throughout a network of franchise pharmacies. This tool effectively integrates various aspects of operations, enhances competitiveness, and influences the success of the entire network.
Customers of pharmacies within the same network expect consistent experiences, even in locations that may be 500 kilometers apart. Familiarity with shelf layouts and product offerings can significantly influence consumer choices. Contact our experts to learn how we can implement a PRM system for your pharmacy network.
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