The idea of operating a com- munity pharmacy in Kenya seemed non-lucrative and abstract a decade ago, with low investor confidence in the business model. A number of them, however, continue to spruce up strate- gically located in busy towns and buzzing estates across the country. Haltons Limited is one such community pharmacy – a story of grass to grace.
By Stephen Macharia
The company, which started a single business entity has registered stellar growth to 52 pharmacies in less than a decade, “providing replicable medical services across all branches”.
“Our growth highlights the potential of a business model many people deemed null and void,” said the pharmacies’ chief pharmacist and founder, Louis Machogu. A sundry thought that Dr Machogu was committing a career suicide when he showed the government sector his back and ventured into the community pharmacy retail business.
Founded in 2007, the company currently boasts of an annual turnover of over Sh190 million and a workforce of 180 – a majority of whom are pharmaceutical technologists. Haltons projects to grow its revenue to Sh 600 million with the current number of branches with further predictions to touch the Sh1 billion mark after opening 50 other branches. It targets 200 branches by 2018.
The pitiable healthcare services and a desire to create an “ecosystem of quality” medicine for patients in Kenya, is what hatched the dream to start the first corporate chain of community pharmacies in the country, said Louis.
“We were the first to start a chain of pharmacies in a corporate way. Other people were doing it but as one- man show. We run as a corporate with internal corporate governance structures that include quality assurance and integrity of products,” Mr Machogu said in an exclusive interview with the Health Business magazine.
According to him, Haltons carries the vision of standardised quality pharmacy services in the country. Machogu also believes that emerging Pharmacy chain set to reduce cost, offer quality health care Service in one of the Haltons Pharmacy Branches The idea of operating a com- munity pharmacy in Kenya seemed non-lucrative and abstract a decade ago, with low investor confidence in the business model.
A number of them, however, continue to spruce up strate- gically located in busy towns and buzzing estates across the country. Haltons Limited is one such community pharmacy – a story of grass to grace. pharmacy chains such as Goodlife and Safedose further Haltons course of professionalised pharmacy services and place the country on track to achieve quality drugs for Kenyans, promoting industry self-regulation.
“Chains of pharmacies do not compete but complement each other in promoting the idea of chain outlets,” he said adding that his dream is to see community pharmacies become the norm in provision of healthcare. That, according to him, will standardise pharmaceutical services and lead to cheaper cost of medication.
He urged pharmacists to institute measures to curb counterfeit drugs by professionalising pharmacy business through stocking of quality drugs and employing qualified staff. Pharmacy chains according to Louis will institutionalise quality pharmacy services and help the Pharmacy and Poisons Board (PBB), the industry regulator, eliminate quark pharmacists and backstreet chemists.
“By branding ourselves, we take responsibility of the medicine we sell and assure you that they are qualified,” he said. Chain pharmacies are also expected to lower cost of medication in the country. Haltons for example plans to venture into small towns and operate “small localised stores as opposed to large ones.”
By covering these towns, locals will reduce distances travelled to access medicine. The pharmacy chain also expects to reduce cost of medicine owing to benefits from economies of scale emanating from purchasing large volumes of drugs from suppliers.
Louis opened a can of worms in the sector saying the cost of medicine in Kenya is high and insurance companies should cease exploiting existence of chain pharmacies to innovate cheap medical products for the mass market.
Medical insurance covers form a lucrative business for underwriters inviting insurance companies to work with chain pharmacies to provide outpatient cover, he said. Medication cost will also reduce “if physicians and pharmacists work together to reduce risk of a patient taking ineffective medicine in terms of cost and curing the disease” according to him.
The pharmacy chain founder invited specialist pharmacists, particularly clinical pharmacists, to collaborate with Haltons and run specialist clinics at the pharmacy branches. He also added that consistent healthcare service delivery and investment in right personnel and healthcare equipment in public hospitals would further reduce cost of medication. Prior to Haltons pharmacies, “Kenyans were getting unqualified personnel serving them.
You found drugs stolen from government facilities and others acquired from dubious sources sold in the market. We decided to change that by stocking same quality drugs and hiring same caliber and quality of people to serve our stores,” he said. Mr Machogu also said Haltons pharmacies offer comprehensive medical services to patients. The pharmacy chain runs medical counselling units that monitors patients’ recovery process through technology.
Haltons pharmacies, the founder continued, offer a mobile phone service that reminds customers when medication is due for refill or when doctors have scheduled checkups. Haltons also monitors patients’ health progress on behalf of doctors in cases where patients experience side effects from the subscriptions. Haltons also advises patients on cost implications of prescribed innovator drugs.
Louis was however quick to add that Haltons pharmacists do not change patients’ prescriptions. “When we receive a prescription we review and call back the physicians. We tell them when clients complain about side effects from the prescribed medicine. If the physicians provides an alternative drug, we change but if the physicians insist on the same medicine, we do not change the prescription,” said Mr Machogu.
Mr Machogu urged the government and stakeholders in healthcare to conduct public awareness campaigns to educate masses on proper use of medicine. Counterfeit medicine, he said, raise cost of medication trough ineffectiveness in disease treatment and prolonged use. He also urged physicians to stop prescribing medicine by generic names only saying counterfeiters use commonly prescribed generic names to brand fake medicine.
The pharmacy chain stocks one innovator brand and two generics of medicine. Each type of medicine has a batch number traceable to specific suppliers to protect “integrity of drugs.” Halton customers can verify authenticity of medicine sold to them through a SMS code service. Haltons inception was predicated on Equity Bank’s business model that broke barriers to financial services access in Kenya.
Haltons founder says that the chain pharmacy wants to become the “Equity bank of pharmacy world” by breaking barriers to accessing quality health care. Doctors Louis Machogu, Edwine Barasa, Francis Mwaniki and David Ndambuki initiated Haltons limited then known as Haltons Pharma.
They each invested Sh 500,000 in the business opening the first pharmacy at Koinange Street, Nairobi. However, Halton’s growth has been fraught with challenges. In 2013, six years into operation, the company closed three outlets due to cash flow demands. Fanisi Capital, an investment firm, funded Haltons to continue expanding, becoming a shareholder in the business.
Louis however says Fanisi Capital will exit the community pharmacy chain after recouping the capital it injected into the business. He however did not specify when the investment firm would exit.