I.

Introduction

This study focuses on the certain benefits and challenges in operating a drugstore
business. Every business has challenges -sometimes simple, sometimes complex. It’s not the
challenge that separates one company from another, it’s the solution. It’s how a company acts
when faced with a problem an emergency new competition changes to the marketplace new
technologies. Creating a solution and then delivering on it is what separates great companies
from just good companies.

All human beings, but it seems business leaders in particular, find great discomfort in
uncertainty. Uncertainty in the global economy, uncertainty in the credit markets, uncertainty in
how new regulations will affect business, uncertainty about what competitors are doing, and
uncertainty about how new technology will affect the business—these are just the start of a
never-ending list.

The bottom line is that uncertainty leads to a short-term focus. Companies are shying
away from long-term planning in favor of short-term results, with uncertainty often the excuse.
While this might feel right, we believe that a failure to strategically plan five years into the
future can end up destroying value. The problem to be solved, therefore, is to balance the need
for a more reactive, short-term focus with the need for informed, long-term strategies.

The pharmaceutical industry is involved in developing, producing, and marketing drugs

licensed for use as medications. Pharmaceutical companies are allowed to deal in generic and/or
brand medications as well as medical devices. This industry is highly regulated, capital intensive,
and is driven by large research and development expenditures. Most companies are primarily
privately owned and are technologically sophisticated.

With today’s dynamic and highly-regulated market, differentiation is becoming more

important. Consumers are generally concerned about two criteria: (1) health outcomes and (2)
affordability. Global industry data show that the pace of innovation remains slow: the long-term
average is merely one new remedy drug a year per company. In relation to this, a significant
factor that will fundamentally impact individual pharmaceutical companies in the near future is
patent cliff. The revenues of drugs having patents that will expire from 2010 to 2014 are about
$89.5 billion USD. Revenues hammered by patent cliffs can only be partially compensated by
newly launched products.
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 Price cuts and regulatory pressures also continue to limit growth. Governments around
the world drive for solutions addressing treatments for nonlethal indications with large patient
numbers, decreasing the profit margins of drug companies. Pharmaceutical companies are also
being watched on their marketing practices, forcing them to adapt their promotional models.
Moreover, protection and enforcement of IP rights remains a difficult issue in many emerging
markets, with counterfeit and first-copy products prevalent. Consequently, the companies have
adapted their strategies in that many have altered their drug portfolios from primary care driven
blockbusters towards specialties such as oncology, immunology and inflammation, where the
medical need is so high that prices are more easily accepted by the regulators.

The purpose in conducting this study is to identify key issues face by a certain drugstore,
analyze the case using relevant theoretical concepts, and to find out, what are the alternative
courses of actions taken to overcome such issues.

The Agency/Company

GENERIKA DRUGSTORE- DAPITAN CITY BRANCH

No.1, Zamora Bldg., Brgy. Bagting, Dapitan City, Zamboanga del Norte

We have chosen Generika Drugstore, Dapitan City branch since this drugstore is one of
top and most trusted pharmaceutical store here in Philippines. We want to quest for information
about choosing this location, knowing that this branch in Dapitan City was just newly re-
established on January of this year. We also want to know the main reason why did the business
closed for few months. What approach did they use to convince the people to buy their products
where in fact, they are distributing unbranded drugs and medicines. We also want to examine

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this agency as to its Feasibility and to know how did they manage their rivals and become
advantageous to them eventually.

Generika Drugstore is a fast expanding chain of retail outlets promoting the widespread
use of quality but lower-priced generic medicines. Also offered at the drugstore are branded
medicines, medical supplies, galenicals and consumer goods. Through its drug stores, Generika,
the Company seeks to offer consumers with high-quality generic drugs which are much more
affordable compared to the available branded medicines, guide consumers in choosing the
appropriate generic drug to substitute for a prescribed brand, provide efficient and friendly
service to customers and gradually build a reputation of a complete, reliable and professional
chain of generic drug stores. We seek for information to develop and demonstrate an
understanding of a real-life cases.

The Organizational Structure

PATRICK G. CEREÑO
Store Supervisor

CRISTITA G. TAN
Pharmacist

RITA C. INSONG GINALYN A. CABRERA

Pharmacy Assistant Pharmacy Assistant

REGINELYN B. FERRER
Pharmacy Assistant

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History of Generika Drugstore

The idea of putting up a Generika Drugstore came about when Mr. Teodoro Ferrer, then a
newly retired Ayala executive and his business partner Mr. Julien Belo saw the plight of many
Filipinos when it comes to healthcare specifically the intake of medicine and the completion of
treatments that involves antibiotics. They noted that due to the high cost of medicines, people
tend to take shortcuts in their medication without realizing the health risks it involves.

This is what prompted them to put up a business venture that aims to offer quality
affordable generic medicines that will help each Filipino live a healthy life. This partnership
gave birth to Generika Drugstore - the pioneer champion of generic medicines in the pharma
retail space.

Generika Drugstore came from modest beginnings; Generika’s first office was a small 2-
bedroom apartment in Goodwill Village, Parañaque City. It was a huge risk for both partners
since none of them had a background in the healthcare industry, let alone in running a retail
business. Gradually, the company grew with the help of its stakeholders such as pharmacists and
key employees.

Generika Drugstore was established in 2003 to promote and distribute quality affordable
generic medicines, in the context of high prices of medicines in the Philippines and
underdeveloped usage and distribution of generic medicines. Generika opened its first drugstore
in Montillano, Muntinlupa in 2004.

In 2011, Generika Drugstore has set its footprints in Visayas and Mindanao. Generika
continued to expand by putting up more branches not only in key cities and municipalities, but
also in small towns and barangays. Franchising became the main engine of growth for Generika
in the years ahead as the company strives to serve more communities throughout the country.

