After a period of several years when they were concerned with relocation and profitability, drug retailers have resumed the aggressive expansion they had experienced ahead of the crisis.
“Business development is a normal step for any sound operation. For Sensiblu, pharmacy openings and the takeover of the Farmaplanet network were normal steps to follow in order to reach our business goals,” said Robert Popescu, chief executive officer of A&D Pharma, the largest domestic group in the drug industry.
A&D Pharma owns the Sensiblu network, which has 290 pharmacies, from 240 in early 2011.
By taking over the 24 Farmaplanet pharmacies, Sensiblu inked the first major deal in recent years on this market, considering major companies have not rushed so far to buy tens of pharmacies bundled together or to be taken over in their turn.
Except for the Pharmaplanet takeover, deals sealed so far have involved either a single pharmacy, or a very small number of pharmacies. Acquisitions are one of the few ways networks can grow, since the law sets a maximum number in each city or town.
The low growth rate the pharmaceutical market, 5.5%, posted in the first four months of the year, and the long periods, of over 300 days, after which pharmacies get their money back from the insurance house for the free or compensated drugs released, may make the strong expansion of the first half seem surprising.
However, the networks, most of which also have wholesalers behind them, stand to profit from the fact that independent pharmacies are struggling. Further acquisitions are expected in the coming period as system conditions will not change.
Another phenomenon explaining networks’ rush to expand has to do with the tendency of consumption shifting to generic drugs, and pharmacists can influence the decision to buy these products.
At the top of the ranking, Sensiblu and Catena and fighting for the title of the network with the highest number of retail pharmacies. At present, Sensiblu has 290, while Catena says it has 283. Expansion in the second half of the year will be crucial for these companies.
Should retailers keep up this pace of expansion, chains of 800-900 pharmacies may be opened in several years.