Pharmacy Transformation Addresses Shortage of Family Doctors: SIC Empowerment System Officially Launched

On August 13, 2018, the “Strategic Cooperation Signing Ceremony for the Social Impact Capital (SIC) Empowerment System” was held at the 2018 XiPu Conference. VCBeat (WeChat ID: vcbeat) provided on-site coverage in real time.

At the signing ceremony, Zhongkang Information Co., Ltd. entered into strategic cooperation agreements with Xinyi International Digital Medical Systems (Dalian) Co., Ltd., Meinian Onehealth Healthcare Industry Group, SF Express Pharmaceutical Division, Guangdong Branch of PICC Health Insurance Company Limited, and Kayou Di Medical Laboratory (Beijing) Co., Ltd., to integrate industry links and jointly build a “SIC (Shared Intelligence & Capability) Empowerment System” for pharmaceutical retail, thereby establishing a consumer-experience-centric closed-loop health service ecosystem within pharmacy settings.

“The Equity Empowerment System (SIC),” with Sinohealth Information as its core developer, was refined over several years based on the original Smart Pharmacy System and made its official industry debut.

Liu Hui, Vice President of Sinohealth Information, stated that the “Equity Empowerment System (SIC)” has two major characteristics:

I. Its underlying industrial logic is based on shared survival within the new ecosystem of the health industry;

II. Its ultimate goal is to help pharmacies transform from drug sales outlets into health service hubs, partially assuming the roles of family doctors or health consultants, thereby creating a new type of professional pharmacy adapted to the emerging ecosystem.

Therefore, this system is fundamentally different from other smart pharmacy products on the market.

“The Equal Rights Empowerment System (SIC)” refers to a smart new retail system for pharmacies that provides pharmaceutical retail enterprises with support without affecting their market sovereignty, helping themTransitioning from Pharmaceutical Retail Terminals to Health Service Terminals。

As is well known, the implementation of the “Healthy China 2030” Planning Outline is accelerating. In particular, the family doctor contract model is gaining increasing attention as a means to provide the public with more cost-effective and accessible health management and medical services. Despite high public expectations, the actual delivery of family doctor services remains less than ideal due to the shortage of general practitioners.

In contrast, there were 472,000 retail pharmacies across China (as of the end of November 2017), with each pharmacy serving an average population of approximately 3,000. Due to historical reasons, pharmacies have been unable to provide specialized and systematic health services beyond simply dispensing medications, failing to leverage their inherent advantages of extensive reach and close proximity to the public.

With the rise of the “bio-psycho-social medical model,” multi-role collaboration, emphasis on prevention, and lifestyle interventions have become global trends. In developed countries, extensive explorations are already underway, with retail pharmacies collaborating with medical institutions, community organizations, and professionals in fields such as psychology and exercise science to provide comprehensive services to community residents, particularly those with chronic diseases.

In China, this endeavor is still in its nascent stages, and the “SIC (Social Impact Capital) Empowerment System” will undoubtedly play a positive role in advancing it.

As evidenced by the institutions signing the agreement, the empowerment ecosystem integrates services ranging from pharmaceutical supply and medical examinations to clinical care and health insurance, with the aim of providing pharmacy customers with a one-stop comprehensive health service solution.

In this process, pharmacies will also enhance their comprehensive management and operational capabilities for big data, which is one of the core competencies for future competition in the pharmacy sector.

In the “SIC (Equal Rights Empowerment System),” “equal rights” refers to “equal market power,” as opposed to “unequal market power.”

The proposal of this concept primarily addresses two phenomena.

Phenomenon 1: Physical pharmacies, particularly large and medium-sized chain pharmacies, often maintain a high degree of wariness in their collaborations with internet companies represented by BATJ. This stems from direct competition in sales; since internet companies control online entry points and traffic, physical pharmacies fear that comprehensive cooperation would lead to their customer base being “poached” by these tech giants. Such concerns are not unfounded, as debates have persisted in recent years over the notion that control over traffic allocation determines the fate of various online stores.

Phenomenon 2: Small and medium-sized pharmacy chains and independent stores are unable to independently achieve self-empowerment in the new retail of pharmaceuticals. To realize this necessary transformation, they often have no choice but to relinquish controlling equity. For business owners who wish to develop independently, this is a painful decision.

“The SIC (Sinohealth Information Consortium) Empowerment System” specifically addresses the aforementioned two concerns, as its core initiator, Sinohealth Information, is not involved in the sale of any physical products, and none of its services are provided directly to customers; instead, they are delivered through member units within the empowerment system.

The choice of service provider is determined solely by the customer or their beneficiary representative (insurance), and has no relation to Sinohealth Information. The core offerings of Sinohealth Information are, first, facilitating connectivity among various service entities, and second, big data management and analysis.

As a new ecosystem of the health industry characterized by networked, multi-dimensional, and interactive dynamics takes shape, shared survival will become an inevitable choice for the survival and development of all brick-and-mortar pharmacies. While large and medium-sized chains can sustain themselves through self-built small closed loops, their growth will be constrained by their failure to integrate into the broader industrial closed loop. Small and medium-sized chains and independent stores that do not embrace shared survival risk losing even their right to exist.

In summary, shared survival will place pharmacies of all sizes on the same competitive platform, with cost-control and efficiency-enhancing service capabilities becoming the core of competition.