Setting the Right Price at the Pharmacy:
The Method for the Incumbent

Ludovic Shum

Sales Director

September 14, 2026

As of September 1, 2025, the cap on discounts for generic drugs has been reduced from 40% to 30%, with further reductions scheduled for 2026 and 2027. For many pharmacies, this represents a significant portion of their profits being squeezed—in an area where the pharmacy owner has no control over pricing.

This guide builds on this observation to answer a practical question: How, in concrete terms, does a market leader set the right price in the only segment where it truly retains decision-making authority—parapharmacy and OTC products? A 5-step method, with verified numerical benchmarks.

Table of Contents

H2 Headings

A stylized balance between a regulated pharmacy cross and a non-prescription drug bottle sold at market price

What Has Really Changed for Pharmacies Since 2025

The decree of August 4, 2025, established a three-stage schedule for generic drug rebates: 30% for generics and 15% for biosimilars effective September 1, 2025, down from 40% previously; 25% and 17.5% as of July 1, 2026; then a uniform cap of 20% as of July 1, 2027, which will be permanently set as of January 2028. For many pharmacies, these discounts accounted for a significant portion of their annual profit.

40→20%

Projected trajectory of the generic drug reimbursement cap between 2025 and 2027. Several industry analyses suggest a net loss of approximately 8 to 10 percentage points, which will be difficult to offset with biosimilars, which are still not widely used in community pharmacies (decree of August 4, 2025, reported by Le Moniteur des Pharmacies).

This pressure comes on top of a structural trend already documented by the Court of Auditors: As of January 1, 2024, France had 20,502 pharmacies, employing approximately 91,900 people, with the rate of closures accelerating from an average of 156 closures per year since 2007 to 211 per year since 2015.

211

pharmacy closures on average each year since 2015, compared with 156 per year since 2007, out of a network of 20,502 pharmacies as of January 1, 2024 (Court of Auditors, RALFSS 2025, chapter “Retail Pharmacies: A Model in Transition”).

According to the Federation of French Pharmaceutical Unions (FSPF), the average gross margin for a pharmacy will range between 28% and 33% of revenue in 2025, with a net margin ranging from 5% to 10% (up to 12% for the highest-performing pharmacies, and below 3% for the most vulnerable ones). In a market where price is regulated rather than a commercial lever, the owner’s room to maneuver is automatically reduced.

The scope within which the holder retains control

We have detailed elsewhere the complete mechanism for setting the price of reimbursable medications and the role of the Economic Committee for Health Products (CEPS): Pricing in Pharmacies: Between Regulation, Pharmacy Margins, and Competition from Drugstores. For the rest of this guide, the key point is simpler: for reimbursable products, the price is a given, not a decision. For parapharmacy and OTC products (cosmetics, hygiene products, dietary supplements, and non-reimbursed medical devices), prices are set freely, just as they are in a traditional specialty store.

This segment varies in size depending on the pharmacy’s format. On average, it accounts for about 10% of revenue across the network, but between 20% and 30%—and sometimes as much as 50%—in large-format pharmacies that have made over-the-counter (OTC) products a strategic focus. The average purchase amount is also structurally different: approximately €17 for OTC products compared to €59 for a prescription, according to GERS 2025 data.

10→50%

The share of over-the-counter products in a pharmacy’s revenue: approximately 10% on average across the network, but 20 to 30%, and sometimes as high as 50%, in large-format pharmacies (Le Moniteur des Pharmacies, citing Xerfi, November 2025).

Regardless of its share of the mix, this segment remains the only one where a genuine pricing strategy makes business sense for a pharmacy.

The 5-Step Method for Setting the Right Price

It takes just five steps to develop a pricing policy for over-the-counter products, without spending a disproportionate amount of time on it relative to this segment’s actual weight in the catalog.

Divide your open catalog into 2 to 3 categories

Distinguish between the items that customers actually compare (loss leaders) and the recommended items—which are compared less frequently—that may yield a more favorable margin.

Mapping Actual Local Competition

Other pharmacies in the local area, health and beauty stores, and drugstores, as well as specialized e-commerce sites, for comparable products, making sure that the format (quantity, packaging) is exactly the same.

Set pricing rules by segment, not a single multiplier

A competitive introductory price versus a full margin on the recommended product: two pricing strategies that cannot be managed using the same approach.

Document every gap compared to the closest competitor

So that you can explain it in a single sentence if a client or team asks about it, rather than finding out after the fact.

Separate OTC margin from refundable margin in your dashboard

And adjust the pricing policy for over-the-counter products at least once a quarter, not just at the time of the annual financial statement.

At Booper

Keep up with the local competition without spending your evenings doing so

GENIUS Link, the competitive monitoring and matching module of the Booper modular platform, allows you to continuously track the prices of key SKUs in a target market and automatically verify that the products being compared are identical, before applying a differentiated pricing rule with GENIUS Price.

The Booper price analysis makes it possible to identify, early on, the few dozen items that actually serve as loss leaders in a given pharmacy, rather than treating the entire shelf with the same level of effort.

