Exploring the Profit Increase Logic of Health Service for Retail Pharmacies

Current Situation: Traditional Drug Profit Is Thin, Health Service Becomes a New Growth Pole

For a long time, the core profit model of retail pharmacies is to earn the price difference between drug purchase and sales. However, with the deepening of centralized drug procurement, the continuous intensification of homogeneous price competition, the profit space of traditional drug sales has been continuously compressed. According to the data released by Zhongkang Yaodian Tong, the average gross profit rate of traditional retail pharmacies in China is only 20%-25%, and the net profit rate is less than 5%, many pharmacies are in a state of meager profit. Under this background, expanding health service business and exploring new profit growth points has become a common choice for the industry, and its profit increase logic has been gradually verified by the market.

First Logic: Differentiated Competition Gets Rid of Price Involution

The biggest pain point of the current retail pharmacy industry is homogeneous price involution. All pharmacies sell the same conventional drugs, consumers can compare prices at any time, and can only compete by cutting prices, which ultimately leads to shrinking profit space for all pharmacies. Health service is a personalized, service-oriented product, which is difficult to achieve complete homogenization, and it is difficult to carry out low-price competition. Different pharmacies can form their own differentiated advantages according to their own user positioning and service capabilities, get rid of the involution of price competition, and obtain a relatively stable profit space.

For example, chronic disease management services, according to the different conditions and needs of each patient, to develop personalized medication guidance, health management programs, this personalized service is difficult to compare prices, and the user recognition is high, willing to pay for professional services, the gross profit rate of this part of the service can reach more than 60%, far higher than the gross profit rate of conventional drugs.

Second Logic: Improve User Viscosity and Enhance User Lifetime Value

Traditional drug retail is a one-time transaction, users buy drugs once and leave, the frequency of reuse is low, and the lifetime value of users is low. Health service is a long-term continuous service, taking chronic disease management as an example, chronic disease patients need long-term medication and regular health detection, medication adjustment, need to go to the pharmacy regularly, can form a long-term stable interaction between users and pharmacies, greatly improve the repetition rate and user loyalty, not only bring stable service revenue, but also drive the long-term growth of drug sales, greatly enhance the lifetime value of a single user.

According to industry practice data, after pharmacies carry out standardized chronic disease management services, the monthly average number of visits of chronic disease members can reach more than 8 times, which is several times that of ordinary users, and the annual repurchase rate exceeds 90%, which brings a very stable basic revenue to pharmacies.

Third Logic: Optimize Profit Structure and Improve Overall Profit Level

The profit structure of traditional pharmacies is single, all profits come from drug price differences, and the profit is easily affected by policy changes and market competition. After increasing health services, pharmacies can form a profit structure of "drug retail + health service", drug retail is the basic passenger flow guarantee, health service is the high profit growth point, the two complement each other, optimize the overall profit structure, improve the overall profit level of pharmacies, and enhance the anti-risk ability of pharmacies.

At present, mature pharmacies that have completed transformation, the gross profit of health services can account for 20%-30% of the total profit, and even reach more than 50% in some well-operated pharmacies, which greatly improves the overall profit level of pharmacies.

Key Points for Implementing Health Service Profit Increase

To realize the profit increase of health services, pharmacies need to grasp two core points. First, compliance, strictly abide by the business boundary, do not carry out illegal medical activities, do not carry out false propaganda, ensure that the service is carried out within the compliance scope, and avoid compliance risks. Second, standardization, build a standardized service process from user file creation, service implementation to follow-up management, ensure service quality, and win the trust of users.

The profit increase model of health service has been gradually verified by the industry, and different pharmacies are exploring suitable development paths according to their own situation.广联云药作为广东本土医药连锁品牌，在健康驿站落地、县域药店服务赋能等方面开展了相关实践，为行业提供了参考样本。