This article examines the factors influencing category management (CM) effectiveness within the retail pharmacy industry in Latvia. The primary factors are regulatory, impacting key elements of CM, such as assortment, pricing, promotional campaigns, and product placement on pharmacy shelves. To achieve the objectives of this article, the authors have conducted a comprehensive review of existing literature, along with Nielsen shopper study 2025. This approach was taken to explore the primary factors and assess the significance of factors that impact CM decisions and shoppers behavior and influence sales and profitability within pharmacies in today’s competitive environment. The authors seek answers: 1.What are main factors influencing CM in pharmacy retail trade and customer behavior towards CM? 2. What strategies can category managers employ to increase sales and profitability within the competitive environment and regulatory framework of pharmacy industry in Latvia? This article reviews literature on the four pillars of CM. incorporating findings based on Nielsen shopper study. The final part presents the findings and recommendations identifying opportunities of CM.