Managing Seasonal Fluctuations Without Compromising Your Price Image

The drugstore industry operates on a cycle of predictable peaks: allergies in the spring, sunscreen in the summer, colds and immunity in the winter—not to mention the promotional campaigns driven by pharmaceutical companies, which can boost sales by 20% or more for promoted products, according to industry data. The most common approach is to react to these peaks on a day-to-day basis, adjusting prices or promotions based on remaining inventory. This is the opposite of strategic management: the price trajectory should be set before the peak, not during it.

In practical terms, this means deciding three things in advance: which items will serve as loss leaders during the period (the most sought-after and most frequently compared), what the margin level will be for the rest of the seasonal assortment, and when to ease up on promotional pressure at the end of the period. A targeted and well-planned promotion, focused on a limited number of products, better preserves the price image than a broad discount applied to an entire aisle to clear out inventory.

Pricing (and update) errors that cost the account holder the most

Apply a single markup rate to the entire health and beauty section, without distinguishing between compared items (introductory prices) and recommended items (full markup).
Matching a price to a competitor’s without checking the unit of measurement: an incorrectly compared price per liter or per tablet skews the entire competitive analysis.
Combining supplier discounts and customer promotions without monitoring the net effect on the margin actually realized.
Launching a seasonal promotion without setting an exit point in advance: the promotion then continues by default, since no decision was made beforehand.
Reviewing your local competitive intelligence only once a quarter, even though prices in a given market are constantly changing.

Checklist Before Setting Your Next Price

5 Things to Consider Before Setting a Price for Over-the-Counter Products

Does my catalog clearly distinguish between comparison items (loss leaders) and recommended items (full-margin items)?
Is my local competitive intelligence up to date for the past few weeks, rather than just the last quarter?
Is every price difference greater than 15–20% compared to the closest competitor documented and justifiable?
Does my next seasonal trade have a predetermined exit level before it begins?
Does my dashboard distinguish between the OTC/over-the-counter margin and the margin on reimbursable products?

The pharmacy owner who regains control over pricing does not do so across the entire product line, but only within the scope where it is actually a decision to be made. In a context where generic drug discounts are being reduced each year through 2027, it is also this scope that bears an increasing share of the responsibility for maintaining the pharmacy’s profit margin.

Does your drugstore pricing follow a specific method, or are you basing your prices on those of the competitor across the street?

30 minutes to objectively assess the margin potential within your truly actionable scope.

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Frequently Asked Questions

How can a pharmacy owner set the right price for their pharmacy products?

By first segmenting its open catalog into “comparison items”—to be treated as loss leaders—and “recommended items”—which command full margins—and then documenting each price difference relative to the closest local competitor, rather than applying a uniform margin multiplier to the entire department.

Should a pharmacy align its prices with those of the neighborhood drugstore or supermarket?

Not automatically, and never without verifying that the products being compared are identical in quantity and packaging. Pricing alignment makes sense for the few items that customers actually compare; for the rest of the product line, a differentiated markup remains justifiable.

How does the reduction in generic drug rebates since 2025 change the landscape for the brand-name manufacturer?

It reduces revenue that, for many pharmacies, accounted for a significant portion of their profits—in a market where pricing remains beyond their control. This automatically shifts the pressure to the only segment where pricing decisions have a direct impact: health and beauty products and over-the-counter (OTC) medications.

Should the same markups be applied to all drugstore products?

No. The products that customers most frequently search for and compare serve as a benchmark for the pharmacy’s perceived pricing; the rest of the product line, which is compared less often, can carry a higher margin without damaging that perception.

How can you manage prices during peak seasons without compromising your price image?

By setting—before the peak—the reference prices that will serve as starting prices, the margin level for the rest of the product line, and the point at which promotional pressure eases, rather than reacting to remaining inventory once the peak has begun.

What tool can I use to track local competition in the drugstore sector without spending hours on it every week?

An automated competitive price monitoring tool allows you to continuously track key products in a specific market area, whereas a manual quarterly survey allows pricing policy to drift between checks.

Also in this series

Sources

Le Moniteur des Pharmacies, schedule for the August 4, 2025, order on generic drug discounts: lemoniteurdespharmacies.fr
Senate, Written Question No. 06021 (September 4, 2025), citing the report of the Court of Auditors: senat.fr
Court of Auditors, RALFSS 2025, chapter “Retail Pharmacies: A Model in Transition” (May 2025): ccomptes.fr
FSPF (Federation of French Pharmaceutical Unions), data on gross and net margins for pharmacies, 2025: fspf.fr
Le Moniteur des Pharmacies, "The Share of Over-the-Counter Products in Pharmacy Sales," citing Xerfi, November 2025: lemoniteurdespharmacies.fr
GERS, Average Pharmacy Basket by Sales Type (Prescription vs. OTC), 2025 Data

Setting the Right Price at the Pharmacy: The Method for the Incumbent