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CHAPTER I

OVERVIEW OF THE PHARMACEUTICAL SECTOR AND THE CHAINS

FROM PHARMACIES

A. PHARMACEUTICAL SECTOR

The history of pharmacy is included within the discipline that makes up the history of
science. Since ancient times the medical sciences, medicine, surgery and pharmacy have
been united and only from a historical point of view have they been separated.

There is a link between pharmacy and medicine, whether we define pharmacy as the
evolution of medicines and their different professionals, or as the manufacture and control
of medicines; Thus it would remain linked to medicine due to the problems derived from
drug research and introduction into the body.

By nature, man has always tried to find a way to improve and alleviate his physical ailments
with the use of artificial or natural substances that existed in his environment. This became
a process of scientific and constant research, through which very valuable information has
been accumulated, which until now, has allowed us to distinguish useful substances that
relieve and prevent diseases from ineffective and harmful ones.

1. Background of the Pharmaceutical Sector

The history of pharmacy as an independent science is relatively young. The origins of

pharmaceutical history date back to the first third of the 19th century, which, although it
does not touch on all aspects of pharmaceutical history, is the starting point for the
definitive start of this science. There are no testimonies of the medicines used in the
Paleolithic and Neolithic period, but it can be deduced from the knowledge we have of the
civilizations of that time, that the healing methods were associated with the use of plants,
mainly in the healing of wounds.

The transmitters of this knowledge were mainly the elders, witches or priests of the tribes,
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who in turn were in charge of caring for the sick and injured; They cured them, prepared
primitive medicines and administered them to them. Some sought natural substances for
healing, tentatively selecting them based on their effect and seeking information on the
results, which they then passed on from generation to generation. So from this practice the
common origin of medicine and pharmacy is deduced. The equivalent functions that doctors
and pharmacists perform today; They were performed by the same person in ancient times. I

Talking about the Pharmaceutical sector is, without a doubt, talking about an economic
component that is very useful to society and the economy. This sector provides qualified
support to the general population by contributing with medications that improve and provide
general health.

The commercialization of pharmaceuticals in El Salvador dates back to very ancient times,

in which a date cannot be established that serves as a basis to determine the birth of
indigenous knowledge, the effectiveness of which has been known since the arrival of the
Spanish in the year 1492. During colonization, many events occurred that forced the
colonizers to look for other sources of wealth in addition to gold, which resulted in interest in
other products that could be successfully marketed in Europe.
The knowledge that the indigenous people had about medicine meant that during the
colony the indigenous pharmacopoeia was used more than the European one, which has
made this trend persist to this day. Pharmacy continues to evolve until the year 1681, when
the University of Guatemala is founded.

The history of the commercialization of pharmaceutical products in the country dates back
to the beginning of the last century, with which some pioneers in laboratories were born.

Pharmacists. At this time, the production of medicines functioned freely, without legal
regulations or defined requirements. It was not until September 10, 1958 that the
regulations governing the Regulations for Medical Visitors were published in the official
journal No. 168, volume 180.

I RIUS, MAGDALENA. Kaleidoscope, historical background of pharmacies. [Online]. Consulted on August 19,
2007. Available http://www.posgrado.unam.mx/publicaciones/omnia/anteriores/26/08.pdf
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This regulation classifies medical visits as an auxiliary technical activity of the

pharmaceutical profession, and under these legal principles, pharmaceutical promotion
II
continues to develop, particularly with regard to the promotion of ethical medicines.

1.1 Substances used for healing in ancient times

Since primitive times, man has fought against diseases, the need to cure himself and the
empirical knowledge of numerous natural products made him understand that diseases
could be treated with substances from nature, because ancient therapy consisted of
empirical use. of regional drugs.

The therapeutic arsenal used increased considerably, many plants, fruits, cereals, flowers,
resins and barks were added; some minerals, especially sulfur, arsenic and its salts,
antimony, iron and its salts, pyrite, copper and mercury,

II CORTEZ ALBERTO. Strategic alternatives for the economic reactivation of El Salvador, prioritizing the
satisfaction of the basic needs of the medicine sector. El Salvador, Universidad Centroamericana José Simeón
Cañas, 1989, p. 2
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alum; and also other substances of animal origin such as: meat, viscera, fat, blood, even
excrement. Gradually, we moved from primitive forms of administration (crushed,
macerated or cooked plants) to more complex formulas such as: pills, ointments, powders,
ointments and enemas.

The discovery of America in 1492 had a great impact on pharmacology, since when the
new world was explored, several valuable drugs were discovered for their curative
properties, such as: coca, tobacco, ipecac, jalapa, sarsaparilla, balsam of Peru and balsam.
from Tolu. III

2. History of Medications

The application of remedies to heal or, at least, to alleviate suffering, is as old as humanity.
That is why it is very difficult to determine when the practice of medicine begins.

There is data from the Paleolithic period where

plants and parts of the
animals. Therefore, the practice is older than the
word. It is known that in Mesopotamia, Egypt and
China chemical processes were used to prepare
remedies.

