Small pharmacies offering drugs for cheaper than major chains

Independent pharmacy. Photo is illustrative.
Independent pharmacy. Photo is illustrative. Source: OÜ Marja Apteek

Major chain pharmacies aren't competing against one another and are generally selling OTC medications at the exact same cost regardless of location, and at higher prices than small pharmacies, according to the results of a price comparison analysis conducted by daily Õhtuleht of 332 pharmacies and 422 over-the-counter (OTC) drugs sold there.

While bigger pharmacy chains are expected to compete with one another due to their improved negotiating position, thus offering consumers the best possible prices, the question arises how smaller pharmacies are able to sell their products at lower prices, Õhtuleht writes (link in Estonian).

According to Andre Vetka, the founder and owner of three pharmacist-owned pharmacies, small, independent pharmacies can take advantage of all opportunities offered on the market, such as buying from various wholesalers depending on which is cheaper, and use these opportunities for the benefit of their customers.

Chain pharmacies also often command prime locations, which means that pharmacy-owned pharmacies located in less exclusive neighborhoods have to make more of an effort to remain competitive, which in turn drives their retail prices down, he added.

Kadri Ulla, a member of the board at drug businessman Margus Linnamäe-owned Terve Pere Apteek OÜ — which operates under the Apotheka brand — justified smaller pharmacies' cheaper prices with various cost prices, however BENU Apteek Eesti OÜ retail sales director Kaidi Kelt suggested that Tallinn's Marja and Kalamaja pharmacies, which were cited as examples in the article, employ a discounter-type sales strategy, meaning that they run their businesses with lower profit margins, which are compensated in turn by higher sales volumes.


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Editor: Aili Vahtla

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