MedPlus Eyes 50-60% Revenue From 'Store Generics' In Next 3 Years

MedPlus Health Services, a retail pharmacy and diagnostics chain in India, is set to elevate its 'store generics' (in-house brand) to 50-60% contribution to the firm's revenues in the next two to three years, drawing inspiration from the successful practices of U.S. pharma retail giants like Walgreens and CVS.

The concept of 'store generics' involves a retail chain exclusively selling its own branded medications alongside innovator drugs. MedPlus currently witnesses around 12% of its revenues from store generics.

This strategic move follows the triumphant adoption of the 'store generics' model in Telangana and subsequent expansions into Andhra Pradesh, Tamil Nadu, Karnataka, Maharashtra, West Bengal, and Odisha, Gangadi Madhukar Reddy, managing directore and chief executive officer of MedPlus said.

Over the past six months, MedPlus has witnessed over 26.2 lakh customers saving a substantial Rs. 139.7 crores by opting for MedPlus brands, he said.

To ensure the quality and efficacy of their medications, MedPlus has strategically partnered with India's leading Contract Drug Manufacturing Organizations, including Akums India and Windlas Biotech—organizations synonymous with the high standards adhered to by top pharmaceutical companies in the country.

Reddy underscores the importance of educating consumers about the advantages of store generics. He envisaged 50-60% of MedPlus's sales from their proprietary brands.

Definitely Private label is gaining traction and contextually MedPlus wants to move from just growth and number of stores to educating the people and changing the business model, he explained.

“Medplus Now feels that we have the size and the capability to start putting out (selling store brands) which will make it efficient for everyone. It’s a slow process. This whole thing is basically educating people,” he told PTI.

“In future absolutely I see no reason why (we should not be doing 50-60% sales from sore generics). But it depends on how quickly the market accepts,” he said.

Reddy believes that widespread adoption of this approach by other industry heavyweights, such as Apollo and Tata 1MG, would facilitate the acceptance of store generics among consumers, leading to significant cost savings.

In Telangana, where store generics were introduced in June of the previous year, they currently contribute approximately 15% to the state's overall sales.

Across its expansive network of over 4,200 pharmacies in 10 states, MedPlus presently offers more than 600 off-patent medicines under its own brand.

Reddy assures consumers about the quality of their drugs, emphasizing the stellar reputation of their manufacturing partners—Akums Drugs and Pharmaceuticals Ltd, Windlas Biotech, and others—known for their excellence in pharmaceutical manufacturing.

The commitment of the partners aligns seamlessly with MedPlus's vision to provide consumers with high-quality and genuine medicines, he added.

MedPlus clocked Rs 1451 crore consolidated revenues with about Rs 14 crore profit after tax in the third quarter ending Dec. 31.