In ancient times, medicine and pharmacy were

practiced jointly and, generally, by
priests. They had time to speculate about the
origin of the changes they observed in the world around them. Their theories had a lot of
magic, but they also developed astronomy, mathematics and, to a certain extent, chemistry.

The Greeks, who were well versed in drugs and their virtues, spread pharmacy in Europe.
The school of Hippocrates already made use of many therapeutic preparations. On the
columns of the temple dedicated to Aesculapius, god of medicine, they already wrote
recipes for some pharmacological combinations.

5
III PATRICIA LINN. The search for the elixir of life, Medicines: from natural to artificial. [Online]
Consulted22 August of 2007. Available
at: http://hosting.udlap.mx/profesores/miguela.mendez/alephzero/archivo/historico/az25/medicamentos.html
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For the Greeks, "Phycis" had a divine origin and they attributed the power to heal to the
gods of power. Aesculapius, also known as Asclepios, was the god of health; His daughters
Hygea and Panacea were the goddesses of drugs. Hygea is the goddess of the pharmacy
and is represented with a snake coiled around her right arm emptying its poison into a cup.
The belief was that the gods cured with the poison of these reptiles. This being the symbol
of medicine, a snake coiled around the staff of Aesculapius.

Poisonous substances were objects of special studies, as entities distinct from medicines.
Mithridates standing out in this area, created "mitridata" (resistance to a poison), a potion
that served as a universal antidote for several centuries. He is considered the father of
Toxicology.

The Romans also organized medical and pharmaceutical knowledge, turning theories into
rules and norms. Two characters concentrated excellence in the Roman world: Dioscorides
and Galen. The first collected plants and classified them for medicinal purposes. His work
"Materia Medica" contains information on more than 600 drugs, most of them plants, and
refers to descriptions, morphological characters, synonymies and medical use. Galen, for
his part, emerged when medicine had fallen in Rome. He followed Hippocratic principles
and made a systematic work of all medical knowledge in his great treatise "On the
therapeutic method."
Also in America, indigenous cultures developed remedies against disease over the
centuries. In Peru, cinchona was used to treat malaria, and the Yanomami Indians used
curare to hunt, paralyzing their prey with arrows soaked in this substance.

A key figure in the 16th century is Paracelsus, a Swiss naturopathic doctor, who insisted on
the importance of direct observation of nature and was the first to express the doctrine that
vital processes are chemical and, therefore, in The study of chemistry can find the cure for
diseases. Thus, he introduced numerous chemical remedies and taught the use of sulfur,
lead, iron, antimony and copper.

Until the beginning of the 19th century, apothecaries, chemists or owners of herbal shops
obtained their raw materials (plant bark, pickles, gums, minerals, etc.) locally or on other
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continents (opium from Persia or ipecac and cinchona bark from South America), acquiring
them through grocers and merchants. From these raw materials they made syrups,
ointments, tinctures, pills, etc. Some professionals made more preparations than they
needed.IV

3. Historical Background of pharmacies

Pharmacy is the practice of preparing and dispensing drugs; also the place where medicinal
products are prepared. Pharmacy is an area of materia medica, a branch of medical
science that deals with the origin, nature, properties, and preparation of drugs.

Pharmacists share with chemists and doctors the responsibility of developing new drugs
and synthesizing organic compounds with therapeutic value. In addition, advice on health
and hygiene matters is increasingly sought from the community of pharmacists.

In ancient times, pharmacy and medical practice were generally united, sometimes under
the direction of priests, men and women, who also assisted the sick through the use of
religious rites. In the world, many people maintain close association between drugs and
medicine, with religion and faith. Specialization first occurred in the civilized world around
Baghdad in the early 9th century. This gradually spread to Europe as alchemy, which over
time evolved into chemistry, as doctors began to abandon beliefs that were unprovable in
the physical world. Many times doctors prepared and prescribed medications; Some
pharmacists not only prepared prescriptions, but also manufactured large volumes for
marketing.

In the 17th century, the word pharmacy began to be used in the sense it currently has,
developing a more complex science, as reflected in the descriptions of the pharmacopoeia
of London and Paris. In this century, for example, the discovery of the smallpox vaccine by
the English doctor Edward Jenner stands out.

However, until the 19th century, the pharmacopoeia was made up of a whole apparatus of
drugs compiled, on the one hand, from the simple substances of ancient medicine (based

IV History of the drug. [Online] Consulted on June 8, 2008. Available at

http://www.larebotica.es/larebotica/secciones/historia/index.html
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on a mixture of magic and popular medicine), and on the other, by the metallic drugs with
more violent effects that Paracelsus had introduced in the Renaissance. And many of them
were useless. The success of advances such as the smallpox vaccine or the use of quinine
against malaria had a lot to do with what was fortunately accidental. The lack of adequate
experimentation or theory made its generalization impossible.

