Guatemalan Social Enterprise Improves Rural Healthcare Access While Helping Small Pharmacy Businesses Thrive
Guatemala faces many health challenges. More than half the population lives below the poverty line, and poverty is particularly concentrated in rural areas. Because the healthcare system is primarily privatized, individuals must pay for medical services through private expenditures and out-of-pocket spending. Not only does this make healthcare expensive, it concentrates facilities and services in urban areas.[1] As a result, many people — especially in rural regions — lack access to basic healthcare services.
Farmacías Chapinas aims to make healthcare and medication accessible to everyone, while also enabling more people to earn a living by owning and operating pharmacy businesses. Teresa Marroquin and her family started Farmacías Chapinas in 2013. Using a franchise-based system, Farmacías Chapinas trains individuals to open and operate pharmacies throughout Guatemala, many of which are located in remote areas.
After paying a small start-up fee, pharmacists are trained by Farmacías Chapinas in everything from pharmacology to accounting. Farmacías Chapinas purchases inexpensive, generic medication in bulk, then sells it at cost to pharmacists. Pharmacists can then resell the medication to their communities at a low price while still making a profit. In addition to becoming community health ambassadors, pharmacists gain valuable business management skills and increase their own incomes.
Uniting Good Medicine with Good Business
Teresa and her family did not originally envision their business as a social enterprise, but they recognized the positive impact of Farmacías Chapinas in local communities: Pharmacists were opening and running successful businesses, and people in rural areas were now able to purchase inexpensive medicine. At that point, Teresa decided to focus her efforts on helping Farmacías become a more effective social enterprise.
In February 2014, Farmacías Chapinas was accepted into the World Vision social entrepreneurship training program. This program helped Teresa start thinking about Farmacías Chapinas as a social enterprise and gave her a framework to consider social impact in a more rigorous way. World Vision provided courses to help Teresa and her team with their financial and legal structure and provided funding for Teresa to start re-registering Farmacías Chapinas as a non-profit organization.
In September 2015, a World Vision peer recommended that Teresa look into Alterna, a center for innovation geared toward social and environmental entrepreneurship that is based in Quetzaltenango (Xela), Guatemala.
Alterna helped Teresa market Farmacías Chapinas and gain valuable exposure in the competitive pharmaceuticals market. By this time, Farmacías Chapinas had established 62 pharmacy franchises, half of them located in rural areas. Medication sales were enabling Farmacías Chapinas to break even, but the social enterprise was not generating enough profit to expand.
Scaling the Impact of Farmacías Chapinas
In November 2015, Teresa participated in InnovaXion, a 3-day workshop customized by Alterna from Global Social Benefit Institute (GSBI) material developed at Miller Center for Social Entrepreneurship and made possible through the support of eBay Foundation.
Teresa used the GSBI InnovaXion Boost program’s financial modeling module to assess the value of Farmacías Chapinas, determine how much money was already invested, and create a long-term financial plan and budget that would allow Farmacías Chapinas to grow.
With this information, Teresa recognized the weak points in her business plan and formulated strategies to address them. Most significantly, she realized that Farmacías Chapinas was losing money through franchised pharmacies that purchased medicine from other suppliers. To address this issue, Teresa established an employee loyalty contract that prospective pharmacy owners had to agree to before receiving training and support.
The GSBI InnovaXion Boost program culminated in a pitch competition among all the participating enterprises. Teresa was one of two winners and received a $1,000 prize, which was presented at a high-profile social innovation event in Guatemala City.
Since the GSBI InnovaXion Boost program, Farmacías Chapinas has made significant progress towards the scaling milestones Teresa established. Farmacías Chapinas has opened five more franchises, and the team’s employee contract has increased employee loyalty and strengthened relationships with pharmacists.
Teresa is using the prize money from the InnovaXion competition to expand the enterprise, and she plans to open another 20 Farmacías Chapinas pharmacies in remote areas over the next year.
Farmacías Chapinas began partnering with a local church that conducts outreach healthcare camps in rural areas. Farmacías Chapinas sends volunteers and donates medication to these camps and is working to establish permanent clinics in these areas. By 2017, Teresa aims to have Farmacías Chapinas established as a non-profit organization and to add two permanent, self-sustaining medical clinics in rural communities.
[1] Country Cooperation Strategy at a Glance. World Health
Organization, 2014.
