COMMUNITY PHARMACY MANAGEMENT: A TEACHER’S COMPREHENSIVE GUIDE
Welcome, future pharmacists and healthcare professionals!
Community Pharmacy Medicines Management (CPMM) is a unique concept that aims to introduce a structured intervention process among the community pharmacist, the patient, and the general practitioner. The whole study is based on Randomised Controlled Trial (RCT). The managerial activities that involve planning, decision-making, organising, staffing, directing, and controlling are useful in the management of a setting. Success of a community pharmacy depends on three factors, i.e., its location (site), proper layout, and design.
Dpharmguru’s exam insights:
In my years of teaching community pharmacy management, I have observed that students often overlook the importance of proper planning and management. Remember: A well-managed pharmacy is not just about dispensing medicines—it is about running a successful business while providing quality patient care. This is a key topic that frequently appears in exams!
LEGAL REQUIREMENTS TO SET UP A COMMUNITY PHARMACY
Legal Requirements for Retail or Wholesale Drug Store
1. Licenses
General Licenses: These licenses are granted to an individual having premises for the business and who may employ or may himself be a qualified person to supervise the sale of a drug store. Form 20 deals with license for retail sale of drug store, other than those specified in schedule C, C1, and X. For drug specified in schedule C, C1 excluding those specified in Schedule X is governed through form 21 and for Schedule X in 20F.
Restricted Licenses: These licenses are granted for the restricted sale of drugs other than those specified in Schedule C, C1, and X and those specified in Schedule C and C1, excluding X are governed by the form 20A and 21A, respectively.
2. Minimum Qualifications
A registered pharmacist with State Pharmacy Council is eligible to open a retail drug store; and for getting registered with the State Pharmacy Council, the minimum qualification is Diploma in Pharmacy procured from a recognised institute. Matriculation with a four year experience of selling drugs at a chemist shop on salary basis or Diploma in Pharmacy along with registration as a ‘Registered Pharmacist’ is the minimum requirement for opening a wholesale drug house.
3. Minimum Space
The Drugs and Cosmetics Act and Rules, 1945 has not mentioned any minimum area for opening a new retail or wholesale drug store; but 10 sq. metre area is considered as the minimum requirement, while 15 sq. metre area is the minimum requirement for opening a new combined wholesale and retail drug store.
4. Store Arrangements
A sufficient number of racks should be available for storing drugs and pharmaceutical preparations. A refrigerator is required for storing antibiotics, vitamin products, vaccines, sera, and enzymatic preparations at 2-8°C temperature.
Documents Required to Open a Retail Drug Store
- Application (in duplicate) on Form 19 of the Drugs and Cosmetics Rules, 1945
- Fee of ₹1500 per license (total ₹3000) to be submitted in State Bank of India or Government Treasury
- Attested copy of Diploma in Pharmacy certificate
- Attested copy of registration certificate issued by the State Pharmacy Council
- Affidavit on non-judicial stamp paper
- Map of the retail drug store signed by the proprietor or partners
- Rent receipt or affidavit if the person himself is the owner of property
- Copy of the partnership in case of partnership
- Receipt of purchasing refrigerator
Dpharmguru’s exam insights:
A common exam question is: “What are the legal requirements to set up a community pharmacy?” Remember: Licenses, minimum qualifications, minimum space, and store arrangements. Also, remember that Form 19 is used for application. These are frequently tested!
SITE SELECTION REQUIREMENTS
Classification of Sites
Geographic Site: Rural or Small Town (near highway, railway station, bus stand) and Urban Town or Big City (near transport facilities, densely populated residential areas).
Functional Site: Suscipient Site (hotel, airport, resort area), Interceptive Site (near doctor clinics, large office buildings), and Generative Site (shopping centres, outlaying retail stores).
Factors Affecting Site Selection
- Physicians: Around 70% businesses are originated by prescriptions of more than 3 physicians
- Hospitals: Suitable location if hospitals do not have their own drug store
- Competition: Opening away from competitor is preferred, but high potential areas can be shared
- Parking: Adequate space for parking in shopping centres
- Near to Hotel, School, Cinema House, or Play Ground
- Business Locality: High rent but large number of visitors
- Thickly Populated Residential Areas
- Developing Areas: Ideal location with no competition initially
PHARMACY DESIGNS AND INTERIORS
Types of Drug Store Designs
- Pharmaceutical Centre: Well decorated with good atmosphere, separate room for orthopaedic and surgical appliances
- Prescription-oriented Drug Store: Comfortable waiting area, health related items displayed near the vicinity
- Traditional Drug Store: Pleasing appearance, professional atmosphere, convenience for employees and customers
- Super Drug Store: 5,000 – 10,000 sq. ft. with square design, self-service style
- Personnel Service Drug Stores: Customer interacts with personnel at the service counter, maximum interaction
INVENTORY CONTROL
Inventory denotes “stock of goods”. The procedure of handling inventory of medicines, chemicals or drugs so as to fulfil the demand of the customers at comparatively lower prices and with less amount of investment is called inventory control.