True to its pioneering nature, Generika Drugstore launched in 2014, MEDPadala- an

electronic gift certificate used to purchase medicines. This is in response to the growing need of
OFWs abroad who sends money to the Philippines for their families’ health needs. MEDPadala
ensures that the money sent will be used for medicines only instead of other unnecessary items.

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 Another major milestone took place in 2015 when Generika Drugstore became a proud
member of AC Health, a subsidiary of Ayala Corporation. Through AC Health, Ayala acquired
50% stake of Generika to help address the gap in affordable retail healthcare. With Ayala’s
business expertise, Generika Drugstore is poised to become bigger in the pharmaceutical retail
space as it continues to be at the forefront in providing quality affordable healthcare to Filipino
families.

From its humble beginnings, Generika Drugstore has grown to become a chain, operating
more than 600 drugstores (company owned and franchise) and expanding rapidly into more and
more locations including the re-established branch in Dapitan City. We serve 4 million
transactions per year and this number is rapidly growing.

Product & Services

What we carry: Generic medicines: - we want to carry the widest range of generic
medicines available in the Philipines - We constantly source more generic medicines as they
become available. - All our generic medicines are evaluated first by our Corporate
Pharmaceutical Department so that we select reliable manufacturers for each one of them.
Quality is our primary concern. We also carry other medicines and items In our desire to become
a more complete drugstore, we also carry at competitive prices: - many branded medicines,
especially those not covered yet by a generic medicine - consumer goods (milk, diapers,
cosmetics…) - food supplements, galenicals, medical supplies…

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 The company’s focus is on generic medicines as a value-for-money alternative to branded

products. Generika fully believes in and supports the thrust of the government to provide quality

and affordable generic medicines to the Filipino people. Many of our store outlets are already

accredited as Botika ng Bayan.

Equally important is the corporate commitment of Generika to the quality of the

medicines offered to customers. Generika takes a long term view and aims to firmly establish its

reputation and credibility both in the industry and the marketplace. We carry only BFAD

approved medicines, but take the additional step of screening and selecting only those that

meet/exceed our internal standards. We put the quality of the medicines we sell above all other

considerations. Moreover, periodic monitoring of the products is done thereafter to ensure that

quality remains consistent. Substandard products are rejected outright. We will not compete for

market share simply by offering the lowest price.

While the company’s focus is on quality generics, Generika Drugstore also carries

branded medicines, medical supplies, galenicals and selected consumer goods – all at

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competitive prices. Our aim is to be a more complete drugstore than many typical outlets in the

market.

Integral in our corporate mission is to put the satisfaction of our customers at the center

of our strategies and plans, by serving their needs correctly, efficiently and by providing friendly

and professional counseling. It is our desire to ensure that drugs are used in the safest and most

effective way possible, which is why patient counseling by trained store personnel is a key part

of our operation. All our stores are air-conditioned because we want to maintain the efficacy and

potency of the medicines we sell, and to serve our customers in a more convenient and

comfortable environment. Store personnel wear attractive uniforms. They undergo recurrent

training courses to sharpen their technical knowledge and skills so that they give superior service

to the customers.

Delivery service for a minimum P300 purchase of generics is an added convenience

to our customers and is now offered daily in most stores.

Thus people can visit our stores and have their Blood Pressure monitored for free.

Blood Sugar Screening (FBS/RBS) can be done for a minimal amount. We also conduct Libreng

Konsulta, Libreng Bunot, and provide free cholesterol screening during special occasions.

Generic awareness presentations are often made to senior citizen chapters and other groups to

make them well-informed about generics.

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 Generika Drugstore long term goal is to be the leading national chain of drugstores

offering quality affordable generic medicines. We shall offer superior customer service,

complemented by a strong sense of social purpose. To reach this goal, we see franchising as the

main engine of growth in the coming years as the company expands its reach in measured steps

throughout the country. Aside from being a professionally-run business enterprise, a key

element of Generika’s corporate mission is its firm belief in social commitment and purpose. We

believe in sharing. We truly want to help communities get well and stay well. As part of

Generika’s commitment to help others, the company grants generous discounts to medical

missions of NGOs and government agencies, and our store personnel often participate in these

activities.

The Generika Drugstore Dapitan Branch, was just established on January 2019. The

establishment is operated by 5 personnel, 1 store supervisor, 1 pharmacist, and 3 pharmacy

assistants. The service area was very convenient for customers for it is a fully air-conditioned

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store, and base on the observation we have conducted there, the customers were well-entertained

by the pharmacy assistants and the interaction to customers was also polite and good.

Vision
“Generika is the most innovative national drugstore driven by a strong sense of social
purpose. We are at the forefront in providing quality affordable healthcare with superior
customer service”.

Mission

 We put customer satisfaction above all else, serving our clients' needs
effectively and efficiently with friendly and professional counseling.
 We offer relevant quality affordable healthcare products and services.
 We are a team of highly motivated and competent individuals, professionally
managing our operations and driving company growth and profitability.
 We recognize the importance of our employees in achieving our aspirations.
Our workplace culture is based on meritocracy and respect.
 We foster a community spirit that understands, values and benefits from
quality affordable healthcare.

After we have interviewed one of the Pharmacy Assistant, Ms. Rita C. Insong, we

conclude that Generika Drugstore Dapitan Branch was just re-established and started its

operation on January 2019. The first established Generika Drugstore in Dapitan was a Franchise,

and by the time the contract was up to renew, the Franchisee refused due to financial incapacity,

that’s why, the store was temporarily closed for a few months (not specified) and being reopened

on January 2019 as a Branch. The most in demand medicines were for the persons who are

suffering high blood pressure. Interview also reveals that the location of the branch was feasible

to all consumers, since it was just placed near the Dapitan City Public Market and Evergood Bus

Terminal. And aside from offering affordable medicinal products, for them to become more

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advantageous to their competitors, they offered some medical consultations and tests in which,

much more affordable such as Cholesterol test for just P135.00, Uric test for P30.00, FBS-Sugar

test for P25.00, Cellphone Loads, and Free Blood Pressure test.

