too much for the public. Coming as it did after a 15-year effective moratorium on drug price increases, that change was considered welcome by the industry. But the structural problem is this: the government sets both the retail price as well as the retailers’ margins, which effectively means able to receive a price between 20% and 25% below the retail price, which means that the entire supply chain operates on margins contained in that 25% margin. 15% is taken up by the retail sector, with distributors and wholesalers splitting the remaining 5-10%. About 1-3% of that goes to wholesalers, and the rest is taken up by distributors. Wholesalers, in Furquan’s view, are the source of much of the industry’s problems. wholesale stage of the supply chain is where counterfeiters are entering the market,” said volumes to become big enough to deal directly with manufacturers and distributors, and then sell the product directly to consumers, it would be able to cut out the retailers and wholesalers in the supply chain, creating a 15-18% gross margin for itself to begin with, and one that could grow as it continued to disintermediate even the distributors. While willing to disclose details about their familiar with the matter say that the company is growing at a rapid clip, and already commands a sizeable proportion of the market. and more manufacturers directly, a process that seems daunting when one considers the fact that there are 775 pharmaceutical manufacturers in the country. However, of those, the top 15 have an the total revenue of the industry, meaning the challenge of ensuring an adequately supplied online pharmacy is a little less demanding than all of which are rented, in four cities across of third-party courier services as well as its own riders to provide its services. beginning to catch up with its own growth: they were not able to get their medicines at so much that it had trouble keeping pace. According to Furquan, that problem appears to be resolved as its distribution infrastructure is How online pharmacies can shake up the market H ow does this matter to consumers? three layers of middlemen, it can offer more competitive prices to consumers while at the same time guaranteeing quality in a way that most small retailers cannot. Prices are already low in Pakistan, so affordability is unlikely to increase much given eliminating counterfeits from the supply chain is likely to improve healthcare outcomes, particularly for low-income segments of the population, who are more likely to not have access to the larger retailers that offer a more reliable quality of drugs. development of pharmaceutical drugs takes place largely in the United States, a healthcare system that is so hospital-heavy that the focus on drug development has been on trying to treat using drugs some conditions that currently COVER STORY
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