Accessibility of pharmacy stores

The pharmaceutical market in China is expanding, bringing an almost inevitable inflation in the number of pharmacy stores. A strong correlation was observed between GDP per capita and the number of stores (ρ=0.714, p=0.047). Globally, the median number of stores per 10 000 residents was 2.85 in 2017.9 Only 3 out of the 31 provinces in mainland China was below the global median based on 2020 data: Beijing (2.3), Shanghai (1.6) and Tibet (1.6) (online supplemental table S2). Yet, oversupply can be fatal. Market size is considered unreasonable and unsustainable when the density of pharmacy stores is higher than 5 stores per 10 000 residents.9 Across the country, Northeast China met that standard in 2020 (online supplemental table S4). Number of stores per 10 000 residents was the highest there at 6.1, while the absolute number of stores there ranks second to last. The contradiction may be a result of massive loss of permanent residents due to economic recession in that region over the last few decades, and expanded infrastructure investment from the central government despite underpopulation.

Market oversaturation leads to fierce price competition and potentially compromises the quality of services. Excessive competition may be detrimental to the rationality of market and is one of the key factors inducing stress and immorality of individual market participants.10 Too many pharmacies in a tiny community can cause the same problem, making it challenging for each business to attract consumers’ attention. This is especially true in highly concentrated markets such as urban or metropolitan areas where it takes a lot for a business to survive. Oversaturation of the market can eat up the pharmacy’s profit on a service or transaction and sacrifice the revenues and gross profits of the company. These would cost the pharmacists on team their job or force them to accept reduced salaries and intensified workload. On the other side, too few choices on the market may bias consumers’ choice towards inferior products and harm their interests, which should also be avoided.11

To address this dilemma, some provinces and municipalities have announced regulations to restrict or encourage the opening of new stores based on local density of pharmacy stores. For example, the Shanghai Municipal government issued in 2001 that any two pharmacies must be at least 300 m apart to balance the distribution of resources in urban and suburban areas and prevent vicious competition among enterprises through restricting market entry.12 This policy has been in effective for 20 years and was not cancelled until March 2021.12 Correspondingly, the number of pharmacy stores in Shanghai was much lower than the national average (4076 vs 17 867) (online supplemental table S1). It may also explain why the accessibility of pharmacies in giant cities like Shanghai was relatively ‘worse’ than that in smaller cities (online supplemental table S2).

Centralisation of pharmaceutical retail market

The higher market access standards in recent years indicates a trend for integration of Chinese pharmaceutical retail market. Small retailers who do not have enough resources to upgrade their facilities and management systems to meet the latest policy requirements may be forced to withdraw from the market. Previous studies have revealed that one of the most common challenges for small business was how to obtain adequate funding from external sources, which otherwise would often led to bankruptcy.13 14 Meanwhile, numerous new products on the market, thanks to the rapid development of the biomedical industry, have also made it challenging for small businesses to keep up with. And for some novel techniques and professional software (eg, electronic prescribing), independent pharmacies have to pay more for installation, maintenance and transactions as they were unable to negotiate lower prices like large chain pharmacies.15 They also reported that it was difficult to find a supply to rely on, because they could not always order in bulk or in advance like large companies did.16 Undersized businesses are often more vulnerable to financial crises and have less efficient financial management behaviour, lower productivity and more conservative investment philosophy. Therefore, as the policy makers lifts the market access standards, the market will gradually tilt towards large companies that have more resources to guarantee and improve services, invest in new products and endure revenue losses. These changes would accelerate the consolidation of the pharmaceutical distribution sector and bring a continuous growth in chain rate.

Compared with independent pharmacies, chain pharmacies have been found to have 6% lower drug price and 6% higher drug quality, which may be partly explained by more restricted and comprehensive protocols on the practice of CPs in chain pharmacies.17 18 Large chain pharmacies offered more structured training programme for CPs, aiming at knowledge and productivity, and communication and consultation skills.19 They were also more likely to provide well-recognised qualifications and better career development prospects.19 Additionally, in terms of supervision, the decentralised nature of independent pharmacies makes regulation implementation costly and logistically difficult. While in chain pharmacies, national-level regulatory measures can simply target the company’s headquarters while the branches would be supervised by the company itself.20 Reduction in the absolute number of pharmacies can suppress the repetitive, low-quality development of small and medium-sized enterprises, therefore promote market centralisation and industrial restructuring.

