Pharmacy

In many countries, legislation and regulatory frameworks are designed to reduce healthcare costs by ensuring that medicines containing the same active substance are available in the appropriate formulation at the lowest possible price. While the originator product often remains on the market, patients are typically dispensed the lowest-priced alternative.

Products within the Pharmacy segment are sold through various substitution systems, generally governed by price and product availability. One example is Sweden’s “Product of the Month” (Periodens Vara, PV) system, which covers nearly 80 percent of all prescription medicines dispensed by Swedish pharmacies each day. The PV system enables the government, as the subsidizing payer through the national pharmaceutical benefits scheme, to maximize the value obtained from public healthcare spending. Within each substitution group, only the lowest-priced product is normally dispensed. Similar systems exist in many other countries. In some markets, private insurance companies assume the role of payer, but the outcome is essentially the same – price determines market access and sales volume.

Price-Driven Market Dynamics

A key advantage for EQL within the Pharmacy segment is that no significant sales or marketing resources are required, as purchasing decisions are primarily driven by price. With competitive pricing and reliable product availability, sales are generated automatically and without delay. Conversely, if a competitor offers a lower price, sales volumes can decline rapidly.

As a result, inventory planning, supply chain management and deep market knowledge are critical capabilities for EQL. These enable the Company to balance opportunities and risks in markets where prices can change significantly on an annual, quarterly, monthly, weekly or even daily basis.