Nepal, a country with over 30,000 registered pharmacies catering to a population of around 25 million, boasts one pharmacy for every 833 people—a figure already shows highly crowded market. However, beneath this numerical facade lies a harsh reality: community pharmacies in Nepal are on the brink of extinction. This alarming trend is a result of government policies, economic pressures, and a lack of visionary reforms, leaving the backbone of local healthcare in dire straits.
Impact of Health Insurance and Free Medication Schemes
The rollout of the government’s health insurance scheme and provision of free medications for chronic diseases have significantly impacted local pharmacies. Patients with chronic conditions, who once relied on community pharmacies for their medication needs, now turn to government-run outlets for free supplies. This shift has drastically reduced the customer base for small-scale pharmacies, leaving them struggling to sustain operations. This has reduced the business upto 40% of retail pharmacies.
Restricted Product Categories
Unlike pharmacies in developed countries, which function as multi-faceted health and wellness hubs, Nepal’s community pharmacies are shackled by restrictive policies. They are prohibited from selling a wide range of products, including skincare items, nutritional supplements, baby products, medical devices, health equipment's and health and hygiene essentials—products that come under VAT. This limitation has robbed pharmacies of potential revenue streams that could have supported their survival.
Minimal Profit Margins and Mandatory Discounts
Retail pharmacies in Nepal are demanded to offer a 10% discount on all products, cutting into their legally allowed profit margin of 16%. Comparatively, this margin is already lower than that in many other countries, making the business less viable. While consumers benefit from lower prices, pharmacies are left grappling with reduced profitability, forcing many to shut their doors permanently. There is already a question on the retail margin percentage which seems to set up with unscientific evidence.
Counselling Without Compensation
Pharmacists in Nepal are legally barred from charging for their expert counseling services. This disregards the essential role pharmacists play in patient care—answering questions, advising on medication use, and providing critical health information. This lack of recognition for their professional expertise not only undervalues pharmacists but also demotivates them from continuing in the field. Additionally the pharmacy is legally a trading firm, where service can't be sold or one cann't charge for offering service legally.
Harassment and Fear Tactics
Local government authorities, police, and the Department of Drug Administration (DDA) frequently conduct inspections of community pharmacies especially in urban areas( they avoid to visit rural regions). While regulatory oversight is necessary, the intrusive and often arbitrary nature of these visits creates an environment of fear and uncertainty. Many pharmacy owners feel targeted rather than supported, compounding their struggles in an already challenging business landscape. There has been cases where the local government is not ready to accept the formats of narcotic records provided by Department of drug administration and asking for other formats and sometimes untrained inspectors visits don't even know the storage and handling of some medications.
Nepal vs. Global Trends
In stark contrast to Nepal, retail pharmacies in developed countries thrive by integrating health insurance, expanding their product offerings, and serving as comprehensive health hubs. They sell cosmetics, skincare products, nutritional supplements, orthopaedic support equipment, and medical devices and any other items related to health and wellbeing—all under one roof with almost 10000 sq feet floor space which a retail pharmacies finds difficult to operate in 100 sq foot floor space. Moreover, these pharmacies often provide additional services like blood pressure monitoring, oxygen saturation checks, blood glucose monitoring and first aid, which are legally restricted for Nepalese pharmacies.
This disconnect between global practices and Nepal’s outdated policies highlights the dire need for reform. While the government views pharmacies through two contradictory lenses—service centers under good pharmacy practices and trading entities under sale and distribution guidelines—the lack of a cohesive vision stifles their potential.
A Call for Clear Policies and Reform
The survival of community pharmacies hinges on the government, pharmacy councils, and policymakers coming together to define a clear vision. What can pharmacies legally offer? What services are within their scope? Addressing these questions is crucial to creating a supportive ecosystem for these essential healthcare providers.
Reforms should include:
- Allowing broader product ranges: Expanding permitted categories to include non-prescription health and wellness items.
- Fair profit margins: Revising mandatory discount policies to ensure pharmacies can remain profitable.
- Recognizing pharmacists' expertise: Enabling pharmacies to charge for counseling and other value-added services.
- Streamlining regulations: Reducing unnecessary inspections and ensuring fair treatment of pharmacy owners.
- Integrating with insurance systems: Allowing pharmacies to participate in health insurance schemes to drive revenue and efficiency.
Community pharmacies are an indispensable part of Nepal’s healthcare infrastructure. They serve as accessible points of care for millions, particularly in rural and underserved areas. Yet, without timely reforms and a supportive policy framework, these lifelines risk disappearing altogether. It is high time for the government and stakeholders to recognize the value of community pharmacies and act decisively to preserve them. Failure to do so will not only harm the pharmacy sector but also compromise the healthcare access of countless Nepalese citizens.