Inventory Control Methods
1. ABC Analysis
In material management, the system of evaluating the drugs that are present in the stores on their cost price is known as ABC Analysis.
| Category | Percentage of Items | Percentage of Rupee Value |
|---|---|---|
| A (Highest annual usage) | 10-20% | 70-80% |
| B (Moderate annual usage) | 10-20% | 15-20% |
| C (Low annual usage) | 60-80% | 5-10% |
2. VED Analysis
- Vital (V): Necessary for the life of the patients (e.g., Oxygen, Defibrillator)
- Essential (E): Comparatively less crucial (e.g., IV sets, IV fluids)
- Desirable (D): Not crucial (e.g., Vitamin E capsules, Sunscreen lotions)
3. Economic Order Quantity (EOQ)
EOQ Formula: EOQ = √(2DO/h)
Where, D = Demanded annual quantity (in units), O = Cost of ordering/placing (fixed cost), h = Cost of holding one unit
4. Perpetual Inventory System
Perpetual inventory system is a technique of recording the balance of store after every receipt and issue to ease daily checking and to avoid shutting down for stock-taking. It comprises of Bin Card and Store Ledger.
5. Lead Time
Lead time is the time gap between placement of an order and the time of actual supply.
Lead Time = Servicing time + Delivery time + Receiving time
6. Buffer Stock
Buffer Stock Formula: (Maximum daily usage × Maximum lead time) – (Average daily usage × Average lead time)
Dpharmguru’s exam insights:
Remember the inventory control methods: ABC analysis (based on cost), VED analysis (based on criticality), EOQ (balancing ordering and carrying costs), Perpetual inventory system, Lead time, and Buffer stock. These are frequently tested in pharmacy exams!
FINANCIAL PLANNING AND MANAGEMENT
Financial Statements
- Income and Expense Statements: Shows profit and loss of the drug store after a specific time period
- Balance Sheet: Shows the financial position in the form of asset and liability on a specific date
- Cash Flow Statement: Represents the movement of money into the business or out of the drug store
CUSTOMER RELATION MANAGEMENT (CRM)
The multi-dimensional process through which the organisations gain knowledge about the needs, wants, desires and buying patterns of their customers by establishing a two-way communication with them with the use of information technologies, is known as Customer Relationship Management (CRM).
Process of CRM
- Acquisition: Acquiring potential customers
- Customer Interaction Management (CIM): Building customer relationships through online and offline routes
- Customer Retention: Keeping acquired customers for longer period
- Attrition: Gradual destruction of customer loyalty
- Defection: Discontinuation of purchase by an unhappy customer
Advantages of CRM
- Increased Sales Revenues and Reduced Cost of Sales
- Increased Customer Satisfaction
- Increased Customer Retention and Loyalty
- Evaluation of Customer Profitability
- Customer Knowledge
- Customer Self-service
- Opportunity to Cross-sell and Up-sell
PHARMACY OPERATION SOFTWARES
Available Pharmacy Management Softwares
- McKesson: EnterpriseRx with automated prescription refills, drug delivery, medication adherence
- Cerner Retail Pharmacy: Strong emphasis on connectivity and data flow
- PioneerRx: Focuses only on pharmacy software development with mobile apps
- Winpharm: Large feature set in a standard software package
- PrimeRx: Customised software with multiple modules
- Micro Merchant Systems: Mobile applications and wide range of pre-built interfaces
ONLINE PHARMACIES
A pharmacy that works online and delivers orders to consumers via mail, shipping services, or an online pharmacy website is known as an online pharmacy, internet pharmacy, or mail-order pharmacy.
Advantages of Online Pharmacies
- Simple and quick way to get medicine
- Time savings
- Financial savings (up to one-third)
- Privacy and secrecy
- Greater variety of alternatives
- Drug checking procedure
- Helpful knowledge about drugs and ailments
Disadvantages of Online Pharmacies
- Inability to conduct physical evaluations
- Absence of face-to-face contact
- Patients may receive medications without a prescription
- Protection of personal and financial information concerns
Dpharmguru’s exam insights:
Community pharmacy management is an essential part of pharmacy practice. Remember: The key areas include legal requirements, site selection, inventory control (ABC, VED, EOQ), CRM, and online pharmacies. These are essential topics that frequently appear in pharmacy exams!
REFERENCES AND FURTHER READING
- Pharmacy Council of India (PCI). (2022). Community Pharmacy Management Guidelines. New Delhi: PCI.
- International Pharmaceutical Federation (FIP). (2022). Pharmacy Management Standards. Retrieved from https://www.fip.org.
- Ministry of Health and Family Welfare. (2022). Drugs and Cosmetics Act, 1940 and Rules, 1945. Government of India.
- Smith, M. C., & Wertheimer, A. I. (2021). Social and Behavioral Aspects of Pharmacy Practice. Pharmaceutical Press.
- World Health Organization (WHO). (2022). Good Pharmacy Practice Guidelines. Retrieved from https://www.who.int.
Disclaimer: This article is for educational purposes only and does not constitute medical advice. Always consult qualified healthcare professionals for medical concerns.
written by:
Dr. N. Sujith Kumar
