Without An Online Platform Pharmacies Will Lose

Currently, four serious providers are competing for dominance in the platform market for pharmacies. The mail-order pharmacy Pharma Store is expanding its business field and wants to bring stationary pharmacies together with patients on its new platform. The company is not alone in this; other providers are also planning or already have an open marketplace for trading pharmaceutical products. Stationary pharmacies should seize this trend as an opportunity, otherwise they would lose out.

The online pharmacy market is steadily increasing. While the share of prescription medicines in the mail-order business is still below one percent, more and more patients are buying their over-the-counter products on the internet. This leads to declining sales for stationary pharmacies. And this situation will be exacerbated by the planned introduction of the electronic prescription. Sweden shows where the journey could lead: Here, the online sales of prescription drugs is already more than ten times as high as in Germany. If a similar development takes place in Germany, this will further accelerate the decline in the number of offline pharmacies.

The planned pharmacy platforms would offer a way out of this misery. For many stationary pharmacies, they are the only realistic possibility to participate in the growing online market. However, this comes at a price: platform providers retain part of the margin and get access to customer and sales data. In addition, price pressure will continue to increase due to rising price transparency.

Nevertheless, there is no alternative: online platforms represent the only chance for stationary pharmacies to prove themselves in competition, to avoid major sales losses and to catch up with the digital age. Pharmacy platforms will assert themselves on the market in the long run – those who do not play along will have a very hard time in the medium term.

One has to reckon with the fact that in the end only one or two providers will remain in the platform competition: this is what experience from other markets shows. Consumers would not want to register on many platforms. No one knows who will emerge victorious from the platform battle. But there is one central criterion for success: reach, reach, reach, both with patients and with the connected pharmacies. Just offering many pharmacies is not enough.

Platforms with wholesaler involvement could build on their good relationships with pharmacies, but Pharma Store has the customers on its side. Pharma Store, on the other hand, can rely on its high profile and large customer base. Therefore, there is a good chance that Pharma Store will end up as one of the platform providers on the market in Sweden.

However, the competition could change completely if Amazon enters the race beyond the marketplace itself. It would be very surprising if Amazon, as a pharmacy, does not enter the lucrative European pharmaceutical market sooner or later. Amazon has already applied for licences in various markets. In Germany, too, Amazon has already registered Amazon Pharmacy as a pharmacy brand with the German Patent and Trademark Office.

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