The distinction between the pharmacist as drugmaker and the physician as therapist did not
gain general acceptance until well into the 19th century. Currently, in many countries,
pharmacists are required to receive specialized university education lasting between three
and five years, followed by a period of internship, before practicing their profession.

Modern pharmacy comprises complex remedies that differ greatly from the elixirs,
concoctions, and powders described in the London Pharmacopoeia (1618) and the Paris
Pharmacopoeia (1639).

Most countries with a regulated healthcare system prepare a compendium, or formulary, of

authorized drugs and formulations.V

4. Functions of Pharmacies

The pharmacy is an establishment where medicines of different pharmaceutical forms are

dispensed or provided, whose basic sales are wholesale and mainly retail.

According to this, first of all, their main function is to support the health of the population,
through a range of medicines that satisfy basic needs, according to demand and the
market.

Among the characteristics that a pharmacy presents are:

• . The business structure: It is important since through it it allows you to know the
financial capacity, as a company. This includes:
• The amount of inventory: since this item constitutes the pillar of the economic activity that
the company itself has.

V Microsoft Encarta Encyclopedia: Pharmacy. [Online] Accessed August 22, 2007. Available at:
http://es.encarta.msn.com/encyclopedia_761574575/Farmacia.html
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• Degree of integration: Indicates the scope of your operations within the supply channels.
• Number of employees: the human resource that the company has and that designates its
operational magnitude.

5. Technology used in the supply of medicines: Which includes:

•Storage technology: Indicates that the infrastructure must meet the established
requirements. Medications should be stored so that those that expire immediately are the
first to leave the pharmacy; In addition to ensuring that the medications are in optimal
areas, in terms of temperature, order and cleanliness.

•Service Technology: Refers to the degree of benefit that a pharmacy must provide to its
customers with human, economic and technical resources. Maintain a supply of
medications according to the basic needs that the sector demands; in addition to providing
trained personnel with firm knowledge about the management and use of medications.VI

B. EVOLUTION OF PHARMACIES IN EL SALVADOR

In El Salvador, pharmacies were not always known as such. At the end of the 18th century,
they were known as Apothecaries, with a basic operating structure different from that
known today; That is, the owner was the Apothecary who was in charge of preparing
prescription medications for the public.

In pharmacies there were generally no clerks, nor the range of products or services that
pharmacies currently have. Another characteristic worth noting is that the apothecary knew
his clients quite well, since they came to him because there was only one apothecary in the
town.
At the beginning of the 19th century, the first pharmacies arose in El Salvador, in which
pharmacists and doctors were already involved in their work as owners of them. The need
to compete in the local market and not be left out has forced pharmacies to diversify, this
has evolved due to high competition and to satisfy customer demands, thus choosing to
cover a wide market segment, establishing a greater number of branches to be immediately
VI OVERSIGHT BOARD OF THE CHEMICAL PHARMACEUTICAL PROFESSION OF EL SALVADOR.
"Manual for the chemical-pharmaceutical profession of El Salvador." 2002 p. 59
 9

available to the customer, adopting as its own the trend developed in the United States for
this business.

1. Historical Background of pharmacies in El Salvador

The pharmacy is defined as a professional office with a social function, hence its operation
is regulated by the Surveillance Board of the chemical and pharmaceutical profession.

Pharmaceutical marketing in El Salvador dates back to very ancient times, in which a date
cannot be established that serves as a basis to determine the birth of indigenous
knowledge, whose effectiveness has been known since the arrival of the Spanish in 1492. .

Already in the year 1758, in the province of San Salvador there was a grocery store owned
by Don Bernabé de la Torre, a business characterized by the sale of medicine, foodstuffs
and liquors.

In the 19th century, the bachelor's degree in pharmacy began to operate. This scientific-
academic advance diminished the widespread use of indigenous pharmacy and
consequently its disappearance.

In the year 1841, the University of El Salvador was founded and on November 15, 1847,
Doctor Eugenio Aguilar established the faculty of medicine, where knowledge of natural
sciences was taught and doctors were then the most suitable for the medication
management.

In 1847, the chair of medicine was established and it was the doctor who was in charge of
managing medications, in addition to the politicians. In 1848, a section was held in which
the founding of a proto-medicine and a series of statutes were discussed, until then and for
the first time the word Apothecary, equivalent to that of Pharmacist, appeared in the
statutes.

The protomedicine had different powers: to extend titles to graduates and to punish them
with suspension from the exercise of their respective profession. It authorized the opening
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of pharmacies and could even close them; It punished medical graduates who sold
medicines, it had the power to instruct the first medical and pharmaceutical proceedings
and the crimes committed, referred to the competent Judge and another. That is to say, the
protomedical officer carried out the functions that today are the responsibility of the current
Supervisory Board of the Pharmaceutical profession.

In 1850, the Faculty of Pharmacy was included in the Natural Sciences and was therefore
linked to the Faculty of Medicine; In that same year, a Pharmacy was established in San
Salvador, owned by Mr. Ángel Guirola, where medicines were made and dispensed.

