Chain drugstores: Opportunities and Threats

According to non-official data, despite official ban, over 50% of the pharmacies in Tehran are illegally managed by non pharmacist investors. It means despite the regulations ban, tendency to Chain pharmacy exist in Iran and some investor has more than 10 pharmacies. It means despite the regulations, tendency to Chain pharmacy exist. Benchmarking in other countries shows some advantages and disadvantages of chain pharmacies which if regulated properly could lead to patient benefits. Chain pharmacy regulations are wide varying all over the world. The organization structure might be based on the horizontal or vertical integration. In vertical integration as the pharmacy integrated with distributor, wholesaler, and factory, repeated mark ups are omitted and the unit costs could be lower. But due to the market dominance caused by this loop, it is not accepted in most of the countries. In horizontal integration chain pharmacy construct by merging some independent pharmacies and could be sole-ownership or shared-ownership. Shared owner CDS is collaboration of some independent pharmacies which managed by directorate board and directing manager. In sole-ownership CDS, board of directors is shareholders who assign a CEO. The chain pharmacy advantages from a positive perspective include increase in the number of pharmacies, better access, lower unit costs, extensive insurance contract, lower costs due to economies of scale, cost sharing, merging of pharmacies that their activities are not economically feasible, developing new services, Increase the internal quality, loyalty of customers, easier human resourcing, better management in financial crisis, better online facilities, integrated logistics, ability to use of logistic technologies such as RFID and GPS for optimal management of supply chain, and information sharing which not only has financial benefits for the pharmacy, prevents drug shortage by forecasting and planning. So allocate efficiency, quality, product diversity, and productivity improve in chain pharmacies. Although optimistically all these benefits could happen in the tight supervision and proper regulations, there are many disadvantages that must be taken into considerations. The disadvantages from the opponents› point of view include; decrease in a qualitative competition due to the decrease in the number of competitors and market dominance, prevention to enter other chain stores to creation monopoly, more limitation and less creativity for responsible pharmacists, loss of professional autonomy, uncertainty in the acceptance of legal responsibilities, limitation of job opportunities of the technical pharmacists to some limited number of chain pharmacies, less attention to health system goals as their main concern is reaching the their financial objectives and target turnover, Poor quality of services and less speed of service delivery. The most important concern of the opponents of chain pharmacies is decrease in drug availability, specifically in far places where activity of chain pharmacies is not feasible. Moreover, the problem of availability of the hard-to-find drugs will be escalated, since it is not economical to buy and store these sorts of drugs. Moreover, as the chain pharmacies are dependent upon big loans and their debt is more, in crisis, they would be the weakest part of the health chain. All above mentioned points could be summarized in to three major categories; “Accessibility”, “Quality” and “Economics”. Copyright © 2014 by School of Pharmacy Shaheed Beheshti University of Medical Sciences and Health Services Iranian Journal of Pharmaceutical Research (2014), 13 (3): 739-741