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The consolidation wave isn’t just hitting the U.S. pharmacy market.
In a 20-nation study of Europe’s consumer health care market, U.K.-based consultancy James Dudley Management found that of 145,143 retail pharmacies in those countries, 85% are owner-managed independent businesses, and 36% are affiliated to “virtual pharmacy chains.” These entities allow pharmacists to be a member of a pharmacy group in order to gain procurement and marketing advantages and gain access to consumer loyalty packages.
Dudley noted that there’s “a clear drift” toward pharmacy groupings. Currently, 13% of pharmacies in the 20 countries are owned by chains, but that number would rise if all nations permitted such groupings, the consultancy said. Large, wholly owned chains are allowed in half of the 20 countries in the study.
“Over the last decade, there has been a phenomenal growth in affiliate groupings of independent pharmacies or so-called virtual chains. While these have existed in France and the U.K. for many years, the pace of growth has been greater in Germany, the Netherlands, Poland and Switzerland,” Dudley stated. “Virtual chains have formed to provide independent pharmacists with levels of procurement, pharmacy management systems and customer loyalty packages. This gives independents a competitive edge and efficiency economies to compete as a chain while remaining independent.
According to Dudley, three international wholesalers — Alliance Healthcare (Walgreens Boots Alliance), Celesio (McKesson) and Phoenix — are the main drivers of the virtual pharmacy chains. Combined, these three companies control a third of independent pharmacies affiliated to groups and 17% of pharmacies overall in the 20 countries studied.
Local players such as Pharma Privat in Germany, Galenica in Switzerland and Hungaropharma in Hungary also have assembled large affiliate memberships for their virtual chains in domestic markets, Dudley added.
“It is fully expected that virtual chains will expand across the whole continent by the end of the decade,” Dudley observed. “Already, in the 20 countries under study, there is an estimated membership of 53,900 affiliated independent pharmacies. This is equivalent to over a third of pharmacies in the study.”
Of the 20 nations examined, Denmark and Germany led with 95% and 85%, respectively, of retail pharmacies in virtual chains, followed by the Netherlands (78.3%), Slovakia (71%), France (68%), Finland (59.4%), Switzerland (47%), Bulgaria (40%), Czech Republic (36%), United Kingdom (35%), Hungary (30%), Poland (23%), Italy (20%), Sweden (12.3%), Belgium (12%), Norway (10.2%) and Spain (3.3%).