In 1868, the Chair of Pharmacy taught by Mr. Ambrosio Méndez was established at the
University of El Salvador, extending the degree of Bachelor of Pharmacy to those who
studied said study.

In 1889, the Faculty of Pharmacy presented the PHARMACY REGULATIONS, decreed by

the executive branch on October 26 of that year; This regulation became void on May 8,
1893 with the PHARMACY REGULATION, the latter involving pharmacists and doctors in
the ownership of pharmacy offices.
Approximately between 1910 and 1920, the first Cosmos pharmacies appeared in San
Salvador. On June 30, 1927, a new PHARMACY LAW was decreed. In 1930, the Santa
Lucia pharmacy emerged in Sonsonate, El Águila Pharmacy, Central Pharmacy, Fernández
Pharmacy and Escalante pharmacy. In San Miguel the pioneer pharmacies were: Gustave
Pharmacy, Chairlaix Pharmacy and Cruz Roja pharmacy; In Santa Ana, mention is made of
the Vides pharmacy. In 1940, the La Unión pharmacy emerged in the department of La
Unión.

In 1960, the Higher Council of Public Health began to keep a registry of establishments
authorized for the manufacture and distribution of medicines for human and veterinary use.

Currently, pharmacies have become a warehouse of medicines already prepared and

dosed, with specific indications by the pharmaceutical chemist, who has been confined to
the Laboratories in the preparation and research of new medicines that protect people's
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health. .VII

2. Legal aspects of the practice of pharmacy in El Salvador

According to the Pharmacy Law, in force in the country since 1927, some of the legal
aspects are the following:

2.1 Pharmacy Law

Reference is made to the most relevant articles in the operation of pharmacies in the
country; these are:
Article 1. Establishes the Institution called "Chemistry and Pharmacy Board", which will be
composed of a president, two members, a secretary and a trustee, as well as two members
and a substitute secretary; all academics from the respective Faculty of the National
University and Salvadorans by origin.

Article 9.- The following are the powers of the Governing Board: a. Form a list of all
members of the Faculty.
b. Keep a registration book for pharmaceutical specialties, the introduction and sale of
which have been authorized by the Governing Board, specifying the registration number,
name of the responsible preparer and date of authorization.
c. Monitor the good service of the Drugstore, Pharmacy, Chemical or Pharmaceutical
Laboratories and other establishments.
d. Establish the mandatory shift service in the pharmacies of the Republic, in the most
effective and convenient way.
and. Verify commercial invoices for drugs, medicines, chemical and pharmaceutical
products, pharmaceutical specialties and pharmacy accessories.
F. Extend the licenses for the opening of the establishments that are under your
supervision, as well as cancel them when the case requires it. g. Formulate the list of
mandatory medicines for pharmacies.
h. Prepare the table of poisonous medications, with their maximum doses, and publish

VII ARAÚZ NILA, ENRIQUETA. Historical data about the Faculty of Chemistry and Pharmacy in El Salvador.
University of El Salvador, 1955. p.9
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semiannual results, in accordance with the demands of science.

Yo. Authorize the publication of advertisements for pharmaceutical specialties that have
obtained a license to be sold in the country.
j. Form lists of patent specialties that have been licensed to be imported and sold in the
country.

Article 18.- None of the establishments referred to in article 5 of this Law may be opened
without the respective license requested by the interested party from the Faculty Governing
Board. Any pharmacist who wishes to establish a drugstore, pharmacy, chemical laboratory
or reopen any of those establishments that have been closed, will address the Governing
Board requesting authorization; The Board will decide after carrying out an inspection visit.

Article 20.- For the purposes of the previous article, any modification introduced in the firm
or company name, as well as the reopening of any establishment of that nature that has
remained closed for more than thirty days, whatever the reason.

Article 35.- Regent pharmacists are prohibited from being absent from the offices during
regular office hours, which will be at least eight, unless they are on duty, since in this case
they must remain during the established hours.

Pharmacists who own industrial laboratories where pharmaceutical specialty medications

are manufactured that are not sold to the public, but rather in drugstores and pharmacies,
are not obliged to remain in the establishment during the hours indicated in the previous
paragraph; they are solely responsible before the Law. , for the good progress and
operation of the establishment.

Article 48.- Pharmacies or first aid kits destined for barracks and hospitals will be directed
by qualified pharmacists; Your medications will be used exclusively for internal service, and
in no case may they be sold to the public.VIII

VIII MINISTRY OF PUBLIC HEALTH OF EL SALVADOR. Pharmacy Law of El Salvador, DO No. 220, Volume
317, November 30, 1992. [Online] Consulted on November 8, 2007. Available at: http://www.csj.gob.sv
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2.2 . Consumer protection law

Regarding the practice of pharmacies in the country, the Consumer Protection Law of El
Salvador establishes:
Article 3
Legal acts regulated by this Law are those in which the parties involved have the character
of supplier and consumer, and which apply to all types of goods and services. Article 10
It is prohibited to offer any type of product to the public after its expiration date or whose
mass, volume, quality or any other measurement specified in the products is altered.IX

3. Governing Authorities of Pharmacies in El Salvador

The Board of Chemistry and Pharmacy is responsible for the duties and powers of
surveillance over drugstores, pharmacies, clinical or pharmaceutical laboratories. The
Board of Chemistry and Pharmacy depends on the Superior Council of Public Health, this
being the order in which they will account for their actions each time it is required, and by
obligation each year.