We have also found out that the greatest rival of Generika Drugstore Dapitan, was just its

neighborhood pharmacies which are Cherry Pharmacy and Kristine Pharmacy. There were also

times that customers were confused due to unavailability of the medicine they need. And since

the drugstore was just a newbie to the location, they only have few customers however,

according to the interviewee, it is gradually progressing.

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Issues discovered

Challenges for Society in General

1. Existence of several generic alternatives to a branded drug.

2. The Effectivity and benefits of Generic drugs and medicines compared to branded ones.

3. The beliefs about “switching to generic drugs can worsen your medical condition or may

lead to treatment failure”.

Any type of medicine can potentially cause side effects regardless if it is branded or
generic. The occurrence of such is dependent on a person’s clinical condition and predisposition
to allergic reactions toward particular chemicals found in the medicine, and not because it does
not possess a brand name. But precaution need to be taken when patient shifts in case of drugs
having narrow therapeutic index. Any type of medicine can potentially cause side effects
regardless if it is branded or generic. The occurrence of such is dependent on a person’s clinical
condition and predisposition to allergic reactions toward particular chemicals found in the
medicine, and not because it does not possess a brand name. But precaution need to be taken
when patient shifts in case of drugs having narrow therapeutic index.

Challenges for the Agency

1. The difficulty in convincing people to buy generic medicines.

2. Some customers are having poor awareness to generic prescription medicine.
3. Small number of customers due to lack of trust
4. Doctors mostly prescribed branded medicines than Generics.

According to the co-founder of Generika, it took some time and money to convince
Filipinos that affordable generic medicines offer the same benefits as branded ones. He also said
that it was the French social worker Julien Bello's idea to sell generic medicines to help the
people save on costs. “People were buying very expensive branded medicines and he was saying
there are alternative quality medicines with very big savings,” Ferrer said. It was "a big

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challenge" promoting generic products at first due to the smuggling of low-quality products,
Ferrer said, adding that doctors also endorse branded medicines. They lost money for the first 3
years before their efforts paid off as consumers realize the benefits of generic medicines, Ferrer
said. Generika's partnership with Ayala Corp also enabled them to reach a wider market, he
said. "Some people finally used them and they found that it gives them the same therapeutic
benefits,” he said. More than the success of the business, Ferrer said he was pleased with the
increased awareness of Filipinos in using affordable alternatives.” I am very pleased to say that
our initiative also encouraged other businessmen to put up similar pharmacies and the combined
effect is that, a widespread acceptance of generic medicines,” Ferrer said (Cathy Yang, ABS-
CBN News, 2018).

Challenges for those working in the Agency

1. Incorrect distribution of drug/medicine

2. Frustration caused by customers’ confusion due to unavailability of the medicine they
need to buy.

These problems are just common to all drugstores and pharmacies. This is why Generika
was offering replacement services. Proper distribution of medicines and good interaction with
customers could help lighten the problem. Make the best things as much as possible, be
positively consistent to every piece of work and be socially responsible.

Generic drugs were introduced in the Philippines several decades ago but until now a lot

of us still don’t really understand what generic medicines are. The lack of awareness led to

people to create myths about them, and whether you agree or not, there’s a time you believed

those myths. One of the most troubling myths about generic drugs is its efficacy. Many claim

that generic medicines are not effective and will only worsen your health condition. And this is

where Generika Drugstore founder and people are working their best to provide the millions of

Filipinos who need access to affordable quality medicine.

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 One of the things Ferrer envisioned is to provide solution to a problem that has been

haunting the industry: To deal with the shortage of licensed pharmacists in the country. “One of

the problems that all drugstores are facing is the shortage of pharmacists in the country. It is a

requirement to at least have one licensed pharmacist at the stores, but there is a shortage of

pharmacists. So right now, we are preparing to address this problem,” Ferrer stressed.

It has been written that Generika Drugstore came about because of the two

individuals—Teodoro L. Ferrer and Julien Bello—who have a heart for poor people who are

badly in need of medication. The desires of the founders to provide access to quality, affordable

medicines led them to the establishment of a network of drugstores, which will sell quality

affordable generic medicines—Generika Drugstore. Now that some of the missions and visions

have been fulfilled, Ferrer has concocted another formula to better the health situation of the

people.

The Project Oro of Ferrer, which was launched during the 15th anniversary of

Generika Drugstore, is not about generic medicines but teaching the people to adapt a healthy

lifestyle. This is another advocacy that aims to first change the mindset of the people about

wellness, then lead them to practice a lifestyle that is rooted in attaining better health.

SWOT Analysis of Generika Drugstore-Dapitan City Branch

STRENGTHS

 Affordable Price
 Fully Air-conditioned store
 Well known endorsers
 Well trained and highly competent staff
 Offers Medical Consultations and Tests
 Location Accessibility

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 WEAKNESSES

 Store size
 Usually out stock medicines
 Low customer base
 Can’t easily adapt to the advancing technology
 Unbranded Medicines

OPPORTUNITIES

 The constant growth of the number of people (medicine, diet or beauty, vitamin C)
 Growing health insurance sector
 Increasing literacy levels, rising health care spend (customer consider their health not basic
needs)
 More sickness being during summer season

THREATS

 Other established pharmaceutical companies that also offering generics drugs

 Competitors running their stores 24 hours
 Policies of Philippine Government towards its pharmaceutical industry
 Closely distant competitors

The Research

According to Diana Fernholz on 2012, the combination of the for-profit motive with
concern for catering to the needs of the poor makes Pharmacy/Drugstore truly innovative. It
means that a sustainable market can be organized along the health care needs of the poor, and
that the poor are not always the beneficiaries of dole-outs that conventional wisdom often makes
them out to be. It has always been assumed in many places that only subsidized pharmacy
supplies from the government can solve the equity problem pharmacy in developing countries.
Some pharmacies prove this ideology wrong. Some is a purely-for-profit enterprise that brings
affordable drug supplies to poor households in urban and rural areas. It does this far, far better
than any government program, or any subsidized program for that matter.

