Retail Outlets For Pharmaceutical Products
Retail Outlets For Pharmaceutical Products
Business Model Description
A B2C (Business to Consumer) business model whereby retailers Open retail outlets for pharmaceutical products to improve availability and access to basic pharmaceutical products by Lao population. Illustrative examples of companies operating in this space are:
Sokdy Pharma is a pharmaceutical company in Lao PDR that operates both wholesale and retail businesses, providing a wide range of medicines to meet the healthcare needs of the local population
Saysaath Pharmacy is a local pharmacy in Lao PDR that provides a variety of pharmaceutical products. It has been steadily growing and has become one of the key players in the local pharmaceutical retail market.
DKSH is a Swiss-based company that operates in various sectors, including healthcare. It acts as a key link between clients and customers, managing products and market information.
Expected Impact
IOA enhances healthcare accessibility and economic growth through its retail model, promoting better health outcomes and job creation.
How is this information gathered?
Investment opportunities with potential to contribute to sustainable development are based on country-level SDG Investor Maps.
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Country & Regions
- Lao PDR: Vientiane Province
- Lao PDR: Oudomxay Province
- Lao PDR: Savannakhet Province
- Lao PDR: Champasak Province
- Lao PDR: Phongsaly Province
Sector Classification
Health Care
Lao PDR is ranked 135th (out of 195) in the 2019 Global Health Security Index [1]. High maternal and child mortality rates, malnutrition, and communicable diseases [2] are significant challenges. To improve public health outcomes, Lao PDR needs to strengthen healthcare infrastructure, enhance access to quality healthcare services, and invest in capacity building for healthcare professionals [3].
Policy priority
Lao PDR's policy priorities focus on achieving universal healthcare, improving access and quality of services, strengthening healthcare infrastructure, capacity building for healthcare professionals, and expanding health insurance coverage [4]. Additionally, reducing maternal and child mortality rates, addressing communicable diseases, and promoting health literacy
Gender inequalities and marginalization issues
Women in Lao PDR face disparities in accessing healthcare services. Maternal mortality remains high at 46 per thousand live births[5]. In the healthcare workforce, women make up 38.5% of physicians[5]. These gender gaps are amplified in rural areas, where cultural norms, limited health literacy, and inadequate infrastructure further hinder women’s access to healthcare[6].
Investment opportunities introduction
Lao PDR's healthcare sector presents opportunities in API manufacturing and healthcare retail. Growing demand for pharmaceuticals supports local production while expanding healthcare retail increases access to essential medicines, particularly in underserved rural areas.
Key bottlenecks introduced include shortage and maldistribution of health workers and inadequate infrastructure [7]. Health financing is characterized by low government spending, reliance on out-of-pocket expenditure, and dependency on external aid [8]. Efforts to achieve Universal Health Coverage for vulnerable groups face hurdles due to these bottlenecks and the country's diverse, rural population [9].
Health Care Retail
Development need
Only a small fraction of the population has access to essential medicines, with rural areas particularly underserved. The country's healthcare spending is low, with only 2.5% of GDP allocated to health as of 2018. The lack of access to medicines is further exacerbated by the high out-of-pocket health expenditure, which accounts for 40% of total health expenditure.[10,11]
Policy priority
The Government of Lao PDR is committed to achieving Universal Health Coverage (UHC) by 2025, ensuring equitable access to quality health services for all, with a focus on the most vulnerable groups. [12]
Gender Inequalities
Gender disparities are evident in Lao PDR's healthcare sector, with women constituting only 38.5% of physicians. These disparities are more pronounced in rural areas, where cultural norms and limited health literacy exacerbate the challenges women face in accessing healthcare. [12]
Investment opportunities introduction
The growing demand for pharmaceuticals supports local production and the expansion of healthcare retail, which can increase access to essential medicines, particularly in underserved rural areas. [13]
Key bottlenecks introduction
The healthcare sector in Lao PDR faces challenges such as a shortage and maldistribution of health workers, inadequate infrastructure, and low government spending. [14]
Drug Retailers
Pipeline Opportunity
Retail Outlets For Pharmaceutical Products
A B2C (Business to Consumer) business model whereby retailers Open retail outlets for pharmaceutical products to improve availability and access to basic pharmaceutical products by Lao population. Illustrative examples of companies operating in this space are:
Sokdy Pharma is a pharmaceutical company in Lao PDR that operates both wholesale and retail businesses, providing a wide range of medicines to meet the healthcare needs of the local population
Saysaath Pharmacy is a local pharmacy in Lao PDR that provides a variety of pharmaceutical products. It has been steadily growing and has become one of the key players in the local pharmaceutical retail market.
DKSH is a Swiss-based company that operates in various sectors, including healthcare. It acts as a key link between clients and customers, managing products and market information.
