The Generic Pharmacy
The Generic Pharmacy is very successful pharmacy distribution system organized along the lines of a franchise network. The combination of the for-profit motive with concern for catering to the needs of the poor makes The Generic Pharmacy truly innovative.
In the beginning business model of Pacific Insular Co. Inc (former name of The Generic Pharmacy) was pretty much common for this market – importing and distributing branded pharmaceutical products to big-volume buyers. But intrusion of large international companies to the market of branded medicines made The Generic Pharmacy look for new product or market to stay competitive. Bet was placed on generic drugs, produced mostly at local small to medium-sized manufacturers. It eliminated exchange rate risk and eliminated need in import logistic costs. Having portfolio of approximately 500 types of drugs covering the spectrum of major illnesses seen in Philippines makes retail outlets suitable for any location. Although inexpensive generic drugs are usually perceived as low-quality product it’s the only choice for low-income individuals and senior citizens. Accounting that 45% of Philippine population lived on or under $2 a day and cannot afford expensive branded drugs this market is pretty big. Of course the revenue from each product sold is 5 to 10 times less in comparison with typical branded drug store that imposes some restrictions on organization. To avoid high risk and put down cost of large retail network (and only large amount of drugs sold can make all this idea profitable) Liuson made decision to use concept of franchise.
Moving to generic drugs and franchise network for retail in highly competitive market is perfect example of Blue Ocean Strategy and current situation with more grow from 1 to 1500 outlets of The Generic Pharmacy from start in 2007 to 2013 proves that this strategic choice was right.
Since The Generic Pharmacy’s splashing success, other companies with the same