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 Change comes when someone does something different. When that activity meets a real
or perceived need, it makes money for the innovator. In pharmacy’s history, it has been the
pharmacy entrepreneurs who have been the practice innovators. These people are the risk takers.
Employee pharmacists are generally not real risk takers, although they can sometimes be
innovators within a system. What pharmacy needs to help us prepare for tomorrow are “out-of-
the-box” thinkers who are willing even to put their careers at risk to make the pharmacy
advancements that solve real patient problems. That requires a different mentality not possessed
by most employee pharmacists. Perhaps the entrepreneurial spirit can be taught, but probably it
will require the recruitment of different personalities into pharmacy. Related issues associated
with this are the growing oversupply of pharmacists; pharmacists’ willingness to let the current
law dictate their practice rather than working to change it; and low pharmacy organization
membership, especially at the state level (Diana Fernholz, 2012).

Is comprehensive medication therapy management (MTM) different from what most

pharmacists do when they get paid for MTM today? What occurs under the rubric of MTM today
is often a focused intervention to solve 1 patient care problem. Comprehensive MTM puts that 1
problem in a broader context of the patient’s total drug profile and makes broader
recommendations that change the patient’s drug therapy profile. Supporters of comprehensive
MTM feel that only selected pharmacists can perform such a review, while acknowledging that
focused MTM can be done by most pharmacists. To really impact a patient’s quality of life as
well as assure health care cost reductions, comprehensive MTM is required. How payers and
pharmacy address this issue can have real impact on pharmacy’s future. Related issues include
pharmacist provider status; uniting pharmacy organizations; and the role of pharmacists in
primary care (Fred M. Eckel, 2013).

Just because a pharmacist can do a particular function does not mean that all pharmacists
can do it well. This issue has 2 components. Does pharmacy have in place the right programs,
such as practitioner certification programs or practice site accreditation programs, to ensure that
consumers will be able to experience similar quality when they receive services from different
pharmacists or pharmacies? Clearly, pharmacy has been moving forward on these fronts, but at
the community practice level we have few certified practitioners or accredited practice sites.
The other aspect of this issue reflects on the pharmacist practice model. Is drug dispensing the

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pharmacist end or is it just the means to a more important role? This is the way I would frame the
issue. How the profession answers this question and how patients and payers respond will clearly
have a major impact on pharmacy’s future. Related issues include the pharmacy technician role;
training student pharmacists in the practice environment; and the need for community pharmacy
accreditation (Fred M. Eckel, 2013).

As health care responsibilities change, better documentation of what pharmacists do

become critical. From an audit perspective, the adage “If it isn’t documented, it wasn’t done”
applies even more today. But if we want to be able to see the pharmacist value proposition
become truly accepted—“When pharmacists are involved, patient access and outcomes improve
while patient care costs are less”—we have to keep documenting our contributions. As pharmacy
changes, what pharmacists document and where they document it becomes important. The
profession needs a standardized documentation process that all pharmacists utilize, such as the
“Pharmacist Workup of Drug Therapy.” Too many pharmacists use their own system rather than
a uniform process in providing patient care. This lack of standardization for a pharmacist patient
workup has impacted the broad acceptance of pharmacists as part of the team. As health care
becomes interdisciplinary, pharmacists must become essential team members since drugs play
such an important role in the care process. A standardized documentation system is critical to the
pharmacists’ acceptance on the health team. Related issues are how pharmacists are recognized
as contributors to a Medicare Plan Star Rating; how medication safety measures from the
Pharmacy Quality Alliance are utilized; and even the role pharmacists will play in medication
synchronization or adherence monitoring programs (Fred M. Eckel, 2013).

As everyone knows, there is a new law in effect that will have great impact on how health
care will be delivered in the future. For the most part, pharmacy collectively has stayed out of the
broad political fight about the issue, but has tried to have the profession positioned to function
well within a transformed system. As the debate continues to play out in Congress and state
houses, reform continues. It seems certain that reimbursement models will move from fee for
service to some type of shared risk contracting. Where does a profession like pharmacy,
primarily supported by (drug) product payments, fit into these new payment schemes that
provide payment based on accountability for outcomes? The way pharmacy addresses the
previous issues will determine how well we do in a reformed health care system. It will

16
determine whether most pharmacists can practice at the top of their license or whether the
pharmacist continues to remain the most underutilized health professional tomorrow. I’m betting
that pharmacy makes the changes to become an even more important team player in all settings
(Fred M. Eckel, 2013).

Community Pharmacy

According to WHO Consultative Group in 1993, Community pharmacists are the health
professionals most accessible to the public. They supply medicines in accordance with a
prescription or, when legally permitted, sell them without a prescription. In addition to ensuring
an accurate supply of appropriate products, their professional activities also cover counselling of
patients at the time of dispensing of prescription and non-prescription drugs, drug information to
health professionals, patients and the general public, and participation in health-promotion
programs. They maintain links with other health professionals in primary health care.

Today, an increasingly wide range of new and analogous products are used in medicine,
including high-technology biological products and radio-pharmaceuticals. There is also the
heterogeneous group of medical devices, which includes some products analogous to medicines,
some of which demand special knowledge with regard to their uses and risks (e.g., dressings,
wound management products, etc.), (WHO Consultative Group, 1993).

The main activities of community pharmacists are described below.

