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Promoting Private Sector Collaboration: IMPACT’s Success in Connecting Pharmaceutical Wholesalers and Drug Shops

The Improving Market Partnerships and Access to Commodities Together (IMPACT) program, funded by the United States Agency for International Development (USAID) and led by Population Services International (PSI), aims to improve the capacity of the Malagasy health system to ensure that quality pharmaceuticals and health commodities are available and accessible to all Malagasy people on a sustainable basis. As a member of the IMPACT Consortium, Banyan Global worked to expand engagement with the commercial sector to serve new health markets based on consumer needs and demand.

The stand of a wholesaler who sponsored a meeting of the drug shop association in Atsinanana in November 2021.
The stand of a wholesaler who sponsored a meeting of the drug shop association in Atsinanana in November 2021.

Drug shops, which distribute health commodities in remote areas not served by formal pharmacies, face challenges in obtaining pharmaceutical supplies. Regional pharmaceutical dispensaries can be expensive, and drug shops are usually too small to obtain discounts from wholesalers. Over the past four years, IMPACT has been helping drug shops become more professional and organized by providing support in three areas:

  • Access to finance
  • Business training
  • Organizational support to establish regional associations

While IMPACT worked to strengthen the drug shops themselves, the project also forged stronger relationships between drug shops and pharmaceutical wholesalers. By including these commercial importers and distributors of health commodities in project activities, IMPACT helped build a more dynamic and sustainable distribution channel. In the past, these wholesalers were more accustomed to working with pharmacies, but with IMPACT as a partner, the wholesalers now see drug shops as an important new market.

“We have been able to develop our distribution network thanks to the partnership with IMPACT. The training sessions led drug shop owners to contact us during each event, and we have always responded and intend to continue.”

Lalaina Rajaonantenaina, Pharmatek Sales Manager, and Richad Goulzaraly, Pharmatek Business Development Manager

Initially, IMPACT invited pharmaceutical wholesalers and laboratories to participate in the project’s business training sessions for drug shops. Wholesalers were given the opportunity to give a brief presentation of their products during the training and to have a table at the event where they could meet with drug shop owners and discuss their offerings.

Wholesalers have been invited to participate in each training session in exchange for sponsoring part of the cost of the training—usually about half of the cost of the venue rental and meals provided during the two-day training. This private sector engagement is mutually beneficial. The selected wholesaler is given the opportunity to reach a new market, the drug shop owners learn more about a supplier and product, and the project can co-finance an activity. Wholesalers showed great interest in these new market opportunities and calls for training sponsorships often received more than one response. Selection procedures were implemented to ensure that different wholesalers had opportunities to attend different regional trainings.

Given the initial success of wholesaler sponsorships, IMPACT expanded this model to the newly established regional drug shop associations. Once a regional association has been formally established, it needs to hold a general assembly meeting. These meetings, which usually involve renting a conference space, providing meals and refreshments, and distributing printed materials, can be expensive for small organizations with modest member fees. IMPACT has worked with the association leaders to help them develop budgets and approach pharmaceutical wholesalers and laboratories that may be interested in supporting association activities. This strategy has included a partnership in financing the organization of associations’ general assembly meetings and training sessions on the health commodities sold by wholesalers.

“Meetings with stakeholders are beneficial for us because we can see the reality up close and discuss it face to face for an immediate solution to strengthen our links with these drug shops for future collaboration.”

Michel Rakotondrainibe, CEO of COFARM

This type of event constitutes a source of financing for the drug shop associations’ organizational needs, while providing the wholesalers a platform to market their products, and an opportunity for drug shop owners to learn about and gain access to new sources of quality pharmaceuticals.

Wholesaler sponsorship has ranged from 50 to 95 percent of the budget, or about $400-$600, for meetings with 15 to 30 participants. A dozen wholesalers and laboratories have worked with IMPACT and its partner associations: CAP PHARMA, Cipla, COFARMA, Epione, FAES FARMA, IMRA, Pharmalife, Pharmatek, Shifa, SOMAPHAR, SOPHARMAD, and Sunrise.

Thanks to the work of the IMPACT team in engaging these private sector stakeholders, pharmaceutical wholesalers and laboratories have developed sustainable partnerships with drug shops and their associations. This has enabled them to establish connections and ensure better access to health commodities for people across Madagascar.