The Board of Chemistry and Pharmacy will be composed of a president, two members, a
secretary, and a proprietary trustee, as well as two members and a substitute secretary, all
academics from the respective faculty of the National University, and Salvadorans by origin.
The members of the Board will serve for two years and will be appointed by the executive
branch in the health sector, and may be re-elected.

C. PHARMACY CHAINS IN THE METROPOLITAN AREA OF SAN

SALVADOR

Given the growing demand of the medicine sector in El Salvador, little by little the
pharmacies began to evolve from traditional establishments, towards the Pharmacies
known today as such, leaving aside the figure of yesteryear in which only a limited amount
of products were offered. products.

IX LEGISLATIVE ASSEMBLY OF THE REPUBLIC OF EL SALVADOR. Consumer Protection Law, Single

Chapter. [Online] Consulted on November 8, 2007. Available at:
http://www.asamblea.gob.sv/leyes/19960666.htm .
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For a pharmacy chain to be considered as such, according to the Higher Council of Public
Health, it must meet the requirement of having ten establishments located in a specific
geographic area; For this particular case, there must be ten or more branches located
within the Metropolitan Area of San Salvador.

1. Historical background of pharmacy chains in El Salvador

The strategy used by pharmacies in El Salvador is to implement a multiplicity of services

and diversify products, to displace the traditional format of small pharmacies.

Ice cream, toothpaste, cosmetics or disposable diapers seem to be the supermarket

shopping list, but it is not necessarily so; It could well be the details of what a person
bought, late at night, at a pharmacy.

Adopting the trend widely developed in the United States, where pharmacies have become
"Drugstores", which means that 90% of the sales floor space is occupied by convenience
products; The Salvadoran market has begun to be filled with pharmaceutical
establishments with a style that is far from traditional. For 10 years, although with more
marked growth in the last two years, pharmacies with a variety of products and services
have been proliferating in the country, going beyond medicines.

According to the Salvadoran Chamber of Consulting Companies (CAMSEC), the trend 10

Pharmacies found their medicine. The Economist. Editorial Altamirano Madríz, El Salvador, 17 E g n e e n r e
o r d a l 2 e 0 s 07 q . u p e u , bl e ic n ac p io r no m e n d s i u o a , l 20% of the stock of
pharmacies that are part of a chain is dominated by items ranging from cell phones to toys,
including a series of things that a few years ago were unthinkable to find in those
establishments. 10

In this sense, pharmacy chains consider that they are not competing with gas station
convenience stores, which focus more on foods that are going to be consumed
immediately, but are alternatives to supermarkets.

The new trend of pharmacy chains is "touch and go", that is, parking, being inside for 3
minutes and leaving, a style that is an alternative to what normally involves going to the
supermarket, even if you only want to buy two things, but that leads to perhaps parking in a
basement, going up steps, standing in line and paying
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Those in the pharmacy business recognize, however, that convenience products have a
slightly higher cost in their establishments than in supermarkets and that they will never be
able to compete on price with them, but they appeal to the fact that they are working to
reduce these differences since there are people who, in the rush to make a quick purchase,
do not think about paying an additional 5 or 10 cents.

In addition, some pharmacy chains extend their hours until midnight or provide 24-hour
service, longer hours than supermarkets.
2. Evolution of pharmacy chains in El Salvador
The strongest cards in the changes are held in their hands by the pharmacy chains, which
in the metropolitan area of San Salvador are seven according to data from the Association
of Pharmaceutical Products Distributors (DIPROFA).

These pharmacy chains are also implementing a series of free services. Exams such as
taking blood pressure, glucose and bone detoxification, free telephone consultations, as
well as health educational campaigns (talks about taking care of your health), supplements
in newspapers and educational radio programs; These are some of the added values that
they offer to customers. What's more, some have already considered opticians or a clinical
laboratory in the future.

Home delivery service has also developed a lot in this segment, in which San Nicolás, Las
Américas, La UNO and recently MEYKOS even have a "call center". On average, the
practice of delivering medicines to your home generates between 5% and 15% of pharmacy
sales volume.

Advertising campaigns and promotions are also quite important in the positioning of
companies. San Nicolás and Las Américas have developed characters, for example, while
a good part of the market issues newsletters with biweekly or monthly offers.

As part of the offer strategy, some have begun to develop alliances with credit card issuers
to offer promotions with this means of payment, a new trend in establishments where
discounts were previously given only to those who paid in cash.
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In the country there are more than 1,600 pharmacies according to the General Directorate
of Statistics and Censuses (DIGESTYC), although CAMSEC estimates that they are close
to 2,000. The reality is that those in the middle describe it as highly variable in terms of the
number of establishments, since every day one pharmacy opens and another closes
because there is a lot of competition, profitability margins are low and it is difficult to
maintain a business of this type.