Processing of prescriptions

The pharmacist verifies the legality, safety and appropriateness of the prescription order,
checks the patient medication record before dispensing the prescription (when such records are
kept in the pharmacy), ensures that the quantities of medication are dispensed accurately, and
decides whether the medication should be handed to the patient, with appropriate counselling, by
a pharmacist. In many countries, the community pharmacist is in a unique position to be fully
aware of the patient’s past and current drug history and, consequently, can provide essential
advice to the prescriber (WHO Consultative Group, 1993).

Care of patients or clinical pharmacy

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 The pharmacist seeks to collect and integrate information about the patient’s drug history,
clarify the patient’s understanding of the intended dosage regimen and method of administration,
and advises the patient of drug-related precautions, and in some countries, monitors and
evaluates the therapeutic response (WHO Consultative Group, 1993).

Monitoring of drug utilization

The pharmacist can participate in arrangements for monitoring the utilization of drugs,
such as practice research projects, and schemes to analyze prescriptions for the monitoring of
adverse drug reactions (WHO Consultative Group, 1993).

Extemporaneous preparation and small-scale manufacture of medicines

Pharmacists everywhere continue to prepare medicines in the pharmacy. This enables

them to adapt the formulation of a medicine to the needs of an individual patient. New
developments in drugs and delivery systems may well extend the need for individually adapted
medicines and thus increase the pharmacist’s need to continue with pharmacy formulation. In
some countries, developed and developing, pharmacists engage in the small-scale manufacture of
medicines, which must accord with good manufacturing and distribution practice guidelines
(WHO Consultative Group, 1993).

Traditional and alternative medicines

In some countries, pharmacists supply traditional medicines and dispense homoeopathic

prescriptions (WHO Consultative Group, 1993).

Responding to symptoms of minor ailments

The pharmacist receives requests from members of the public for advice on a variety of
symptoms and, when indicated, refers the inquiries to a medical practitioner. If the symptoms
relate to a self-limiting minor ailment, the pharmacist can supply a non-prescription medicine,
with advice to consult a medical practitioner if the symptoms persist for more than a few days.
Alternatively, the pharmacist may give advice without supplying medicine (WHO Consultative
Group, 1993).

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Informing health care professionals and the public

The pharmacist can compile and maintain information on all medicines, and particularly
on newly introduced medicines, provide this information as necessary to other health care
professionals and to patients, and use it in promoting the rational use of drugs, by providing
advice and explanations to physicians and to members of the public (WHO Consultative Group,
1993).

Health promotion

The pharmacist can take part in health promotion campaigns, locally and nationally, on a
wide range of health-related topics, and particularly on drug-related topics (e.g., rational use of
drugs, alcohol abuse, tobacco use, discouragement of drug use during pregnancy, organic solvent
abuse, poison prevention) or topics concerned with other health problems (diarrhoeal diseases,
tuberculosis, leprosy, HIV-infection/AIDS) and family planning. They may also take part in the
education of local community groups in health promotion, and in campaigns on disease
prevention, such as the Expanded Program on Immunization, and malaria and blindness
programs (WHO Consultative Group, 1993).

Domiciliary services

In a number of countries, the pharmacist provides an advisory as well as a supply service

to residential homes for the elderly, and other long-term patients. In some countries, policies are
being developed under which pharmacists will visit certain categories of house-bound patients to
provide the counselling service that the patients would have received had they been able to visit
the pharmacy (WHO Consultative Group, 1993).

Agricultural and veterinary practice

Pharmacists supply animal medicines and medicated animal feeds (WHO Consultative
Group, 1993).

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Trends Affecting Pharmacy

To sell a product or service in any setting, you need to understand the target audience’s
environment. How does the outside world affect the prospect’s world? To help paint a picture of
what the prospect faces—and help us better position our clients’ products and services
accordingly—part of FrogDog’s market-analysis process assesses environmental factors and
trends for each target audience. For pharmacy, the current economic environment plays a big role
in the industry’s receptiveness to new product and service introductions. Companies that seek
success in selling into the pharmacy need to understand the economic landscape the industry
faces (FrogDog, 2018).

Pharmacy Consolidation

In the United States, the retail pharmacy industry is highly concentrated: The 4 largest
companies generate about 70 percent of the retail pharmacy industry’s total revenue. And the
market is only further consolidating by the day. In purchasing independent pharmacies and
smaller chains, retail pharmacy chains grow sales and script count and gain negotiating power
with suppliers. Chain stores account for about 50 percent of the retail prescription market in the
United States, according to IMS Health. Independent drug stores make up 15 percent, and they
are eclipsed by mail services, which account for about 25 percent of the market. Supermarket
pharmacies account for about 10 percent of the retail prescription market (FrogDog, 2018).

Due to the negotiating power that size lends to pharmacies, industry consolidation poses a
threat and an opportunity to other constituents in the health care continuum. For some pharmacy
partners—including pharmaceutical manufacturers and distributors, pharmacy benefit managers,
payer organizations, and other players in the health care space—consolidation in pharmacy
means a reduced ability to negotiate for preferential terms due to a shift in the power balance
(FrogDog, 2018).

Price Pressure

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 In the near term, health care reform, including price pressures on hospital care and on
pharmaceuticals, will continue to drive a laser focus on operational efficiencies and new revenue
streams throughout pharmacies and hospitals and health systems. To counter price pressures and
bolster their operations against competition, pharmacies have intensified their efforts to capture
as much of the volume game as possible (FrogDog, 2018).

Retail Shifts

Personal-consumption expenditures for drug preparations and sundries, which are major
indicators for drug stores, are forecasted to grow at an annual compounded rate of 5 percent
between 2016 and 2020 in the United States. Further, over-the-counter pharmaceutical sales are
expected to double by 2023, according to market research, due in part to patent expirations on
prescription drugs. More than 700 over-the-counter medications are available that were sold only
by prescription 30 years ago (FrogDog, 2018).

