[Good Job SME]⑦ Pharmacy Franchises Leading the 'Digital Transformation' in the Pharmaceutical Industry

Pharmacy Franchise WithFarm
Interview with Park Jung-kwan, Vice Chairman of WithFarm
"Digital Transformation and Medicine Delivery: The Trend of the Times"

Editor's NoteSmall and medium-sized enterprises (SMEs) are the backbone of the national economy. Numerically, 99% of companies in our country are SMEs. SMEs are the workplaces of the people. 81% of workers are employed by SMEs. When SMEs falter, our economy shakes and the jobs of the people are threatened. However, negative perceptions of SMEs persist. Low treatment and unguaranteed 'work-life balance', and uncertain future growth potential. Despite the employment difficulties, young people do not choose SMEs. Here are people who fight against such prejudices and create good jobs and SMEs. They develop technologies that can compete with large corporations. They also devote efforts to building sound financial structures and corporate cultures to provide a stable living environment for employees. On the ground, there is the struggle of SME owners to fulfill corporate social responsibility while nurturing companies where employees can take pride. Asia Economy visited the field and directly heard their voices.

'McDonald's, Starbucks, Paris Baguette...'. These are franchise brands familiar to the public. Pharmacies, which are as commonly seen as these brands in hospitals or commercial buildings, also have franchises. Pharmacists focus on their core duties such as dispensing and medication counseling, while the franchise headquarters supports the hardware and software necessary for pharmacy operations, including drug purchasing, IT systems, and academic education. Pharmacy franchises are currently deeply considering digital transformation accelerated by COVID-19 and medicine delivery services. We met Park Jeong-gwan, Vice Chairman who founded the pharmacy franchise WithPharm in 2000 when the separation of dispensing and prescribing was implemented in Korea, at the headquarters in Seocho-dong, Seocho-gu, Seoul.

Emphasizing 'Pharmacy Digitalization' Even Before COVID-19

Jungkwan Park, Vice Chairman of Withfarm (CEO of DRx Solution)

Vice Chairman Park greeted us and handed over another business card besides the one for Vice Chairman of WithPharm. The title on the card was 'CEO of DRx Solution'. Park said, "In the global trend of the Fourth Industrial Revolution, I pondered how to prepare pharmacies for digitalization and established the subsidiary DRx Solution in 2017," adding, "In the future, all activities happening in pharmacies could take place online."

Park emphasized through lectures and articles that pharmacists should prepare for digital transformation years before COVID-19 accelerated digitalization in the medical and pharmaceutical industries. However, due to the closed and conservative nature of groups like the Korean Pharmaceutical Association, changes did not occur easily. Park believed that creating a culture of digital communication connecting patients and pharmacies would change this perception. For this reason, in 2018, DRx Solution launched the smart pharmacy platform 'Naesonaneui Yakguk' (Pharmacy in My Hand).

Naesonaneui Yakguk provides personalized services based on patient data such as pharmacist consultations, medication reminders, medicine pickup, and medication notebooks. The 'Medication Reminder' service notifies patients of their medication times and rewards points usable at pharmacies when patients take their medicine. Park explained, "Although Korea has excellent medical systems and infrastructure, medication adherence is low," adding, "This is a major cause of delayed treatment and disease worsening," explaining the background of the service introduction.

The 'Polypharmacy Counseling' service is another key service devised by Park. According to a National Health Insurance Service survey, among people with one or more chronic diseases, 1,175,000 people (2.28% of Korea's population) took 10 or more medications for over 60 days last year. Research also shows that elderly patients taking five or more medications have an 18% higher risk of hospitalization and a 25% higher risk of death compared to those who do not. Park said, "The risks of inappropriate polypharmacy are serious, but the general public is not well aware," adding, "Customers using our application can consult with professional pharmacists about polypharmacy." He plans to introduce services linked with 'ChatGPT' in the future.

"Medicine Delivery Is the Trend... Pharmacist Juniors Need Broader Perspectives"

DRx Solution's smart pharmacy platform service 'Naesonaneui Yakguk' (Photo by DRx Solution)

Before founding WithPharm, Park graduated from Yeungnam University College of Pharmacy and served 16 years as a pharmaceutical officer at the Ministry of Health and Welfare. He was responsible for drug approvals, narcotics control, and insurance reviews. This experience has made him highly interested in pharmaceutical policies and legal implementations.

He did not hold back criticism regarding the current hot topic in the pharmaceutical industry: medicine delivery. Despite many patients wanting medicine delivery and the government moving to allow it in a limited way, the Korean Pharmaceutical Association blindly opposes it. Park said, "Pharmacists should have taken the lead in managing medicine delivery from the start," adding, "We need to move to the stage of thinking about how to deliver medicine well to patients, not just opposing delivery because it is behind the times." He continued, "The US and Japan have introduced medicine delivery and achieved growth in the pharmaceutical industry," adding, "Among the 38 OECD countries, Korea is the only country that does not offer medicine delivery."

Park advised younger pharmacists not to choose only opening their own pharmacies but to advance into various fields such as public service. He said, "In the past, many pharmacists worked at the Ministry of Food and Drug Safety, but now most are oriental medicine doctors," adding, "Young pharmacists need to actively participate in policy-making to create a better system in the pharmaceutical industry."

In October last year, the 'Park Jeong-gwan Lecture Room' was established in the seminar room of Yeungnam University College of Pharmacy. Park Jeong-gwan, Vice Chairman of WithPharm, has been awarding scholarships to Yeungnam University students since 2021.

Consistent Growth for Over 20 Years... Pension Payments to Retirees

WithPharm has steadily grown from 34 billion KRW in sales at the end of 2001 to 89.6 billion KRW in 2010, and surpassed 200 billion KRW last year. This year, the sales target is 230 billion KRW. About 30 member pharmacies are located in front of major hospitals nationwide, including Seoul National University Hospital, Asan Medical Center, Samsung Medical Center, Severance Hospital, and Gangnam St. Mary's Hospital.

WithPharm has a unique welfare system called 'Retirement Stability Fund.' In addition to annual salary and severance pay, the company deposits 1 million KRW monthly into a bank pension account under the employee's name. When employees retire, they receive monthly pension payments to support a stable post-retirement life. For example, an employee who works for 30 years and then leaves receives about 1.55 million KRW monthly, including the principal and interest. Park said, "Adding the Retirement Stability Fund to the national pension will make old age life not so difficult," adding, "Employees' futures must be stable for them to work happily and better within the company."

Located in front of Seoul National University Hospital in Jongno-gu, Seoul, 'Seoul With Pharm Pharmacy' (Photo courtesy of With Pharm)