Big firms' entry shakes up medicine retail

With domestic corporate giants such as Reliance Industries (RIL), Ranbaxy group-promoted Fortis HealthWorld and international drug retail majors such as Medicine Shoppe planning a big presence in the country's Rs 50,000 crore drug retail sales business is set to see a lot of action.

Corporatisation of drug retail shops is catching up so fast that even traditional medicine sellers, grouped under the All India Organisation of Chemists and Druggists (AIOCD), have been driven to restructure their business model.

While RIL is believed to be considering 1,000 retail drug outlets in three years, Fortis HealthWorld has already announced its plans to invest Rs 800 crore over five years to set up 1,000 retail health stores across 400 cities of the country.

Apollo, Medicine Shoppe, Lifeken, Global Healthline's 98.4 degree, CRS Health, Health Glow from RPG and Subhiksha are some of the existing pharmacy chains.

Adding to the list are region-specific pharmacy chains such as Gurgaon-based Guardian Lifecare with 65 outlets in and around Delhi. Guardian is planning to invest Rs 100 crore to set up a chain of 150 retail pharmacy outlets in north and east India in a year.

Since new-age pharmacy chains are all set to eat into the profits of the five lakh-odd conventional drug retail outlets, the AIOCD has decided to corporatise their operations by building a pan-India drug retail chain brand by enrolling AIOCD members as shareholders of state-specific companies that are under various levels of registration.

The organisation has appointed Ernst & Young as consultant to guide small drug retailers through the transition process. "We have asked the consultant to make sure that the AIOCD's corporate plans begin to materialise from June 1," AIOCD President A N Mohan said.

Interestingly, the new-age pharmacy stores have more in store than conventional medicine retail outlets. For instance, Guardian Lifecare offers a range of prescription and OTC medicines, food supplements, toiletries, skin care, mother & baby care products and self-diagnostic equipment such as glucose monitors, blood pressure monitors etc.

Besides, it has a tie-with the US-based nutraceuticals and food supplements major General Nutrition Centre for exclusive supply of its vitamin and health products.

"The need for professional pharmacy services is becoming crucial these days. With the kind of central procurement system we have, there is absolutely no chance of any spurious drugs entering our supply chain. We have value-added services such as privilege cards for our customers," Ashutosh Garg, chairman and managing director, Guardian Lifecare, said.

Fortis stores are also positioned in a similar manner, though there are unique value additions such as telemedicine facility and a pathology centre.

"The centre will function as an e-link to other healthcare businesses of Fortis "� Fortis Hospital chains and pathology labs under SRL Ranbaxy brand," Fortis HealthWorld CEO Ashish Kirpal Pandit said.

Some of the value additions offered by new-age drug outlets are prescription reminder services, loyalty programmes, OPD appointments, round-the-clock operations and free home delivery, among others.