Drug-store chains typically generate about two-thirds of their sales from prescriptions;
front-end items account for a third. Fortunately for pharmacies facing price pressures on
prescription drugs, this balance is shifting: Per a Dun & Bradstreet report on the drug industry,
the revenue percentage of front-store items has increased in recent periods. Toward the goal of
increasing front-store sales, pharmacy retailers focus on promoting convenience to their
communities. In addition, pharmacy retailers keep eyes open for offerings that draw consumers
into the pharmacy to increase front-store sales in the “off season.” Typically, drug store retail
sales increase during Christmas and during cold and flu periods (FrogDog, 2018).

Therefore, in this realm as well, volume matters: Retail pharmacies capturing more
market share at present will help them gain in the near term and in the long term as retail
purchasing increases. Yet in pharmacy as well as in other retail settings, the digital realm has cast
a deep shadow on bricks-and-mortar retailers: Consumers have moved toward purchasing
household and cosmetic items—valuable front-store revenue for retail pharmacies—on-line and,
more recently, have begun to purchase prescriptions on-line as well (FrogDog, 2018).

Internet retailers and on-line and mail-order pharmacies operate with lower overhead;
therefore, they can offer lower prices for consumer purchases and for prescriptions than many
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traditional drug stores can offer. Further, on-line drug stores based in Canada can present
significant discounts over United States–distributed equivalents. In addition to lower costs, on-
line and mail-order pharmacies offer significant convenience over waiting at stores for
prescriptions to be filled (FrogDog, 2018).

Therefore, bricks-and-mortar retail pharmacies need more offerings than ever before to
draw people into their stores. Toward this end, many have moved toward increasing services that
pull in foot traffic and its associated revenue, such as in-store clinics and pharmacist
consultations. Time will tell how quickly the rise of telemedicine devalues this current
differentiator (FrogDog, 2018).

Increasing Consumer “Ownership”

Ownership of the health care consumer ties closely to revenue for all players along the
health care continuum. Therefore, as the balance of power in the health care system continues to
fluctuate, organizations strive to control an increasing percentage of the patient experience and
relationship—including pharmacies. With this goal in mind, as mentioned above, retail
pharmacies have moved to open in-store clinics and work-site health centers. Challenges in
gaining access to physicians, frustration with traditional doctors’ offices and hospital
experiences, and community-location convenience sends an increasing number of health care
consumers to pharmacy clinics year over year. Accenture predicts that the number of walk-in
retail clinics in the United States doubled between 2014 and 2016 (FrogDog, 2018).

Decision Makers in Pharmacy

Who makes the purchases? The answer: It depends on the type of pharmacy. (And
sometimes, even within categories, it often further still depends on the unique organizational
structure of the company.) Yet unless you know who specifically within a target organization
you’re trying to reach and what matters to him or her—or to the group—you can’t succeed in
making a sale (FrogDog, 2018).

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Large-Chain Pharmacies

In large-chain pharmacies, like Walgreens and CVS, the key decision makers will vary
by chain. However, all of them will work in the corporate office (rather than in the local
pharmacy or at the regional level). In many cases, large-chain pharmacies will involve their
procurement departments during the purchasing process. If the product or service has regulatory
or compliance components, regulatory and compliance chains of command and corporate legal
counsel will be involved in determining whether and how to move forward (FrogDog, 2018).

When it comes to vender selection, price is important for large-chain pharmacies—but it

may matter less than convenience, flexibility, and peace of mind. Large-chain pharmacies have
many moving parts; the complexity of their national businesses heightens their need for stable,
legitimate, experienced venders who can reduce hassle and minimize any possible regulatory and
compliance risks (FrogDog, 2018).

Independent Pharmacies

Independent pharmacies, which the industry defines as having fewer than three stores
operating under a single corporate umbrella, typically have one decision maker: The business
owner, who is often the lead pharmacist as well. Widening consolidation in the retail pharmacy
space poses an especial challenge for the independent pharmacy. The strength and power of the
large-chain pharmacies, from marketing to store polish and presentation to deep pockets for
perks and extras and, most especially, for negotiating power with manufacturers, distributors,
payers, and pharmacy benefit managers, means that owners of independent pharmacies have
grown sensitive. Offerings that do not measurably affect their top lines and that take valuable
floor space will be hard sells (FrogDog, 2018).

Countering the Problem of Falsified and Substandard Drugs

The modern pharmaceutical supply chain is complex. Medicines are made from
ingredients sourced from different countries. Final formulations are then exported. Packaging,
repackaging, and sale can happen in many other countries. Drugs change hands many times
between the manufacturer and patient; every transaction is an opportunity for falsified or

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substandard products to infiltrate the market. Changes to the drug distribution system could
improve drug quality around the world.

This chapter gives an overview of the drug distribution chain, explaining differences
between the systems in developed and developing countries. The drug wholesale system is a
weak point where the licit and illicit supply chains mix. Better controls on the wholesale market
could improve the security of the distribution chain. Drug tracking systems could also improve
security by preventing products that leave the legitimate supply chain from returning to it. These
solutions can improve drug safety as long as the supply chain does not disintegrate at the point
closest to the patient. Disorganized drug markets, both real and on the internet, undermine
regulatory checks on medicines distribution.

Chain Drugstores: Opportunities and Threats

Accessibility of the pharmacy

Due to increase in the total number of pharmacies, accessibility increase. But it does not
happen all over the country. Despite the number of pharmacies increase in the urban areas, rural
and far-away areas face to drop in number of pharmacies. So in chain pharmacies› regulation,
care should be exercised to avoid this problem by obligation of establishing chain in the rural
areas (such as in Australian regulation), (Iran J Pharm Res, 2014).

Accessibility to the prescription drugs

In vertical integration due to the distributors› dominance, and in the horizontal integration
due to the economical profits, high prescribed drugs are always available while rare drugs remain
rare and it would be worse in the rural areas (Iran J Pharm Res, 2014).