CAMSEC estimates that around 680 pharmacies handle 80% of the market, and of them
there are 7 with more than 150 sales rooms that dominate the market. The purchase
volumes allow them to obtain better prices from suppliers and pass them on to customers,
in addition to turning them into a focus for better promotions and higher discounts,
compared to a small pharmacy that purchases a smaller volume of products from
laboratories.

Pharmacy chains can also offer better facilities to the consumer, invest more in safety and
develop better product handling conditions 10 Pharmacies found their medicine. The Economist.
Editorial Altamirano Madríz, El Salvador, 17 E g n a e r r a o n d ti e z 2 a 0 n 0 d 7 o . p s u u bli c c o ac
n io s n er m v e a n c s i u ó a l .

The owners and managers of them point out that a person can be sure that they work under
legal rules and that they will not sell expired, smuggled or pirated products.

These companies, for the most part, are also opting for "no change of prescription" policies,
that is, because the client is sold what the doctor indicated, moving away from the practice
of "vignettes", through which the The clerk tried to sell certain medicines because he had a
vignette with a certain amount, which was taken from the tills and which he could then
collect from the laboratory.

This translates into greater confidence for the customer, having the security that they will be
provided in the pharmacy chain with exactly what they are looking for. eleven
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3. Main Pharmacy Chains existing in the Metropolitan Area of San

Salvador

According to the Superior Council of Public Health in El Salvador (CSSP), for a pharmacy
to be considered a chain, it must have at least ten branches in a certain geographic area. In
this sense, currently the pharmacy chains located in the Metropolitan Area of San Salvador
that meet the requirement of having ten or more establishments in the area are the
following:

Table No. 1
Pharmacy chains located in the Metropolitan Area of San Salvador

NAME OF THE COMPANY TRADENAME No. OF No. OF

(COMPANY NAME) FROM THE PHARMACY BRANCHES IN BRANCHES IN
THE COUNTRY THE AREA
METROPOLITAN
EL COPO, SA de CV MEYKOS 33 27

PHARMACEUTICALS AFFORDABLE 32 20
EQUIVALENTES, SA DE CV PHARMACIES

FARMACIAS SAN NICOLÁS, SA ST NICOLAS 22 18

de CV

FARMIX, SA DE CV THE AMERICAS 19 17

PROMEFAR, SA DE CV SAN BENITO 18 16

SOCIEDAD FARMACIAS UNO, SA ONE 15 11

de CV

FARMACIAS CAMILA, SA DE CV CAMILA 19 18

TOTAL 7 OF PHARMACIES 158 127

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Source: Higher Council of Public Health of El Salvador (CSSP), August

20073.1. MEYKOS Pharmacies

The results of an aggressive expansion process are evident: 33 points of sale, and the transformation
I saw you jü a s&ntir into the pharmacy chain with the largest number of stores in
¿j/er» MEYKO S the country, even at the head of companies that have

much longer on the market.

Its expansion strategy included the purchase of what was the Fontana and Medco
pharmacy chain, as well as the alliance maneuver with the main supermarkets in the
country to place stores adjacent to them or in the same shopping centers.

The pharmacy revolution in El Salvador forced the pharmacy chain to merge with its similar
Guatemalan pharmacy chain, the largest pharmacy chain in Central America that has more
than 88 sales points throughout the region.

The merger of the Medco pharmacy chains with Meykos was completed in 2004, but each
company continued to work under the same operational structure; it was not until August
14, 2007 that the new operating scheme was officially announced.

This was due to the need to be more competitive, since it allowed us to improve customer
service by providing a different shopping experience. Not only adopting their name, but
also a new concept: Pharmacies and convenience stores.

For El Salvador, the highest concentration of stores is in the metropolitan area, with 27
stores, which are:

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hope

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Pink

Step North Ancient Cuscatlan San Luis Waterfalls

Ayutuxepeque La Hyper Europe San Holy button

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Miralvalle Summit Miguelito La Soyapango Center

The Gran Via

Soyapango Plaza Sultana Los
Ilopango
Santa Tecla The
The Terraces San Saints Holland
portal

Benedict Fountain Apopa Soyapango

Beethoven Masferrer Las

This Chain has more than 250 employees and for now, does not include a third country in
the region. The rapid growth is based on two types of formats, the Medco pharmacy,
dedicated exclusively to the sale of medications, and the super Medco, also dedicated to
offering convenience products.

This last format is one of the characteristics that most distinguishes them in the market,
since it offers a fairly large area (70% of a store of 150 to 300 square meters) and an
assortment of products such as cosmetics, drinks and personal hygiene items. , among
others.

The traditional biweekly offers as well as the prestige of offering only quality products
whose handling and purchase have been made under the rules that give security to
customers, in addition to having an innovative and efficient service.