Compared with those working in chain pharmacies with relatively fixed wages, CPs in independent pharmacies face more direct economic incentives to sell a drug.21 Excessive profit maximising strategies adopted by pharmacies and CPs have been proven to lead to poor practices.22 Therefore, CPs in independent pharmacies are at higher risk of irrational drug use, such as selling unnecessary over-the-counter products, or deliberately omitting prescription review to sell more expensive products or controlled substances. In a fair and orderly market, individual business should be able to make profits. Therefore, CPs could have the margin to provide consumers with high-quality services and attention, rather than merely seeking to maximise the revenue from each customer and trying to survive an intensely competitive marketplace.22–24 The ultimate value of healthcare can be realised through putting efforts on establishing good relationships with consumers, developing care plans for drug treatment and following up on patient outcomes, instead of sacrificing service quality to the profit motive.

A higher chain rate indicates a higher degree of centralisation in the retail market. The blanket chain rate in China was found to be 39.4% in 2014 and 56.5% in 2020, higher than the global average of 38% (ranged from a minimum of 3% in Belgium to a maximum of 99% in Colombia), and lower than that of the USA.9 25 26 In the USA, among 62 145 retail pharmacies as of 2019, over 39 000 (62.8%) were chain stores affiliated to large drug companies or general retailers such as CVS, Walgreens and Walmart.25 26 With the continued tightening of market access and the saturation of the domestic market, it is foreseeable that the chain rate will further increase in China by means of higher degree of intensification and retail alliances.

Availability and staffing shortage of CPs

East and South China came top on the absolute number of CPs (online supplemental table S4). Similarly, this can be explained by the higher level of economic development and higher living standards in these areas where a strong correlation between GDP per capita and the number of CPs was observed (ρ=0.881, p=0.04). During 2014–2020, China witnessed a momentous rise (3.3 times) in the availability of CPs per store in response to an increasingly stringent regulatory framework. In 2015, the NMPA issued the ‘Notice on the Comprehensive Supervision and Implementation of the Newly Revised Good Supply Practice’ that required the legal representative or the chairperson of new pharmaceutical retail companies must be a qualified pharmacist.27 Meanwhile, all pharmacy stores approved after 1 January 2016 must be equipped with pharmacists.27 By the end of 2020, the absolute number of pharmacists nationwide almost hit 1 CP per store, but still has an obvious gap in some remote rural areas, especially in the Southwest where one store only had 0.64 CP. The lag between China and the world average (1.67 CP/store) was even greater.9 On average, 3.92 CPs were accessible to every 10 000 Chinese residents (online supplemental table S4), much lower than the global median of 5.19, reported by the International Pharmaceutical Federation.28 Likewise, the 2021 Global Health Observatory by WHO revealed that over 65% of its member states had fewer than 5 pharmacists per 10 000 population where China stood at 83th in the world.29

Unlike their counterparts in North America, CPs in China are generally considered as salespersons rather than healthcare providers. Low wages, limited career growth prospects and lack of appreciation drive people away from this profession. Doing a much more trivial job, CPs are living on a relatively fixed and modest salaries compared with those working in hospital settings and other aspects of pharmaceutical industry. Lack of incentives and appreciation obstruct their willingness to work in community services. Additional legal requirements in some jurisdictions also exacerbated the shortage in CPs. In 2018, pharmacy stores over 250 m² in Shanghai were required to have at least two CPs.30 In Qingdao, Shandong Province, pharmacy stores selling ‘special medical insurance medicines’ must have two CPs.31 To become a designated pharmacy for ‘special chronic disease drugs’ in Kunming, Yunnan Province, two CPs must be appointed in the practising unit.32 Besides, retail pharmacies selling traditional Chinese medicines (TCMs) must be under the supervision of a specialised personnel (eg, a licensed TCM pharmacist).