Business Case
Market Size and Environment
< USD 50 million
10% - 15%
68$ per capita expenditure on healthcare in 2022 in Lao PDR (2.3% of annual income). [17]
Lao PDR imported USD 37.5 million of medicine in 2022. Assuming 80% of the medicine is imported, the market size of healthcare retail will be 30 million USD
Indicative Return
> 25%
The gross profit margin for generic drugs is 50-60%.
Investment Timeframe
Short Term (0–5 years)
The out-of-pocket expenditure on healthcare has been increasing in Lao. The high margins in healthcare retail and the government's priority towards universal healthcare justify a short-term return.
Ticket Size
USD 1 million - USD 10 million
Market Risks & Scale Obstacles
Market - High Level of Competition
Business - Supply Chain Constraints
Impact Case
Sustainable Development Need
23% of Lao PDRs population live below the poverty line. The IOA addresses access to affordable healthcare in Lao PDR where many struggle due to high medical costs. [23]
Inadequate waste management in rural Lao PDR, with only 10% access to basic services, exacerbates health risks, increasing the demand for medicine.
Gender & Marginalisation
Only 13% of women give birth with a skilled birth attendant, and maternal mortality is high at 197 per 100,000 live births. Additionally, only 30% of women use modern contraception. [24]
Ethnic groups such as the Hmong and Khmu face language and cultural barriers when accessing healthcare, leading to inadequate treatment and lower health outcomes.[25]
Expected Development Outcome
Increased availability of affordable medicines will directly contribute to improved health outcomes across the population, especially for those living in poverty or remote areas.
Increased distribution channels through increased retail outlets will ensure reliable access to healthcare products.
Gender & Marginalisation
Gender Equality: The IOA aims to reduce the gender gap in financial inclusion by expanding insurance coverage to women, particularly in rural areas.
Rural Inclusion: The IOA seeks to reduce financial exclusion in rural areas, including among ethnic minorities, by expanding access to insurance services.
Primary SDGs addressed
3.8.1 Coverage of essential health services
Lao PDR aimed for universal health coverage by 2020. However, the pandemic has risked achieving targets, with lower rates of routine childhood immunizations noted.
Full implementation of sustainable health strategies, focusing on improving routine childhood immunizations and achieving universal health services coverage.
5.6.1 Proportion of women aged 15–49 years who make their own informed decisions regarding sexual relations, contraceptive use and reproductive health care
32.7% of women aged 20-24 were married or in a union before age 18. The adolescent birth rate was 83.4 per 1,000 women aged 15-19 in 2016. [16]
Reduction in the percentage of women married or in a union before age 18 and a further decrease in the adolescent birth rate.
10.2.1 Proportion of people living below 50 per cent of median income, by sex, age and persons with disabilities
The poverty rate fell from 46% in 1993 to 18% in 2019, reflecting rapid GDP growth and rising farm incomes.
The poverty rate fell from 46% in 1993 to 18% in 2019, reflecting rapid GDP growth and rising farm incomes.
Secondary SDGs addressed
Directly impacted stakeholders
People
Gender inequality and/or marginalization
Corporates
Public sector
Indirectly impacted stakeholders
People
Corporates
Public sector
Outcome Risks
Quality risk: If not managed properly, the focus on expanding healthcare retail could compromise the quality of healthcare products and services.
Affordability risk: There's a risk that healthcare products and services may become unaffordable for some, particularly low-income individuals and families.
Impact Risks
Execution risk: There is a risk that activities are not delivered as planned. This could be due to operational challenges, lack of adequate skills among the team, or unforeseen obstacles.
Impact Classification
What
The IOA, through its healthcare retail model, aims to improve access to healthcare products and services, thereby improving health outcomes and contributing to economic development.
Who
Customers of healthcare retail outlets, employees in the sector, and the government.
Risk
Risks include accessibility, quality, and affordability of healthcare products and services, as well as employment and gender inequality risks.
Contribution
The IOA's healthcare retail model is expected to enhance the availability and accessibility of healthcare products and services.
How Much
2.3% of annual income goes towards healthcare costs in 2022. By increasing accessibility and affordability to medicine, the IOA aims to reduce this cost. [17]
Impact Thesis
IOA enhances healthcare accessibility and economic growth through its retail model, promoting better health outcomes and job creation.
Enabling Environment
Policy Environment
"National Health Policy" - This policy provides a comprehensive framework for providing healthcare services in the country, including promoting healthcare retail.
"Employment Policy in Healthcare Sector" - This policy outlines the guidelines for employment in the healthcare sector, including retail.
"Policy document: "Healthcare Investment Scheme" - This policy provides incentives for investment in the healthcare sector, including retail.
Financial Environment
"Healthcare Sector Tax Incentives" - These incentives provide tax breaks for investments in the healthcare sector, including retail.
Article 4: Government policies on investment promotion: The Government promotes investment in all sectors and business and all areas throughout the country, except areas and business operations which are related to national security; and seriously harmful to the environment either in the short run or long term; have negative effects on public health; and the national culture
BAF provides matching grants and business assistance to businesses operating in Lao PDR.