Additionally, as part of the differentiation strategy from other pharmacies, Meykos

announced a discount program of up to 15% and a guarantee of assortment in pharmacies;
That is, if the client did not find the medication they were looking for at the time, it was sent
to their home at no cost.
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On the other hand, the "Meykoservicios" are operating, which include blood pressure,
glucose and cholesterol measurements, free nebulizations, and without a minimum
purchase requirement, a mini office will also be implemented where clients can undergo
medical checkups and then refer to a specialist if the case warrants it.X

3.2. Cheap Pharmacies

AC C ECONOM
CA
E
S
The trade in generic medicines arrived in the
country to put pressure on the Salvadoran

PHAR market.

MA
The first chain of stores specialized in the sale of this type of products, Farmacias Económicas, opened its
doors in February 2005. Generics are another niche in the medicine market, and although their marketing in
the country arose a long time ago, they have increased as a result of the introduction of pharmacies that are
dedicated to their marketing; This is the case of: Farmacias Económicas, which is the only pharmacy
specialized in the sale of generics.

There are other pharmacies with this line, but it is the last one they offer. They maintain a more stocked
range of products of this type, and the effort is valid, since Salvadorans are given one more option to make
their purchases.

However, Farmacias Económicas want to gain greater ground in the market, since a good part of
consumers already prefer them, since they have the same components of innovative medicines, which are
those that have the patent and brand.

X Interview conducted with Lic. Manuel Mazariego, from Farmacias Meykos Marketing. September 17, 2007
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The pharmacy chain, to date, handles more than 900 items of items in the display cases,
which means triple the supply that was available when they began operations; They have
especially increased the lines of vitamins, ophthalmic products and for hypertension.

The company believes that, despite the fact that many products have been released, a chain
of intermediation between laboratories and pharmacies still exists, making medicines more
expensive. Generally, generic drugs offer cheaper prices, due to direct negotiation with
manufacturers.

To date, the Economic Pharmacy Chain has 32 pharmacy branches, of which 20 are located
in the Metropolitan Area of San Salvador. They have coverage from San Miguel to Metapán.
La Unión, San Vicente, Morazán, Chalatenango and Cuscatlan are missing.

The Branches that are located in the metropolitan area of San Salvador are the
following:
Apopa Chiltiupan (Merliot)

Delgado City Waterfalls Galleries of The Step

Masferrer Constitution Metro center 1st stage

top Promenade Metrosur Metro center 6th stage

Plaza Step Masferrer 2 Metro center 7th stage

world Merliot Square Metro center 11th stage

Zacamil
savior of the world

Santa
Key
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Farmacias Económicas work with six large laboratories in El Salvador and Guatemala. They
look for those that comply with good manufacturing practices, and that already distribute their
products in the market, since the medications undergo content analysis and dissolution tests
in the body among the measures.

The Economic Pharmacies employ more than 150 people, including doctors, pharmaceutical
chemists and cashiers. Among future projections, they plan to open more branches that will
operate 24 hours a day and expand home delivery service.XI

3.3. San Nicolás Pharmacies

Grupo San Nicolás was established in December 1965, with the opening of the first
branch of Farmacias San Nicolás, in front of
the Hula Hula Park in the center of San
Salvador.

Currently the pharmacy chain

It has 23 branches throughout the country; Of these 18 are located in the Metropolitan Area of
San
Savior.

After 3 years of serving the public through the first pharmacy branches, its founder Dr. Víctor
Silhy established Laboratorios Suizos, a laboratory for the production of pharmaceutical and
cosmetic products.

Its first facilities were located at 29 Poniente Street No.1333 in the City of San Salvador; and
it was there where the first products in the portfolio were made: Gerolán, Tossil, Vermisilco
and Walter Scott's, which are now leaders in the market. Over time, new popular and ethical
pharmaceutical products were developed, which now total around 125 presentations.

In 1973, the manufacturing and distribution of Wella AG products from Germany for El
Salvador and Central America was granted, thus becoming the exclusive distributors,
concessionaires and representatives, both in the public sector that includes supermarkets,
warehouses and wholesale stores, as well as in the professional beauty salon sector. At the

XI Interview conducted with Lic. Américo Henríquez, General of Economic Pharmacies, September 11, 2007
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beginning of 1992 Laboratorios Suizos was moved to its new and modern facilities located at
Km. 10 Highway to Puerto de La Libertad, Antiguo Cuscatlan.

By 1993, due to the growing opening of markets in Central America and the increase in
competition, the Corporation's Management took on a new challenge: transforming the
organization into a leading company in the country and with regional coverage. Between 1993
and 2004, the Corporation opened 14 more pharmacies in the country, which allowed it to
become the leading pharmacy chain in El Salvador.

Fulfilling its vision of having a presence in the countries of the Central American region and
the Caribbean, in 1996 it joined the first subsidiary in Guatemala as part of the Corporation, in
1997 operations began in Honduras, in 1998 Distribuidora Suizos Nicaragua was born. and in
2004 the companies in Costa Rica and the Dominican Republic arrived almost
simultaneously.

