OTC Supply Bottlenecks Ahead, Warns Europe's Largest Online Pharmacy
Executive Summary
Europe's largest e-commerce pharmacy Zur Rose predicts an OTC supply bottleneck down the line as the region's consumer health industry struggles to meet the demand resulting from Covid-19.
Europe’s largest online pharmacy Zur Rose has warned that increasing pressure on the region’s OTC supply chain resulting from the coronavirus health crisis may come to a head in the near future.
At the center of a fast-moving health crisis in Europe, Swiss-based Zur Rose told HBW Insight that the current demand it was seeing for OTC medicines would “increasingly lead to supply bottlenecks for the pharma industry.”
“Since the spread of the coronavirus, the demand for both prescription and over-the-counter drugs and healthcare products at group level has increased significantly,” the firm revealed. “Overall, patients and customers have increasingly used the mail order channel since the virus spread.”
Where other retailers might struggle to keep up with demand, Zur Rose said it had created the necessary resources. “In Germany we have capacity reserves of 50%," the retailer said, "which we can also increase accordingly.”
As the largest e-commerce pharmacy in Europe, Zur Rose said it had social responsibility to ensure that it had the “operational capacity to act.” “In particular, we must ensure that chronically ill patients are cared for,” it insisted.
French Opportunity
Speaking as it published its annual results – with group turnover growing by 30% to CHF1.57bn ($1.57bn) in 2019 – Zur Rose said that alongside the “short term sales boost,” the Covid-19 epidemic had “catalyzed a shift towards e-commerce pharmacy and e-prescriptions” among its customers.
Meanwhile, although Zur Rose no longer splits its financials into Rx and OTC sales in each of its three segments, Germany, Switzerland and Europe, the company did also reveal its intentions to take advantage of proposed changes to the way that France regulates online sales of non-prescription medicines.
Last month, the French government announced its intention in a draft law “Acceleration and Simplification of Public Trading” to make it easier to sell non-prescription drugs online, Zur Rose explained.
Given the size of France’s OTC market – €6bn a year according to Zur Rose – the liberalisation of the country’s pharmacy system would bring about “strong momentum” for the retailer’s “platform” business model.
While online sales of medicines by pharmacists has been authorized in France since the end of 2012, the country’s “very restrictive” framework does not allow pharmacies to effectively develop their e-commerce operations, according to the French competition authority advocating reform.
Remaining in favor of only allowing pharmacists to sell medicines online, the Autorité says pharmacists should be able to consolidate their offer via a common website, “which will allow more pharmacies to access this activity.” (Also see "France Should Allow Supermarket Sale Of OTCs And Relax Pharmacy Ownership Rules, Says Competition Authority " - HBW Insight, 15 Apr, 2019.)
Zur Rose’s evolution into a pharmacy platform – where pharmacists can sell their products directly to consumers, much like individual retailers can through Amazon – as well as its recent acquisition of French online pharmacy Doctipharma, meant that the company was well placed to take advantage of this change. (Also see "Zur Rose Steams Ahead With Acquisition-Led Expansion Amid Investor Concerns" - HBW Insight, 18 Mar, 2019.)