Regulatory Environment
"Healthcare Retail Regulation" - This regulation provides guidelines for operating healthcare retail outlets, ensuring quality and safety.
"Quality Assurance Regulation for Healthcare Products" - This regulation ensures the quality of healthcare products sold in retail outlets.
"Employment Regulation in Healthcare Sector"- This regulation provides guidelines for employment in the healthcare sector, including retail.
Marketplace Participants
Private Sector
The Lao National Chamber of Commerce and Industry (LNCCI) is a key private sector actor in the healthcare retail space in Lao PDR. They work closely with the government and the United Nations to accelerate recovery from COVID-19 and improve the business environment.
Government
The Ministry of Health and the Ministry of Foreign Affairs are among the key government agencies responsible for overseeing the healthcare retail sector in Lao PDR. They are committed to increasing government spending on health and improving the quality of health services.
Multilaterals
The World Health Organization (WHO) is a key multilateral actor in the healthcare retail space in Lao PDR. They partner with various governmental and non-governmental actors to respond to regional health challenges.
Non-Profit
Non-profit organizations such as the United Nations Development Programme (UNDP) and the Asian Development Bank (ADB) are among the actors that are directly relevant to the healthcare retail space in Lao PDR.
Public-Private Partnership
The Government of Lao PDR has a Public-Private Partnership Policy that aims to improve the country's public infrastructure and services.
Target Locations
Lao PDR: Vientiane Province
Lao PDR: Oudomxay Province
Lao PDR: Savannakhet Province
Lao PDR: Champasak Province
Lao PDR: Phongsaly Province
References
- (1) Global Health Security (GHS) Index (October 2019)." ReliefWeb, Johns Hopkins University, 9 Jul. 2020, https://reliefweb.int/report/world/global-health-security-ghs-index-october-2019.
- (2) "May 2021 MATERNAL, NEWBORN AND CHILD HEALTH." World Health Organization, https://pmnch.who.int/docs/librariesprovider9/meeting-reports/mnch-brief---june-2021.pdf.
- (3) "Sustainable Financing for Primary Health Care and Universal Health." World Health Organization, https://www.who.int/about/accountability/results/who-results-report-2020-mtr/country-story/2021/lao-pdr.
- (4)"Research Provides Evidence for Health Policy in Lao PDR." PMC, https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7480484/.
- (5) "UNFPA Lao People's Democratic Republic | National Maternal Death." UNFPA, https://lao.unfpa.org/en/news/national-maternal-death-surveillance-and-response-meeting-reaching-zero-preventable-maternal.
- (6)"Gender Assessment Steers Implementation of the Health and Nutrition." World Bank, https://www.worldbank.org/en/country/lao/brief/gender-assessment-steers-implementation-of-the-health-and-nutrition-services-access-project-in-lao-pdr.
- (7) "Challenges for Strengthening the Health Workforce in the Lao People's." Human Resources for Health, https://human-resources-health.biomedcentral.com/articles/10.1186/s12960-016-0167-y.
- (8) "Sustainable Financing for PHC and UHC in Lao People's Democratic Republic." World Health Organization, https://www.who.int/news-room/feature-stories/detail/lao-PDR.
- (9) "Country Office Annual Report 2022 Lao People's Democratic Republic." UNICEF, https://www.unicef.org/media/136021/file/Lao-Peoples-Democratic-Republic-2022-COAR.pdf.
- (10) "Current Health Expenditure (% of GDP) - Lao PDR." The World Bank, https://data.worldbank.org/indicator/SH.XPD.CHEX.GD.ZS?locations=LA.
- (11) "Out-of-Pocket Expenditure (% of Current Health Expenditure) - Lao PDR." The World Bank, https://data.worldbank.org/indicator/SH.XPD.OOPC.CH.ZS?locations=LA.
- (12) "Progress towards Universal Health Coverage in the Lao People's Democratic Republic." World Health Organization, https://www.who.int/publications-detail-redirect/9789290620037.
- (13) "Exploring the Gender Dimensions of Unpaid Care Work in the Lao People's Democratic Republic." Asian Development Bank, https://www.adb.org/publications/gender-dimensions-unpaid-care-work-lao-pdr.
- (14) "Lao PDR Aims to Achieve Universal Health Coverage with New Global Fund Investment." World Bank, https://www.worldbank.org/en/news/press-release/2020/11/17/lao-pdr-aims-to-achieve-universal-health-coverage-with-new-global-fund-government-of-australia-and-world-bank-investment.
- (15) "Challenges for Strengthening the Health Workforce in the Lao People's Democratic Republic." Human Resources for Health, https://human-resources-health.biomedcentral.com/articles/10.1186/s12960-016-0167-y.
- (16) https://data.unwomen.org/country/lao-peoples-democratic-republic
- (17) https://data.worldbank.org/indicator/SH.XPD.CHEX.PC.CD?locations=LA