News & Insights
The Road to Sustainability: Lessons Learned from Connecting Rural Families to Affordable Medicines
by Lara Diaconu, vice president, Health Services Fund
A bit of background...
Global Partnerships’ Health Services Fund first began to learn about COMIXMUL’s community pharmacy initiative in early 2012. COMIXMUL had already been implementing this initiative with non-GP donor funding for a couple of years. Initially, their priorities were to scale (expanding to 200 sites) and drive impact (improving access for remote communities to lower cost medicines).
While they were able to achieve both of these, they were not able to make it sustainable. In other words, income generated from the sale of medicines was not enough to cover operating costs. Nor was it sufficient to restock medicines in a timely way. The latter made it difficult to gauge the potential for income generation. Moreover, because the initiative had always been subsidized from several sources of funding, COMIXMUL did not know how much it really cost them to implement the community pharmacy initiative.
Re-envisioning COMIXMUL's community pharmacy program
With COMIXMUL's existing donor support drawing to an end, both GP and COMIXMUL recognized the opportunity to achieve impact by identifying and refocusing management systems on sustainability. Our goal, working alongside COMIXMUL, is to provide long-term access to essential medicines to remote families in low-income communities by ensuring the pharmacy program reaches 100% sustainability so that philanthropic funding is no longer needed. In January 2013, Global Partnerships invested $130,000 in grant capital to restart the community pharmacy initiative, piloting a refreshed business model that included:
• Comprehensive cost model with target monthly sales result per pharmacy site, to enable more responsive management decisions;
• More efficient logistics to guarantee monthly supervision visits of each site, to ensure timely re-stocking and regular support to pharmacists;
• Consolidation of the medicines inventory list, to stock those items that were in higher demand; and
• Introduction of an incentive for volunteer pharmacists, to improve performance and transparency.
Where are we now?
Even though all 200 sites were not fully stocked until mid-April, as of October the initiative attained 69% operational sustainability. Over 5,300 households have made 19,500 purchases in 2013, saving time and money by purchasing lower cost generics from a trusted neighbor instead of buying from the nearest commercial alternative. Results from 2013 (in USD), compared with prior years, look like the following (click images to enlarge):
What did we learn?
1. We now have a much better idea about the demand side – what volume of medicines can reasonably be sold, and what markup is therefore required to achieve sustainability;
2. Thanks to an information system that tracks sales per site as well as inventory, COMIXMUL was able to identify and relocate 38 non-performing sites in August, as well as to orient subsequent purchases to those medicines in higher demand;
3. We learned from the sales data that the profile of the pharmacist (i.e. trustworthy, friendly, highly-respected) has a much greater impact on performance than the size of the community where the pharmacy is located, and we used this information to refine the profile for future site/pharmacist selection. For example, the community pharmacy in El Rincón has shown strong sales despite being located in a rural area with a population size that is below the average.
4. Monthly supervision visits were important to keep the sites stocked, and also to detect the need for a broad-based marketing campaign to raise awareness about the existence of the rural pharmacies and the significance of generic medicines;
5. The importance of marketing was affirmed by a significant bump in sales following August-September campaign.
Initial donor funding was needed to launch this innovative program and refine it to the point of sustainability. Based on results achieved in the last quarter, we are confident that it is possible to achieve financial sustainability, as well as scale and impact, across COMIXMUL’s 200 rural pharmacies in 2014. We are still collecting year-end insights from 2013, and developing this year’s projections, but look forward to seeing COMIXMUL sustain its promising results.