New Pharmacy Rules Promise Order But Threaten Survival of Small Businesses

May 17 , 2025. By NAHOM AYELE ( FORTUNE STAFF WRITER )

In a sweeping move that has triggered applause from regulators and alarm among small operators, the federal government has rolled out new national pharmacy standards, ushering in stricter operational guidelines that redefine everything from infrastructure to location criteria.

Issued by the Institute of Ethiopian Standards (IES), the latest rules stipulate detailed requirements covering everything from the minimum floor space and equipment pharmacies can have to staff qualifications and precise distancing measures from other health-related establishments.

The new guidelines, enforced by the Ethiopian Food & Drug Authority (EFDA), require pharmacies to have designated areas for dispensing, counselling, compounding, and storage. They should also maintain a dedicated drug information centre of 12Sqm. The total operational space should now be at least 50Sqm, a considerable increase that surpasses what many smaller pharmacies currently manage.

Pharmacies should be located 100 metres away from hospitals, clinics, health centres, and other pharmacies, except those operating within health facilities. They should maintain the same distance from potential contamination sources, including public toilets with leakage problems, garages, chemical plants, grinding mills, gas depots, waste disposal sites, and industrial sites that produce dust, smoke, or excessive heat.

According to Wendu Ketele, the Authority's executive director for branch coordination, these measures were prompted by concerns from the World Health Organisation (WHO), which had noted the absence of a uniform national pharmacy standard during a review of Ethiopia’s regulatory systems.

"This was a long-overdue measure to harmonise pharmacy services across the country," Wendu told Fortune. "Uniform standards help protect patients, guide professionals, and improve access to medicines."

However, the implementation has caused anxiety among small pharmacy operators who say these standards do not reflect their realities.

For many, finding a suitable location that complies with these requirements is nearly impossible, and when one is available, the costs are often prohibitively high. Pharmacy owners, crucial parts of the healthcare system, express concerns that many may struggle to remain open under the new regulations.

Dagmawi Wondwosen operates a small pharmacy near the Meskel Flower neighbourhood and views the new regulations as a direct threat to his business. With monthly rents in central areas already reaching 60,000 Br, meeting the new space requirements presents an enormous financial burden.

"It's pushing us out of the market," Dagmawi said. "The standards may look good on paper. They don't reflect economic reality."

Mehari Goytom, who has operated a pharmacy in the Jemo area for nine years, criticises the 100-meter distance rule as particularly troubling.

"Our customers are patients, people coming out of clinics and hospitals," he told Fortune. "It makes no sense to push pharmacies away from the very places where they're needed most."

Existing pharmacies have been given a two-year grace period to adapt to the changes, providing some temporary relief from immediate disruption.

Wendu insists the standard is both essential and thoughtfully developed. He pointed to studies on average pharmacy sizes and layouts, arguing that the new rules reflect these conditions.

The financial implications of the new requirements extend beyond rental costs. Pharmacies are now obligated to provide changing rooms, administrative offices, toilets with running water, and patient waiting areas. These demands raise the entry costs for new pharmacies and the ongoing operational expenses.

Despite these, some pharmacy owners recognise potential benefits.

Emawaysh Tefera, who has 14 years of experience and owns Tsedey Pharmacy in Jemo 1 neighbourhood, sees the regulation protecting her business from market oversaturation.

"There's no pharmacy near me right now," she said. "If someone wants to open one, the 100-meter rule protects my business."

However, Emawaysh remains concerned that regulators might have underestimated the economic pressures imposed by the new standards.

Approximately 618 pharmacies are operating nationwide, with a 12.3pc increase from 2023. More than half of these are located in Addis Abeba, which saw an 11.88pc increase during the same period. The pharmaceutical sector is witnessing steady growth, with projected revenue reaching 476.89 million dollars in 2025 in the pharmacy market.

Experts remain divided over the regulation’s potential impact. Sisay Endale, a lecturer at Addis Abeba University who also trains pharmacists on compliance with EFDA rules, believes the rules are a crucial initial step in raising industry standards.

"This is a starting point," he said, encouraging pharmacy professionals to focus beyond immediate commercial impacts. "If challenges emerge, the policy can evolve."

Dula Desalegn, a 15-year pharmacy lecturer at Jimma University, takes a more critical view. While supportive of national standards, he advocates for gradual implementation.

"The rollout should be gradual," he urged. "If someone in the emergency room can't get needed medicine, they shouldn't walk 100 meters to find a pharmacy."

Nonetheless, EFDA remains firm in its position. Wendu argues the rules prevent unhealthy clustering and ensure fairer access to pharmacy services.

"Pharmacies are part of the healthcare system, but they're also businesses," he told Fortune. "Overconcentration distorts competition and accessibility."

The regulations are already in effect for new pharmacy licenses, while notification efforts are underway for existing operators to comply within the two-year grace period. The Authority’s officials believe these measures will improve service delivery and enable consistent nationwide oversight once fully implemented.

PUBLISHED ON May 17,2025 [ VOL 26 , NO 1307]

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