Drug accessibility

In case of lack of proper regulation and supervision, due to the above mentioned reasons
and tendency to sale non-medical items by higher profitability, drug accessibility would decrease
(Iran J Pharm Res, 2014).

Personnel quality

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 Powerful organization of Chain pharmacies enables them to employ high quality
personnel. They can also could establish higher standards and train their personnel. However, in
the lack of proper supervision, pharmacists are faced to problem for finding proper job and their
professional creativity decrease. Empowerment of pharmacy owners and monopoly affect
professional independence of pharmacists and fade roles (Iran J Pharm Res, 2014).

Service quality

Some believe that lack of attention towards the prescription drugs and increase in the
sales of non-prescription medicines and non-pharmaceutical products in spite of higher internal
standards leads to poor quality of drug services. High load of work in chain pharmacies, lead to
decrease in medical counseling; whereas, in independent pharmacies, due to a sole-ownership
policy and fixed management quality of the services will have sustained in the course of time.
Meanwhile, some others believe that the quality of services in chain pharmacies is surely
increased due to the economic power for employing more pharmacists by more payment. patient
pay more attention to pharmacists because of the better services provided, and there is more
inclination to paying counseling fee to the advising pharmacists compared to the independent
pharmacies; counseling time also seems more comparatively. These different perspectives are
because of the differences in the number of chain pharmacies and their authority over the market
in different countries (Iran J Pharm Res, 2014).

Contributing to health system’s objectives

Although focusing on the profit may lead to the weakened role of pharmacist in the
health care within the chain pharmacies and failure in achieving health system goals, by proper
regulation and supervision, Chain pharmacies› facilities will be the opportunity to provide health
services such as screening programs and training patients towards a better understanding of their
health and their own potential needs (Iran J Pharm Res, 2014).

Pharmacy costs

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 Due to the use of shared resources and economies of scale, costs are mostly reduced,
though at times, high expenses in infrastructures or decoration may add up the total costs (Iran J
Pharm Res, 2014).

Affecting the economy of independent pharmacies

One can never deny the influence of chain pharmacies as a powerful competitor over the
economy of independent pharmacies. In one view, integrating independent pharmacies with low
turnover into chain pharmacies can save them; On the other hand, chain pharmacies can lead to
more treat for independent pharmacies life (Iran J Pharm Res, 2014).

Patient costs

It is expected to decrease Price of non-prescription and generic drugs and give a discount
on generic drugs, which lead to decrease in the consumers’ drug expenses. But in many countries
this is not the case. Although there is a more bargain power in chain pharmacies, the decrease in
the consumer price is dependent upon the monitoring and controlling of pharmacy profit margin
(Iran J Pharm Res, 2014).

Health section costs

In chain pharmacies, due to the increase in the market power and monopoly, induced
demand will have increased, and because of the selling more non-prescription medicines and
supplements, the general health system cost is increased (Iran J Pharm Res, 2014).

Findings on related articles

After gathering all the necessary and related data and information, the following findings
revealed:

1. Pharmacists of today, have progressively undertaken the additional task of ensuring the
quality of the products they supply.

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 2. At present, consolidation, price pressure, retail shifts, and health care industry changes
significantly affect the pharmacy industry and play a role in each pharmacy’s business
planning.

3. There are pharmacies in some other countries who are supplying traditional and
alternative medicines.

4. There is an increase in the total number of pharmacies therefore, accessibility also

increases.

5. To become more powerful organization, there is a must in employing high quality

personnel.

6. Due to the economic incentives, Chain pharmacies would not be avoidable and even
though the legal limitation, they have been established illegally.

7. Through a proper regulation and supervision, chain pharmacies would welcome their
advantages and reduce their disadvantages.

8. There are pharmacies who are offering generic medicines are struggling in outperforming
the leading brand in pharmaceutical industry, now there are also pharmacies and
drugstores who are selling the same product.

V. Findings on the Case Study

1. Generika Drugstore is now widely operating across islands and regions here in
Philippines.
2. One of their newest established branches was located in Dapitan Ciy.
3. Since they are new to the place and surrounded by its competitors, the number of their
customers are only few resulting into small number of sales. But as days goes by, number
of consumers is increasing.
4. People eventually recognized the affordability and quality of their products, the quality of
services rendered by the staffs and knowing that Generika Drugstore is one of the leading
drugstores in the Philippine pharmaceutical industry. And this may also partly cause in

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 offering some medical consultations and tests which are very affordable that some who
could not afford to go to hospitals can take the opportunity.
5. The GD has provided to those who need access to affordable quality medicines, that
ensure the quality of the products they are selling, and they have also prioritized the
proper handling and storage.
6. Their stores have the good air conditioning system that maintains the efficacy and
potency of medicines they carry.
7. And they have the good interaction with customers that creates more competitive
advantage.

In applying with all those mentioned strategical approach, Generika will surely win the
minds and hearts of the Filipino people.

VI. Conclusion
It always seems that every business should really have to encounter problems in order to
grow and be tougher. In business, it’s not just about earning profit, it’s also about being socially
responsible. For a drugstore and pharmacy, their concern must always be for the health care of
the consumers. In the case of Generika Drugstore, they were really conscious with their
consumers’ health that is why, until this present year, they still continuing to expand and is now
reaching here in Dapitan City. They’re always promoting affordability, high quality, and safe
generic medicines. They were also working on transforming of minds and saving of lives to
continue elevate Filipinos’ acceptance to unbranded medicines. They value those people who
patronizes and made them grow for years. We, Filipinos are lucky with the existence of
Drugstores because they are the one who improves safety medication and gives proper
prescription of medicine. But it is not always taking medicine to be healthy, because medicines
are just use as treatments not improving our health status. And we should always believe that
prevention is always better than cure.