In order to alleviate the shortage of CPs, local governments such as Ningxia Hui Autonomous Region, have issued special announcements allowing pharmacy technicians to temporarily assume CP’s duties until 31 December 2025, giving the government time to strengthen infrastructure and find ways to attract and retain talents.33 Generally, granting financial and non-financial benefits (eg, unpaid leave, honorary awards or entertainment facilities and recognition of personal value) would be a feasible way to improve the profile of the profession. Multiregional pharmaceutical retail companies can reallocate employees and resources to reduce the disparities across the country. Higher salaries and a better promotion channel can also attract more workers. For Southwest China, the Great Western Development Strategy along with labour policies that encourage reemployment and regional autonomy may promote the quantity of CPs. For Northeast China, stronger retail alliances would reduce the total number of pharmacy stores and therefore increase the number of CPs per store. For sparsely populated areas, government agencies should consider promoting remote pharmacy service which can provide timely pharmaceutical care with a fraction of costs of a brick-and-mortar pharmacy. Allowing CPs to practice in multiple stores shall further alleviate personnel shortage.

Many countries suffer from shortage of pharmacy technicians, and the issue varies considerably between countries and regions. The difference may be related to population size and local needs.34 A WHO survey showed that population density of pharmacists ranged from 0.02 pharmacists per 10 000 population in Somalia to 25.07 per 10 000 population in Malta.35 So far, no internationally recognised minimum recommended density of pharmacists has been established. Pharmacists have been encouraged to serve rural communities through public health partnerships and government policies in multiple countries.34 36 37 However, to the best of our knowledge, very little research has been done on this topic.

Academic qualification of CPs

Pharmacists with lower educational levels were increasingly occupying China’s retail drug market.18 Regional disparity is also pronounced in the distribution of academic qualifications (online supplemental table S4). North China had the highest percentage of CPs holding a master’s degree and above (1.1%), which may be the consequence of the concentration of educational resources around Beijing-Tianjin-Hebei Metropolitan Region, also known as the National Capital Region. Limited career growth prospects of the professional discourage those with higher education credentials from working as a pharmacist in a community environment. And the low expected financial returns and excessive costs to attain a higher academic degree do not help alleviate the problem. Although 44.4% of CPs in a survey in 2019 were unsatisfied with their academic degrees,38 degrees are not highly valued in performance evaluation and promotion considerations in their company. In the majority of time, sales were the most important metrics. Even the very few ones who successfully obtained higher degrees tended to leave the current position and work in other settings or take on management positions. Few of them remained on the frontline to provide pharmaceutical services to patients. About 39.0% of CPs admitted that lack of knowledge and skills negatively affected their work especially when they needed to provide comprehensive medication guidance.38 The loss of high-level talents will unavoidably lead to a decline in the capacity and quality of community medical services and exacerbate the imbalance resource allocation among different regions. The good news is that according to the NMPA, the minimum qualification for taking the pharmacist licensure exam has been raised to associate degrees from 2021. It is expected to increase the overall educational level of CPs in the future. Moreover, education programmes were found to improve the treatment behaviours of CPs.22 Compulsory continuing education courses can also improve the professional ability of CPs at a lower cost compared with attaining a higher degree. Other feasible methods include specific professional training on health literacy, communication skills, point-of-care testing, chronic disease management, emergency care and remote pharmacy operations and patient care.39 40

Our study used data from government website to present the trajectory of the pharmaceutical retail industry and CP availability and qualification in mainland China over 7 years. In addition to national results, we also presented results on province level, where we found consistent geographic disparity favouring economically developed regions across most outcomes. To our knowledge, no published study has assessed the status of pharmaceutical retail market in China in this way. We provided important insight for policy makers, professionals, enterprises and researchers using the latest data. Our data included the year 2020, when the COVID-19 hit the world and the pharmaceutical industry took on an extra lift. The trajectory of all our results showed a steady growth in the industry despite the global pandemic. However, we do realise that with province level data, all the results presented had an underlying assumption that the situation was consistent within each province, which was not the case. Disparities within province exist and we could not capture that using our data. Rural communities may suffer from even less access to pharmacy stores and CPs compared with those live in major cities. For some rural areas, technicians, or unlicensed pharmacists, are available to dispense medications and provide services for local communities. However, no national data about them are available. Future studies should include them to capture the full picture of retail pharmacies and pharmacists in China.