Generic Drugs Enable Health and Wealth: Mi Farmacita pharmacy franchise brings affordable medicines and doctors to Mexico's poor

Mi Farmacita, a pharmacy franchise chain based in Mexico, demonstrates the potential of the private sector to make generic medicines available to the poor.Mi Farmacita, a pharmacy franchise chain based in Mexico, demonstrates the potential of the private sector to make generic medicines available to the poor, according to a World Resources Institute case study released today.

Generic drugs are indispensable for lowering the cost of medical treatment in developed countries. Yet in developing countries such as Mexico, generic drugs sometimes account for a very small share of the pharmaceutical market and are largely unavailable to low-income earners who could benefit most from more affordable medicines.

Mi Farmacita Nacional is a growing, for-profit business on a mission to bring affordable generic medicines and basic doctor consultations to low-income communities across Mexico. Its rapid success prompted the WRI case study, What Works: Mi Farmacita Nacional, authored by Columbia Business School’s Enrique Coronado (‘08), Christina Krettecos (‘07) and Yvonne Lu (‘07), to analyze Mi Farmacita’s business model, strategies and best practices.

Mi Farmacita was established in 2003 through a partnership between two prominent drug manufacturing and distribution companies in Mexico. It has since more than doubled the number of operating outlets each year and has established 69 outlets to date.

As the case study reveals, Mi Farmacita outlets not only enable better health among their customers, they support local economies by generating profits for entrepreneurs and providing fairly compensated employment for store clerks and doctors. Franchise outlets in operation for a minimum of 22 months, many of which are located in low-income communities, process an average of 2,400 transactions every month and are an important source of affordable drugs, medical consultations, and other basic services such as water filtration and telephone access for their communities.

For example, in providing affordable drugs, Mi Farmacita offers certain antihistamines to low-income patients at a 64 percent discount. Some drugs used to treat arthritis are offered at a discount exceeding 81 percent.

What Works: Mi Farmacita Nacional is part of WRI’s What Works series of case studies, which offer in-depth analyses of businesses that are successful in serving those among the 4 billion people whose incomes place them at the base of the world’s economic pyramid.

The What Works: Mi Farmacita case study is available for downloading at: www.NextBillion.net/resources/casestudies/.

This case study was made possible through the sponsorship of the Horace W. Goldsmith Foundation and the Social Enterprise Program at Columbia Business School (www.gsb.columbia.edu/socialenterprise).