1.1 Definition and presentation

Parapharmacy is a commercial activity that deals with the distribution of Over the Counter (OTC) or health products, for the purchase of which there is no need for a medical prescription. The birth of the parapharmacy is recent and dates back to the Bersani Legislative Decree of 2006, which was aimed at liberalizing the sale of certain pharmaceuticals and parapharmaceuticals products.

The dividing line between pharmacy and parapharmacy therefore refers precisely to the authorization to market pharmaceuticals for which a medical prescription is required. Both pharmacies and parapharmacies are required to have a pharmacist present at any time. Parapharmacies are therefore a sub-segment of the pharmaceutical industry, along with the "Grande distribuzione organizzata" (GDO).

The pharmaceutical segment in Italy does not seem to have been affected by the economic crisis and shows a constant positive evolution, mainly driven by the growth of complementary markets (e.g. organic cosmetics, dermo cosmetics, food supplements). Pharmacy is still a dominant distribution channel in these markets, to the detriment of the parapharmacy both in terms of sales volumes and value. However, parapharmacies are the distribution channel that has experienced the largest growth from 2016 to 2019. As a matter of fact, the turnover of parapharmacies has increased by 19.6%, whereas those of pharmacies and GDO no corner have remained fairly constant, with increases of less than 1%, and the turnover of GDO corner has decreased by 5%.

The pharmacist is perceived as a professional figure of reference that gives important advice for the health of patients by 65% of italians. As a matter of fact, 75% of people prefer to buy pharmaceuticals and extra-pharmaceuticals in a commercial activity that they know and trust.

The parapharmacy market growth has been supported by a positive trend in the supplement sector. Indeed, compared to 2014, the sale of supplements has increased by 33.8%.

Although Italians still prefer to purchase medicine and wellness products from a pharmacy or parapharmacy in their area, the broader pharmacy market is moving towards digitalization. According to a recent survey carried out by Doxa, 60% of consumers would be open to the purchase of pharmaceuticals of the website of the pharmacy. Since 2016, the first year in which the sale of OTC and SOP drugs was liberalized, the number of pharmacies and parapharmacies authorized to sell online has soared rapidly, reaching 1060 in 2020.

1.2 A very diversified European market

The European market is very diversified in terms of players present on the territory. In Europe, there are approximately ***.*** pharmacies. The countries with the most pharmacies are Turkey (***).

Italy is right below the European average of *.***, with *.*** inhabitants per pharmacy.

Fonte: Federfarma

Numero delle farmacie per numero di abitanti in Europa Europa, ...

1.3 A weak national market growth

The parapharmacy market is included in the broader pharmacy market. According to Iqvia, the latter is divided between:

Ethical sector: medicine that can only be dispensed by a pharmacist in a pharmacy in the presence of a medical prescription. This sector is further divided into:

-farmaco di fascia a: essential medicine ...

2.1 Demand drivers: health, seasonality, and consumer habits

The demand for some categories of pharmaceuticals, such as self-care pharmaceuticals and parapharmaceuticals, is tightly linked to the health conditions and medical needs of Italians, whereas the demand for some extra-pharmaceuticals, such as beauty products and nutritionals, is more linked to customers' behaviours.

Altogether there are ** million italians who suffer from ...

2.2 The growth in digital habits

Although Italians still prefer to purchase medicine and wellness products from a pharmacy or parapharmacy in their area, the broader pharmacy market is moving towards digitalization. According to a recent survey carried out by Doxa, **% of consumers would be open to the purchase of pharmaceuticals of the website of the pharmacy. ...

2.3 Demand trends: supplements, dermocosmetics and organic products

The growth of the parapharmaceutical market is supported mainly by the positive trends in the supplements, dermocosmetics and organic products.

Supplements

Supplements, with sales in **** of *,*** million euros, grew by **.*% compared to ****. A strong upward trend, although in **** the increase was more contained (***), while the parapharmacy has *% and Gdo *%.

Tasso di ...

2.4 The impact of Covid-19

Despite an initial increase in the demand for extrapharmaceuticals products, such as masks and sanitizing gels, as a consequence of the outbreak of the Covid-** pandemic, the decreasing demand for other products has offset the positive demand trend.

In the first weeks aftern the outbreak, the demand for products for hygiene ...

3.1 Parapharmacies as the penultimate step of the value chain

The value chain of the parapharmacy market comprises several step. First, raw materials and equipment, such as active ingredients, glass, cardboard, glass and machines, are supplied to pharmaceuticals companies, which transforms them or use them to produce pharmaceuticals and health products. The pharmaceuticals are then handed to depositories, which are responsible ...

3.2 Market structure: number, structure and geographical location of parapharmacies

The legislative Decree no. *** art.* of * July ****, which opened up to the possibility of selling certain types of medicines outside of pharmacies to achieve an economic and social revival, marked the birth of parapharmacies. Since its implementation, the number of parapharmacies has increased rapidly in the entire territory, reaching **** in ****.

Analysing ...

3.3 The boom of e-commerce

By virtue of the European Directive (***), which allowed EU member states to decide autonomously on the marketing of medicines within their borders, since **** online sales are possible in Italy for non-prescription drugs, so-called SOPs, and otc after being granted approval from the Ministry of health.

Since ****, the number of pharmacies and ...

4.1 Offer overview

The offer in the parapharmacy market can be summarized as follows:

OTC & SOP: Also called "over the counter" and "senza obbligo di prescrizione" are non-prescription drugs, which can be sold without a prescription and are non-refundable. OTC differ from non-prescription drugs for the freedom of direct advertising to the public, through ...

4.2 The importance of OTC products in the offer

In parapharmacies, the offer is mainly composed by OTC, which represent **% of the total offer. In second place we find the personal care segment, with **%, and the patient care segment, with **%. The nutrition segment represents only a marginal share of the offer (***). This figure is due to of its large volumes ...

5.1 Italian Regulations

Birth of parapharmacies

The possibility of selling certain types of medicinal products outside pharmacies is provided for by art. * of Legislative Decree no. *** of * July ****, containing "Urgent provisions for the economic and social revival, for the containment and rationalisation of public expenditure, as well as interventions in the field of revenue ...

5.2 Steps to open a parapharmacy

In order to open a parapharmacy, there are several steps:

Develop a strategy: It is important to analyse the territory and existing competitors to develop a coherent strategy in line with the goals, skills and attitute of the future staff Choose the location: he choice of the place is mainly influenced ...