High profile pharmacy stores, initiated by Medicine Shoppe a few years ago, are spreading fast across the country threatening to overshadow traditional medical shops with no air conditioning and pharmacists at the counter. This trend has also given a boost to the profession of pharmacists in the process.

International retailers have recognized the opportunity available here and quite a few retail pharmacy chains are coming into the country. Apollo Pharmacy, Medicine Shoppe, Dial for Health, Health & Glow, Guardian Lifecare, Himalaya and Global Healthline are already major names in the Indian drug trade scene today and are planning major expansion of their operations.

According to the Retail Druggists and Chemists Association, there were roughly 10,000 distributors and 1.25 lakh retail chemists in India in 1978. The number of distributors has increased six-fold, and retail outlets have increased five-fold in the last two decades.

Since the Subiksha Retail Services Pvt Ltd., which at present operates 19 retail outlets in Chennai, started the first Indian retail pharmacy chain, several other players have entered the business. The cash rich retail drug chains stress on setting up high quality infrastructure in the stores, besides offering value added services and various schemes to attract the customers. Offering of free laboratory services and health check up camps for customers by tying up with pharma companies and pathological labs are another ideas introduced by the new generation pharmacies to woo customers. Some of them provide free accidental insurance and "Mediclaim" policies as rewards to the loyal customers. Some registered customers also get discounts at various hospitals, pathological labs and other health institutions.

Most of these shops offer various products and FMCG goods other than drugs under one roof. Free delivery of drugs at home has become the hallmark of the changing phase of pharmacy practice in most towns. These chains also convey to the customers that they sell only high quality medicines, at affordable prices.

Medicine Shoppe, the largest retail drug chain in the world, already having 100 outlets in the country, is in the process of investing Rs 500 million to make it a 500-outlet retail chain in India by 2009. Speaking to Pharmabiz, Rajendra Gupta, Director, Medicine Shoppe, India, said, "We follow certain standard guidelines. People can trust the quality and safety of medicines from the organised pharma shops. Besides selling all kinds of genuine medicines through Medicine Shoppe's ISO 9001:2000 certified pharmacies, we offer lot of value added benefits and services to our customers. Every Medicine Shoppe store maintains patient's record," he notes.

Those who support the cause of organised pharma chains allege that spurious medicines still contribute 25% in the total market and the concept of quality medicines through these stores could weed out such drugs. Further, these shops are able to make available many expensive super specialty drugs which require specific storage conditions, normally not available in conventional medical stores.

The mushrooming of new generation drug stores has created a stiff competition among the chemists and druggists in the country. "Not only the local chemists and druggists, the overall retail business has been affected by this increase in number of outlets. Though these international players entering the business of retail pharmacy do not have anything different to offer than what we already have, they have managed to attract the customers with their trade gimmicks and money power. To fight this challenge, we have already started conducting seminars to educate and update the community pharmacists about the trends in international pharmaceutical trade. We are upgrading local chemists shops according to the standards set by the organised pharma retail shops," says Anil Navender, MSCDA.

He notes that the medicines have fixed prices and customers do not choose the medicine according to their wish, but as per the doctor's prescription.

The drug retail market is very competitive and crowded with more than 5.5 lakh pharmacy outlets. Together, they account for 80 per cent of the pharma market. "We are not worried about competition, but what is disturbing is the financial muscle of these retail giants and their dictatorial style of operations which is creating unhealthy competition," says a representative of the All India Association of Chemists and Druggists.

Though consolidation in drug distribution is still at a very formative stage, industry observers are encouraged by corporatisation of retail trade. "Corporatisation would lead to elimination of at least one layer of distribution. This would enable companies to offer higher margins to retailers. Consumers too will benefit, as drug companies would be in a position to pass on the benefits to consumers. Corporatisation of trade would mean fewer players. This would improve administration and enhance customer relationship," says a distribution head of a leading Indian company.

Healthcare giant Apollo Hospitals has established a formidable network of 300 stores under the Apollo Pharmacy brand, mostly in south India. Another healthcare major, Bangalore-based Himalaya Drugs is also on a major expansion spree in the retail sector. The company recently opened its exclusive retail store in Bangalore and is planning an aggressive expansion. It has just signed up with Reliance Retail to set up its Himalaya Herbal Healthcare stores at the new malls, hypermarkets and supermarkets that Reliance plans to set up shortly. Retail major Pantaloon is also planning to enter the retail pharmacy trade.

According to Subrata Dutta, business head, consumer division, Himalaya Drug Company, consumers today are far more discerning. Along with quality products they are also looking for ambience and convenience in shopping. The company outlets have been designed keeping this in mind.

Shoppers at its stores can browse through the vast range of its products at the stores, while executives at the company information centres, reply their queries. Importantly, the stores are also electronically linked to a CRM cell, and aided by a team of doctors who answer specific health queries of customers.

Himalaya has tied up with several other retail majors including Big Bazaar, Spencers, Nilgiris, Shoprite, D'Mart, Giant, Vishal Mega Mart, Lifestyle and Big Shopper. It has also gone in for tie-ups with other organised retailers of pharma products, including Apollo Pharmacies, Medicine Shoppe, Pill & Powder, CRS Health, Health & Glow, Guardian Lifecare and Global Healthline, with its chain of '98.4 degrees' stores.

Guardian Lifecare, one of the fastest growing organised retail chains plans to have 500 stores in just about two years time. The company has also joined hands with the DCM Shriram and set up its 'Aushadhi' chain of rural pharma retail stores.

Companies like Guardian Lifecare and Medicine Shoppe see huge opportunities in the rural areas, where healthcare facilities are minimal. While the rural poor would obviously go to the public healthcare facilities, the affluent are woefully under serviced at present.

Organised pharmaceutical retailers are also focusing on the higher-end of the urban market. Says Gandhi of Medicine Shoppe, "Most companies today sell super specialty drugs directly as storage conditions and high costs of the drugs and returns policy are big blocks for ordinary retailers. And since these drugs are expensive, there is a high incentive for counterfeiters".

Pharma retail outlets have constantly supported the Indian trade through marketing support, international collaborations, training, business strategy inputs and exchanges of executives for exposure of work practices and culture.