Three months building software for pharmacies

Since I wrote this article, the situation has changed. Orkava has pivoted slightly, and it is moving forward. I’m leaving the article up until I rewrite it.

We interviewed some 70 pharmacies, installed the product in 12, and ended up concluding that the business model we believed in doesn’t work.

Why pharmacies

Lluís is a friend of mine, son of pharmacists, who has spent his whole life around the pharmacy. He told me about its problems, his ideas, and the current state of pharmacy software. I saw the opportunity to add value.

The pharmacy market

Pharmacy is a low-margin business that is getting harder and harder to defend. There are two paths pharmacies are taking to stay competitive.

Volume and margin

A strategy on the rise in Europe, and with great success in France, is joining a pharmacy into a group. Buying groups have more negotiating power than independent pharmacies, and therefore lower acquisition costs. Beyond buying groups there are the “brands”, which add image, consulting, and management tools.

Both models are attractive for the pharmacy because they simplify management and help raise the sell-out. In a situation where full-stack management requires more and more work and the return is harder to achieve, it is easy to understand why they grow.

Differentiation and services

The pharmacy increasingly positions itself as a reference point for much more than dispensing: offering services. Orthopedics, biomedical parameter analysis, SPD… This is driven both by pharmacies themselves and by governmental organizations, which want to reduce the workload of medical institutions and turn the pharmacy into a health reference.

Orkava

The pharmacist has little time and must do a thousand things, and often has no optimized processes: stock management, generic substitution, cross-selling, patient loyalty… Orkava is born to help with all of this. The rest is the story of how we kept changing hypotheses to achieve it.

What we learned

When we started, we thought the pharmacist needed a layer of intelligence on top of the ERP to make better decisions.

We attacked the most obvious processes: stock management, generic substitution, cross-selling, patient loyalty, internal tasks and schedules. All of these features bring value, but none is part of the day-to-day. They are consulted when there is a specific doubt, but they don’t create a habit.

We confirmed it with the first results: we have spoken with about 70 pharmacies and installed 12 with personalized follow-up. Of those, only 4 use it daily, 5 weekly and 3 don’t use it. None exploits Orkava the way we imagined.

We tried to reduce friction by putting everything inside a chat. It has been useful for concrete questions, like analyzing a brand or understanding a margin drop, but it has not created pull. The pharmacist only opens the chat when they already have a question, and that rarely happens.

Then we made Orkava more proactive with notifications about unpaid invoices, stalled stock, expirations and other incidents. That didn’t work either: many alerts don’t lead to a clear action, and it is hard to demonstrate value without measuring whether the action was taken, or what impact it had.

The marketing module followed the same pattern. Pharmacies that already did marketing took advantage of it and didn’t want to change; those that didn’t, didn’t create new processes.

The next hypothesis was that we were outside the workflow. If we wanted to be part of the day-to-day, we had to be present at the moment of the sale. Integrating with the ERP was much harder than we expected, but we managed it through other routes :).

The result wasn’t enough either. Popups seem useful at first, but they quickly become just one more thing on the screen. Recommendations centered on the patient and their history bring more value than the typical product suggestions, but we didn’t see enough evidence that they could become an indispensable part of the sale.

The conclusion is that we haven’t managed to enter any indispensable workflow of the pharmacist. We have built a layer of intelligence for the pharmacy, but it depends on the pharmacist deciding to consult it. And that is precisely the problem: if the product is not part of a mandatory process, it ends up being a tool that seems useful, but that is used less and less.

The competitors

The product most similar to Orkava that is well positioned is Sisfarma. They position themselves as the CRM of the pharmacy. The webapp is a clunker, and the pharmacists we have spoken with who have it don’t use it.

How did they manage to enter the market? Because they are actually a consultancy.

YOU ARE NOT ALONE: TECHNOLOGY WITH THE SOUL OF A CONSULTANCY

Sisfarma is not just software. We put at your disposal a team of expert advisors in profitability with whom you will meet every month to analyze your pharmacy, set strategies and guarantee results.

Consulting works in the pharmacy world, and there are several players. Sisfarma has done it very well: by building the platform, with less dedication and staff they can offer sufficient consulting.

Intelia Pharma puts a popup that recommends products based on other products. The pharmacies we have spoken with that have it are unhappy: it is expensive and ends up ignored. I think their approach is mistaken, because it starts from the product and not from the patient’s history.

There is no player that has managed to enter the market by placing itself at the moment of the sale.

A mention for Blistersuite, which has found a flow the pharmacist must perform due to new regulation and which is not integrated into the ERP. The program leaves a lot to be desired, but it does its job and has captured the market (which is small).

Opportunities

The clearest opportunity is competing with Sisfarma with a service-as-software model: becoming a consultancy and trying to optimize all processes with AI.

I personally think that analysis and sales enhancement could create market, but they would need to be invisible: audio to text, smart glasses… And all of that implies passing patient information to third parties and obtaining consent, especially delicate because health is involved. Legally impossible.

I haven’t explored tooling for pharmacy groups. I believe they will keep growing and that truly independent pharmacies will practically disappear, so there is an emerging market (comparisons between pharmacies of the same group, benchmarks, centralized management of own brands, stock, replenishment…).

Another option is positioning on the side of the laboratory or the brand. They have the budget to educate the pharmacist and to interact with them commercially. One can try to automate this work, or even give tools to the pharmacist (funded by the laboratory) to remove friction, ease processes or increase their knowledge.

And finally, building a modern ERP. What it will take is to wait a few years, for generational turnover, and for the regulations of the pharmacists’ college to pass. It will probably come from the ERP itself.

Conclusion

In the pharmacy, technology is adopted when it solves a mandatory workflow: the ERP for the e-prescription, Blistersuite for the regulation.

I don’t see any product without consulting that can currently create market in this space. I believe that, in a few years, ERPs will gradually introduce these flows, but it is very hard to compete with them.

Orkava is dead. We have the opportunity to enter the market and replace Sisfarma in some pharmacies, but from the beginning we decided we would not be consultants.