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Preamble
This blog post is based on a recent research by McKinsey. Link at the end.
Latin American countries carry resemblance with Pakistan in several ways. Lessons learnt there can be applied here.
The Evolution of Pharmacies in Latin America: From Dispensing Drugs to Delivering Health
The healthcare landscape in Latin America is undergoing profound change. Shifting demographics, mounting economic pressures, and increasingly informed consumers are reshaping how healthcare is accessed, delivered, and experienced, and retail pharmacies, long seen primarily as points of sale for medicines, are now poised to become pivotal front-door care providers across the region.
McKinsey & Company’s latest research, based on a survey of 2,500 consumers across 14 Latin American countries, underscores the evolving expectations of patients and the strategic opportunities for pharmacies that aspire to lead in both value creation and health-system impact. This blog explores the five key forces reshaping retail pharmacies in Latin America, the strategic implications for leaders, and the blueprint for transforming pharmacies into hubs of accessible, affordable, and patient-centric care.
Access Barriers Define the Healthcare Reality
Healthcare access remains a persistent challenge in Latin America. According to McKinsey’s research, 62 percent of consumers who deferred medical care cited barriers such as high costs, logistical hurdles, and limited information about where to seek services.
This reality presents both a challenge and an opportunity for pharmacies. Unlike hospitals or clinics, which are often constrained by scheduling, higher costs, and regulatory frameworks, retail pharmacies are ubiquitous, familiar, and accessible without appointment. Their physical proximity to patients and extended operating hours position them to bridge gaps in care accessibility, especially for low-complexity needs (e.g., seasonal illnesses, minor injuries, and medication counseling).
Forward-looking pharmacies are already experimenting with walk-in clinical services, such as immunizations, chronic care follow-ups, and teleconsultation options. Importantly, these services remain targeted and focused; the most effective implementations avoid overextending into high-complexity care beyond pharmacy capabilities. When combined with digital workflows, such offerings can streamline care and create a more seamless and unified patient journey.
In essence, pharmacies can transform from medication dispensers to first points of care, particularly for populations that would otherwise delay or forego treatment — a shift that carries both public-health and business value.
The Rise of Digital Channels: A New Frontier for Engagement
Although the digital transformation of pharmacy services in Latin America remains nascent, it is accelerating. McKinsey’s data shows that 25 percent of consumers report that they frequently or always purchase medications online, a notable signal of shifting behavior. Pharmacies that invest in digital and omnichannel platforms stand to gain on multiple fronts:
Convenience: Online ordering, home delivery, and automatic prescription refills reduce friction for consumers and support retention.
Data-driven personalization: Digital touchpoints generate rich customer insights that can inform loyalty programs, refill reminders, and tailored communications.
Engagement: Conversational commerce, push-notification reminders, and AI-enabled recommendations can deepen patient-brand relationships and boost adherence.
Beyond simply adding an e-commerce bucket, the most sophisticated digital strategies create a connected ecosystem. This means merging in-store experience with digital touchpoints that not only facilitate transactions but also support health journeys, from wellness education to chronic condition management.
Convenience and Product Availability: Loyalty Drivers
Physical convenience remains a key loyalty factor for Latin American consumers. McKinsey’s survey reveals that 75 percent of respondents prefer to visit the pharmacy closest to their home, and 69 percent can reach their preferred pharmacy within ten minutes.
But convenience is more than geographic proximity. True convenience also means:
Stock reliability: Roughly 40 percent of consumers who could not find a prescribed medication cited stockouts as the top reason for switching pharmacies.
Last-mile fulfillment: Fast deliveries and automated refill programs can turn infrequent visitors into loyal repeat customers.
Localized assortment: Tailoring product mix to community needs improves relevance and drives deeper engagement.
To minimize supply disruptions and stockouts, pharmacies can adopt predictive inventory systems that use POS data, seasonality trends, and localized demand signals. Strategic partnerships across suppliers, distributors, and generics manufacturers can further stabilize supply chains and mitigate external shocks.
In an environment where consumers shop across multiple channels and brands, the twin pillars of availability and convenience can become decisive competitive advantages.
Pricing Sensitivity and the Rise of Generics
Latin American consumers are highly price sensitive. McKinsey’s research finds that about 40 percent of respondents have switched pharmacies in the last five years, in part due to high medication costs.
But there’s an important countertrend: consumers are increasingly comfortable with generic medications. Nearly three-quarters of surveyed consumers are willing to switch from brand names to generics, which now represent roughly 48 percent of the prescription drug market and 45 percent of online orders.
This presents a strategic lever for pharmacies:
Educational initiatives that build trust in generic efficacy can increase demand and deepen loyalty.
Pricing models and bundled offers tailored to patients with chronic conditions can balance affordability with margins.
Data analytics can help pharmacies optimize their product mix, balancing generics and branded medications based on local demand profiles.
Strategic pricing, when executed alongside education and tailored offerings, can elevate a pharmacy’s role from a cost center to a trusted advisor in the patient’s overall health-spending decisions.
Unmet Demand for Broader Health Services
Perhaps the most compelling insight from McKinsey’s report is that consumers increasingly want more from their pharmacies than medications alone. Over half of respondents expressed interest in services such as:
- Basic clinical care
- Preventive care apps
- Medical equipment offerings
- Health-related memberships and loyalty packages
Interest also extends to wellness and lifestyle services, such as advanced dermo-cosmetic products and diagnostics.
This opens the door for pharmacies to evolve into health ecosystems that orchestrate a broader spectrum of services. Potential models include:
Preventive care memberships with bundled services like health coaching or screenings
Partnerships with telehealth and diagnostics providers
In-store specialist services (nutrition, chronic care counseling, dermatology guidance)
Importantly, success in these arenas will require thoughtful integration, robust training, and careful alignment with regulatory frameworks. But the potential payoff is significant: pharmacies that transcend traditional boundaries can emerge as centralized health destinations, driving both patient satisfaction and diversified revenue streams.
Sum Up
The McKinsey analysis paints a compelling picture of the not-so-distant future for pharmacies in Latin America. No longer confined to dispensing medicines, pharmacies are ideally positioned to improve access, lower care costs, and deliver value across the health continuum. While challenges persist, from supply constraints to infrastructure gaps, the strategic opportunity for pharmacy leaders is clear: Evolve from transactional dispensers to trusted, accessible, and data-driven health partners.
For pharmacy operators in Latin America today, the time to act is now. Investing in digital transformation, redefining service offerings, innovating pricing strategies, and embracing customer-centric models will not only differentiate brands; it will unlock a more equitable and accessible healthcare future for millions across the region.
Pharmacies in Pakistan also need to explore these possibilities.
Concluded.
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For most blogs, I research from several sources which are open to public. Their links are mentioned under references. There is no intent to infringe upon anyone’s copyrights. If, any claim is lodged, it will be acknowledged and duly recognized immediately.
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