Only a handful of fully independent pharmacist-owned drugstores in Estonia ({{contentCtrl.commentsTotal}})

Independent Paekivi pharmacy owned by Andre Vetka
Independent Paekivi pharmacy owned by Andre Vetka Source: OÜ Marja Apteek

As of late September, Estonia had just 175 pharmacies owned by pharmacists that meet the requirements for the upcoming pharmacy reform, while most still cooperate with chains based on a franchise contract. There could be as little as 15 pharmacies that qualify as completely independent and are run by just eight pharmacists, an ERR analysis suggests. Even the State Agency of Medicines does not have the full picture.

A law set to enter into force from April of next year will define pharmacist-run drugstores as those where a person trained as a pharmacist holds at least a 51-percent stake. Pharmacies where pharmacists have a smaller stake or none at all – for example, those run but not owned by pharmacists – do not meet the reform criteria.

ERR has for months tried to answer the question of how many pharmacist-owned drugstores there are in Estonia. While official statistics suggests there are 175, they include pharmacist-owned drugstores that cooperate with major pharmacy chains, meaning that while they are owned by pharmacists, they have franchise contracts with chains, pursue joint marketing and sales campaigns, even if they sport different signs above the door.

That is why ERR did not include seemingly independent (sporting their own logo) pharmacies owned by pharmacists that are nevertheless advertised on the website of the Apotheka chain as belonging to its network. Clients of such pharmacies can at least expect to use their Apotheka loyalty card there or have access to other chain services. Should it turn out they are not affiliated in any form, pharmacists running the drugstores in question can accuse Apotheka of false advertising.

Whatever the case, four pharmacies were left off the list of completely independent pharmacist-owned drugstores for this reason.

The State Agency of Medicines also lacks a clear overview of completely independent pharmacies in Estonia. Because the competition watchdog has not deemed marketing and promotional cooperation inadmissible, the agency does not take an interest in pursuing relevant statistics. They suggested the journalist turn directly to pharmacy chains.

Lone wolves

Therefore, there are just eight lone wolves operating completely independently despite fierce competition. They own 15 pharmacies between them.

One such pharmacy owner is Hiie Päit from Pärnu. Her company Päit Kaubandus AS uses the trademark Ülejõe apteek that runs two pharmacies in the city of Pärnu, one in Sindi and one in Tõstamaa.

Päit's company is profitable. The company made a profit of €2,472 at a turnover of €2.2 million last year, down from a profit of over €40,000 the year before.

There is also a Tallinn-based pharmacist with three drugstores to his name. OÜ Marja Apteek that is owned by Andre Vetka runs the Marja pharmacy in Kristiine, Järveotsa pharmacy in Õismäe and Paekivi pharmacy in Lasnamäe. Vetka has owned his pharmacies for ten years and does not plan to pursue a franchise contract or sell them.

"There are a lot of pharmacies, people have access to excellent service, pharmacies are located very conveniently and stay open late. All of it is happening at the expense of pharmacies' profitability and coping. No one has it easy. We are making efforts to offer clients a good service. I believe it is the only way," Vetka said.

That said, he had no criticism for pharmacists who choose the franchise path.

"Both options have their pros and cons. If you have a franchise, you have to play by the chain's rules, such as loyalty card benefits, campaigns etc. At the same time, pharmacists have an easier time as the chain headquarters take care of a lot of things for them. Our pharmacies do not use franchises," Vetka said.

Not in favor of a completely free pharmacy market

Andre Vetka is not in favor of opening the pharmacy market in full. He believes, however, that pharmacies should be more integrated into the Estonian healthcare system as proposed by Minister of Social Affairs Tanel Kiik.

"Pharmacies are a very good resource that we could make better use of by giving them more functions. It would help alleviate the drought of medical professionals that is getting worse by the year. The population is aging and elderly people have more chronic illnesses that need professional medical attention," the pharmacist explained.

"Advances in medicine make it possible to treat people outside of hospitals where pharmacists and other first contact specialists have a very important role to play. The pharmacist is the most accessible medical worker in society: pharmacies stay open for a long time, also on weekends, whereas 58 percent of people in Europe reach the nearest pharmacy in five minutes and 98 percent inside 30 minutes. Better use should be made of this resource in the future, which is something a lot of countries in the world have already realized," the pharmacy owner said.

Over 60 pharmacies in Tartu

Vetka believes there are too many pharmacies in Estonia today.

"Estonia does not need 500 pharmacies where ca. 300 would be optimal. We have a lot of pharmacies in cities, with some shopping malls playing host to three. Having an optimal number of pharmacies would help alleviate labor shortage that is especially acute in rural areas," Vetka said. "The city of Tartu has 44 pharmacies which is an insane number for a city of 100,000 people."

While the European average is one pharmacy per 3,200 people, there is a drugstore per 2,100 people in Estonia.

Vetka said that while not all pharmacies can make ends meet, they are kept open for the sake of activity licenses.

Reform needed

Independent pharmacist from Kiisa Kirsti Vihermäe finds that the pharmacy market reform is necessary and that there are too many pharmacies on the market today.

"With the reform closing some pharmacies, pharmacists would get the chance to work normally. Drug wholesalers have invested a lot in the business, it has been theirs for decades. If they close their pharmacies in major centers, pharmacists can move theirs in, while it is difficult to say how many will. It is also possible rural area pharmacies will disappear altogether as pharmacists move to cities. But it might not happen," she added.

Other fully independent pharmacies include the Kalamaja pharmacy in Põhja-Tallinn, Puka pharmacy in Valga County, the Pärnu-Jaagupi pharmacy and its branch in Audru, the Rakke pharmacy in Lääne-Viru County, Tammiku pharmacy and a branch in Kohtla-Järve and the Vana pharmacy in Haapsalu.

A lot of pharmacies where pharmacists are the beneficial owners are either jointly owned so no one holds 51 percent or pursue marketing cooperation with chains, meaning they are not fully independent in their actions. That said, for the purpose of the pharmacy reform bill, the latter are also valid pharmacist-owned drugstores.

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Editor: Marcus Turovski

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