In 2004, Senior Management, counting on two successful companies at the national level,
decided to unify Swiss Laboratories and San Nicolás Pharmacies as GRUPO SAN NICOLAS.

That same year GRUPO SAN NICOLAS was qualified as "The Best Employer in Central
America", according to the ranking "The Best Employers in Latin America" carried out by
América Economía magazine and the prestigious global consulting firm specialized in Human
Resources, Hewitt Associates.

Currently, Grupo San Nicolás is vertically integrated from the manufacturing of its own
products and international brands of medicines such as De Witts pills that it exports to Central
America and the Caribbean, and Wella cosmetics from Germany.
It distributes important brands of medicines such as Mepha from Switzerland, Rowa from
Ireland, among others. Since 2004, it has distributed the famous Hawaiian Tropic brand of
tanners and sunscreens in El Salvador, which is already a leader in the market.

The evolution of the pharmaceutical sector has forced them to reorient their marketing efforts
to remain current in the local market. The reinvention is oriented towards additional services,
among which the following stand out:

Preparing recipes Taking blood pressure

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Computerized Injections Home Service

Products for diabetics Orthopedic Products
Natural medicine
Talks about pediatrics, hygiene and oral health

But the changes don't end there; Part of it lies in the marketing of other complementary
products that a traditional pharmacy would not usually have, such as: Convenience products
(food, drinks, snacks), natural medicine, cosmetics, products for diabetics, prepaid cards for
cell phones, among others.

The branches located in the San Salvador metropolitan area are:

Medical Colony Step Step Walk

South highway 29 Poniente Street Constitution

Soyapango Center Soyapango Hula Hula

Lomas de San Francisco Zacamil Apopa

Morazan
Maple Wholesale Square
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Cathedr Holy button Merliot

al

The most visited branches within the Metropolitan Area are those in the Capital center
(Hula Hula, Arce, Plaza Morazán), with approximately 10,000 monthly customer visits; The
Soyapango branch follows closely behind.

It has 20,000 products, of which 95% are convenience

products.

3.4. Las Americas Pharmacies

Founded in 1967 by Dr. Franklin López, for these pharmacies the 90's marked growth in
them, since the policy of opening sales rooms coincided with the growing competition that
was generated in the Salvadoran market.

They have 18 branches, of which 15 are located in the Area.

Holy button Multiplace Unicentro

Metropolitan of San Salvador. These branches are:
Savior of the world Green Hills st. Helen
South Metro Sierra Nevada Center

Metropolis world square Medical Colony

Sinai High view Soyapango
Wholesale

Farmacias Las Américas also offers additional products to medications, such as cholesterol,
triglyceride, glucose, vision, arthritis, blood pressure testing, dental advice, facial clinics,
densitometry sessions.
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I mean; It has also been characterized by establishing alliances with Banks such as
Credomatic and HSBC, to offer discounts to its cardholders on the purchases they make.

3.5. San Benito Pharmacies

It has twelve branches in the Area

Metropolitan of San Salvador:

Santa Tecla center I Jdez. Santa Tecla center II Benito

La Mascota Calle Arce
Of Guadalupe I The rabid Jdez. From Guadalupe II
5 to Blv. From the Plaza
Medical Colony
Bird. South Col. San Soyapango racecourse

3.6. UNO Pharmacies

Focused on being number one in service to its

customers, Farmacias UNO has 15 branches and more
than 14,000 products in stock, having a clear formula to
generate a successful pharmacy chain.

The first thing is to provide excellent

customer service, which
It ranges from advising you to treating you well when you enter one of its
branches.
It also counts to have a good location and have good discounts for
purchases.
The expansion strategy has intensified, since its branches have doubled
since 2004.
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In total there are 15 concentrated only in the Area

branches
Medical Zone Savior:
Metropolitan of San
Santa Teresa
San Luis La

Walk Glory Constitution

Chiltiupan Multiplace
Machu Pichu (Merliot)
World Square
Baptist Medical Clinics
Masferrer Loma linda
Ancient Cuscatlan

3.7. Camila Pharmacies

PHARMACIES +
PHARMACY They have 22 Branches, of which 18 are located in the
CAMILA CAMILA found The pet
Y
Metropolitan Area of

The heroes
San Salvador.
Zacamil
These are the following: Plaza Old Medical Colony
Merliot
San Jacinto San Jacinto Cuscatlan Santa Elena
Montelena
Altavista South Highway Mexicans Progress -
Polh
Soyapango Santa Tecla Ávila The source

The vast majority of its branches have home delivery service, which is one of
the main advantages, in addition to the number they have and accessibility for
customers.
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4. Organizational structure of the Pharmacy Chains located in the

Metropolitan Area of San Salvador

Those of pharmacies located in the Metropolitan Area of San Salvador generally have the
same organizational structure scheme within each of the companies. The following
organizational chart illustrates their structure:
Organizational chart of the pharmacy chains located in the Metropolitan Area of San Salvador