A Different Kind of Pharmacy

By George Anderson

Pharmaca Integrative Pharmacy is building a new type of drugstore that may – or may not – be heralding a new way of providing healthcare to customers at retail, just as Whole Foods has done in food retailing.

Boulder, Colorado-based Pharmaca, which will open its seventeenth store later this week in Napa, Cal., clearly differentiates from most conventional pharmacies with a spa-like ambience and a host of complementary healthcare services. The staff includes naturopathic doctors, licensed estheticians, certified herbalists, homeopaths and nutritionists, as well as pharmacists who are at hand to fill prescriptions, compound medicines and discuss possible interactions with over-the-counter (OTC) remedies.

Barry Perzow, founder and chief executive of Pharmaca, told the San Diego Union-Tribune at the recent grand opening of a store in La Jolla, Calif., “Pharmaca is trying to do something different, more of an East meets West kind of pharmacy. It’s a pharmacy that has been developed with prevention in mind, as opposed to just treating disease by filling prescriptions. We want to educate customers on how not to get sick.”

Michael Ackerman, a chiropractor in the San Diego area, said, “This is a great store. I expect to be sending many of my patients here.”

Pharmaca Integrative Pharmacy takes its inspiration from European pharmacies, according to Mr. Perzow.

For Europeans, “holistic and preventive medicine is their first choice, not prescription drugs,” he told the Union-Tribune.

Mr. Perzow’s company sees American consumers following a similar path. A recent company release sourcing the National Center for Complementary and Alternative Medicine (NCCAM) said 36 percent of American adults make use of complementary and alternative medicine products.

While prescription medicine is an important element of Pharmaca’s profit picture, the chain puts a different emphasis on it than most American drugstores.

According to Mr. Perzow, the revenue split between the front-end and pharmacy is roughly 60/40 versus 25/75 in many traditional drugstores.

Pharmaca focuses on selling higher margin goods in the front with natural and organic items getting prime shelf space. The chain does carry some mainstream products, such as Pantene and Dove, but those are relegated to the lower shelves.

Another difference between Pharmaca and most mainstream pharmacies is the role prescription compounding plays in its operation. Nearly 25 percent of total store revenues and more than half of pharmacy sales are generated by pharmacists custom-making drugs for patients. Pharmaca will even tailor-make a product for a pet based on a veterinarian’s prescription.

Pharmaca sees its staff and customer service as competitive advantages in serving its affluent customer base. The company only opens stores where incomes average in the six figures.

“What’s really important here is having extremely knowledgeable people on your sales floor,” said Tom Stemberg, Pharmaca board member.

“In many cases, the manufacturers of product lines sold in Pharmaca will not sell in other retail channels because they don’t see the kind of professionalism they see at Pharmaca. It’s the superior customer experience that gets the customers coming back again and again,” Mr. Stemberg told the Union-Tribune.

Discussion Questions: Will Pharmaca Integrative Pharmacy enjoy the same type of success in the drugstore channel that Whole Foods has in grocery? Do you see other retailers in drug or other channels opening similar concepts? What can mainstream pharmacies, not looking to fully go down the Pharmaca road, learn from the company?

• Pharmacy integrates medicine, organic products – San Diego Union-Tribune
• Pharmaca Integrative Pharmacy opening in Napa on Saturday, Sept 29 – Pharmaca
  Integrative Pharmacy