Financial perspective of private pharmacies in Tehran (Iran); is it a lucrative business?

Abstract

Background and purpose of the studyPharmacies as direct providers of medicine and pharmaceutical services to patients have an important role in the health status of a society. The assessment of their financial situations by healthcare policy makers is necessary to prevent any negative effects on population's health. In this study we aim to analyze the financial status of pharmacies in Tehran, Iran.MethodsThis study is a cross-sectional study based on a survey. Two-hundred and eighty-eight private community daytime pharmacies in Tehran were selected by random sampling. We used two questionnaires to collect data regarding cost, expense and income factors of private pharmacies and the significance of each of them from these selected pharmacies. The data was collected in 2011 from Tehran pharmacies. Profitability of pharmacies in Tehran, Iran was calculated in its current situation and then estimated for three defined scenarios: 1. The dispensing fee is omitted (ceteris paribus), 2. Pharmacies are prohibited from selling hygienic & cosmetic products (ceteris paribus), 3. Scenarios 1 and 2 together (ceteris paribus). These data were analyzed by using SPSS and descriptive-analytic statistics.ResultsAbout 68% of interviewees responded to our questionnaires. Our analysis indicated that the average annual costs (and expenses), income and profits of pharmacies are 73,181; 106,301; and 33,120 United States Dollar (USD), respectively. The analysis indicated that omission of dispensing fee (scenario 1) and prohibition of pharmacies from selling hygienic & cosmetic products (scenario 2) would decrease income of pharmacies to 18438 and 14034 USD/year, respectively. According to respondents, the cost (or expense) of properties and buildings, energy, taxes, delays in reimbursement by insurance companies, and renting the place of pharmacy could be considered as cost factors and prescription medicines, OTC medicines, dispensing fees, hygienic & cosmetic products, and long-term payment to pharmaceutical distribution companies as income factors, which have significant effects on a pharmacy's economy.Major conclusionsAccording to the results of this study, regarding the pharmacies' cost (and expenses) and incomes, the omission of dispensing fees for prescriptions has considerable negative effects on the profitability of pharmacies and likely on society's health.

Toward a Recognition of Key Role Players in Community Pharmacy

“…Pharmaceutical companies and distributers depend upon costumers for the power required to carry out their will. They usually use marketing strategies or offer discounts to in uence the pharmacy (29). Sometimes pharmaceutical companies use the power of patient associations and customers to persuade a prescriber or pharmacy to prescribe or sell a particular brand.…”

“…There are two kinds of main competitors arising out of the business pro le of PCPs including public and private pharmacies. More than 80% of active pharmacies in Iran are nanced privately and the excess are owned by public organizations or institutions such as medical universities or Iran Red Crescent (29).…”

From generic scheme to brand-generic scheme: Have new policy influenced the efficiency of Iranian pharmaceutical companies?

“…Some other infrastructural requirements including nondiscriminating laws supporting competition, the competitive pricing policy, the presence of international companies in the market, and full privatization of companies had to be also considered by policy makers to approach their goal. As an example, the current pharmaceutical pricing model in Iran has lead the companies to compete each other on giving more financial incentives to pharmacies to sell their products[ 17 ] which reduces their profitability and negatively affects their efficiency. A study has shown that pharmaceutical companies have also not been successful in using the potentials of branding.…”

Underlying factors influencing community pharmacies business in low- to medium-developed markets: a societal perspective

“…As for criteria to assess community pharmacy performance, local researches have studied pharmacist's satisfaction, clients' satisfaction and financial results, including costs, income and profitability. [49][50][51] Noticing this situation, the main aim of this study was to provide decision makers and pharmacy managers with a broader perspective on related issues. Table 1 Variables identified through literature review (intra-and extra-organisational factors affecting the outcomes of an organisation and criteria to assess organisational performance)…”