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Assistant Pharmacist RITA C. INSONG

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VII. References
Lean Method, Top ten problems faced by business.
https://www.leanmethods.com/resources/articles/top-ten-problems-faced-business/

Altruist Group Co., Business Challenges. http://www.tmpwdirect.com/case-

studies/business-challenges/

The Pharmaceutical Industry.

https://www.academia.edu/6832311/Unilab_Case_Study

ABS-CBN News, 2018, Generika Drugstore generic medicines as cheaper alternative

to branded pharmaceutical products. https://news.abs-cbn.com/business/09/21/18/how-
generika-drugstore-convinced-filipinos-to-buy-generic-medicines

Company Overview: Actimed Inc. (Generika Drugstore Chain).

https://www.jobstreet.com.ph/en/companies/492637-actimed-inc-generika-drugstore-chain

(FrogDog, 2018), Research: Marketing into the Pharmacy (Trends Affecting

Pharmacy). https://frog-dog.com/research-marketing-pharmacy/

https://www.firstresearch.com/Industry-Research/Drug-Stores.html

https://www.firstresearch.com/Industry-Research/Drug-Stores.html

https://www.ajhp.org/content/ajhp/early/2016/11/18/sp170001.full.pdf

https://www.firstresearch.com/Industry-Research/Drug-Stores.html

https://www.firstresearch.com/Industry-Research/Drug-Stores.html

https://www.firstresearch.com/Industry-Research/Drug-Stores.html

https://www.firstresearch.com/Industry-Research/Drug-Stores.html

https://www.firstresearch.com/Industry-Research/Drug-Stores.html

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 https://www.firstresearch.com/Industry-Research/Drug-Stores.html

https://www.firstresearch.com/Industry-Research/Drug-Stores.html

https://www.firstresearch.com/Industry-Research/Drug-Stores.html

https://www.firstresearch.com/Industry-Research/Drug-Stores.html

(National Academy of Sciences, 2013), Weaknesses in the Drug distribution chain.

https://www.nap.edu/read/18272/chapter/7

(WHO Consultative Group, 1993), The role of the Pharmacist: Quality

Pharmaceutical Services – Benefits for Governments and the Public (Community
Pharmacy) http://apps.who.int/medicinedocs/en/d/Jh2995e/1.6.2.html

Iran J Pharm Res. 2014, Chain drugstores: Opportunities and Threats.

https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4177635/

Diana Fernholz, 2012, Case Study Highlights, The Generics Pharmacy.

https://healthmarketinnovations.org/blog/case-study-highlights-generics-pharmacy

Fred M. Eckel, 2013, Five Major Issues Facing Pharmacy.

https://www.pharmacytimes.com/publications/issue/2013/december2013/five-major-issues-
facing-pharmacy

Facts On Generic Drugs to Meet Out Worldwide Challenges for Implementing

Generic Medicine Related Policies of Health Schemes. http://ijpsr.com/bft-article/facts-on-
generic-drugs-to-meet-out-worldwide-challenges-for-implementing-generic-medicine-related-
policies-of-health-schemes/?view=fulltex

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 CURRICULUM VITAE

ELVEN PACTURAYAN BARNAYJA

Bachelor of Science in Accounting Technology
Contact Number: 09066637899
Email Address: 1998elven@gmail.com

PERSONAL DATA
Age : 20
Sex : Male
Date of birth : January 05, 1998
Place of Birth : DJRMH, Dapitan City
Civil Status : Single
Address : Opao, Dapitan City

FAMILY BACKGROUND
NAME OF THE PARENTS ADDRESS OCCUPATION
Benedicto Pacada Barnayja Opao, Dapitan City Carpenter
Elena Awid Pacturayan Opao, Dapitan City Housekeeper

EDUCATIONAL ATTAINMENT:
LEVEL SCHOOL YEAR
Elementary: Opao Elementary School 2005-2011
Secondary: Potungan National High School 2011-2015
Tertiary: Jose Rizal Memorial State University 2015-present

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 CURRICULUM VITAE

MARIFEL P. RUBI
Bachelor of Science in Accounting Technology
Contact Number: 09397764907
Email Address: marifelrubi@gmail.com

PERSONAL DATA
Age : 19
Sex : Female
Date of birth : July 23, 1999
Place of Birth : San Vicente, Gutalac Zamboanga del Norte
Civil Status : Single
Address : San Vicente, Gutalac Zamboanga del Norte

FAMILY BACKGROUND
NAME OF THE PARENTS ADDRESS OCCUPATION
Elito Samoramos Rubi San Vicente, Gutalac Z.N. Barangay Secretary
Maribel Intawon Pabes San Vicente, Gutalac, Z.N. Housekeeper

EDUCATIONAL ATTAINMENT:
LEVEL SCHOOL YEAR
Elementary: San Vicente Elementary School 2005-2011
Secondary: Gutalac National High School 2011-2015
Tertiary: Jose Rizal Memorial State University 2015-present

33
 CURRICULUM VITAE

NICKIE C. PAHULAS
Bachelor of Science in Accounting Technology
Contact Number: 09465002649
Email Address: nikkipahulas@gmail.com

PERSONAL DATA
Age : 21
Sex : Female

Date of birth : December 26, 1997

Place of Birth : DJRMH
Civil Status : Single
Address : Cawa-cawa, Dapitan City

FAMILY BACKGROUND
NAME OF THE PARENTS ADDRESS OCCUPATION
Rico Patalinghug Pahulas Cawa-cawa, Dapitan City
Madonna Canillo Certifico Cawa-cawa, Dapitan City Housewife

EDUCATIONAL ATTAINMENT:
LEVEL SCHOOL YEAR
Elementary: Dapitan City Central School 2005-2011
Secondary: Dapitan City National High School 2011-2015
Tertiary: Jose Rizal Memorial State University 2015-present

34