Editor's Note: Well-known pharmacy researcher, Con Berbatis, has been quietly investigating community pharmacy, both locally and globally and has produced some timely statistics supporting trends that he has identified.
More than ever, pharmacy leaders need hard information on which to base strategic decisions, as organisations such as Woolworths circle pharmacy waiting to attack at an opportune moment.
Put aside your assumptions and impressions and judge for yourself, using hard evidence, whether Australian pharmacy social values stands up against pharmacy models in other countries, already engaged in open ownership.
Look at world trends and see what model we want to evolve into.
This article is the first of a series, all of which are published this month because of the urgency created by market events.
It is required reading for all community pharmacists and decision makers.

The emergence and growth since 1980 of pharmacies in large non-pharmacist controlled premises such as supermarkets and mass-merchandiser stores in certain developed countries such as the USA and UK have changed the nature of community pharmacy in those countries.
Woolworths, Australia's largest supermarket group, plans to incorporate pharmacies in up to 100 locations .
Coles, Woolworths' rival, would probably follow the trend in view of similar experiences with other goods. The purpose of this report is to study data on supermarket pharmacies in the USA and UK sources for its relevance to the emergence of supermarket pharmacies in Australia.

1.0 Background
The published data on the structure and pharmacy practice or health-related activities conducted in supermarket pharmacies originate mainly from the USA and UK.
The objectives of this report are to
(a) summarise recent statistics and developments related to supermarket and other non-pharmacist-controlled pharmacies in the USA and UK ,
(b) outline the current status of Woolworths and Coles in Australia's retail grocery sales and
(c) identify the key issues for pharmacy in resisting the incursion of supermarket pharmacies in Australia.

2.0 Supermarket pharmacies in the USA and the UK
Most of the data on supermarket pharmacies in the USA , UK and developments in Australia were drawn from reports published in the US pharmacy literature or internet, by national bodies of pharmacy in North America and the UK and with editors in the USA, UK and Australia.
The results of Curtin University's 2002 National Pharmacy Database Project was the main source of national data on Australia's community pharmacies.

2.1 Statistics on US supermarket pharmacies
In the USA from 1995 to 2001 supermarket pharmacies grew faster in numbers and proportion than any other type of community pharmacy (Table 1). In the seven years the supermarket and mass-merchandiser pharmacies increased more than chain drugstores and independent pharmacies in number and share of pharmacy outlets (Table 1). Supermarket and mass merchandiser pharmacy numbers have increased to less than one per 20,000 people in the USA.

Table 1. Changes in numbers and proportions by category of US pharmacies from 1995 to 2001
(sources : Levy, 2000; NCPA-Pharmacia Digest,2002).

From 1997 to 2002 supermarket pharmacies in the USA showed growth across most features (Table 2). Surveys conducted in 1998 and 1999 respectively of 76 companies operating 5,245 supermarket pharmacies and 63 companies operating 4,167 supermarket pharmacies found a modest 8% increase in median daily prescription numbers dispensed between 1997 and 1999 (Table 2) but a 66% increase in total prescription numbers from 1993 to 1998 (Levy 1999; Blank,1999).

In 1998 more than 40% of supermarket chains reported disease state management, most notably diabetes and asthma, although reimbursement by manufacturers was rare.
Over 60% reported in-store influenza vaccination or/and blood pressure testing and 95% offered complementary medicines (Blank,1999).
In April 2000 an IRI survey which scanned OTC and HBC POS sales data for 55 OTC/HBC categories submitted by 11,764 supermarkets, 8040 drugstore and 300 mass merchant pharmacies found supermarkets ranked first in internal analgesics, third in vitamin sales with 24.2% of the total $3.4 billion and third across a range of OTC medicine categories (Levy,2000).

Table 2. Features of pharmacies in US supermarkets in 1999.
(source : Blank,1999; Levy,1999 , 2000 and 2003)

(1) = 11% pa increase in supermarket pharmacies , compared to 8% pa in drug store and 5.8% in mass merchandiser pharmacies.

2.2 Surveys of US supermarket pharmacies
A survey of salaries paid for pharmacists beginning or continuing found supermarket pharmacies compared well with salaries paid by traditional pharmacy chains and mass merchandisers (eg Walmart) and were far higher than those in independent pharmacies .
Overtime pay was less in supermarket pharmacies.
Reimbursement for CE and meetings was lower but job satisfaction was higher in supermarket pharmacies (Ukens,1999).
The results were based on a mail survey conducted in October 1998 with a 26% response weighted according to the locations of 6400 pharmacist participants.
A later survey found similar results (Levy,1999).
Supermarket pharmacists reported being active in counselling, screening for hypertension, cholesterol and diabetes, administering immunisations, recommending OTCs and lecturing in the community (Levy,1999).
Electronic prescribing was accepted as early as 2002 in supermarket pharmacies (Ukens,2002). Community pharmacy residency and other cooperative programs with university schools of pharmacy are growing (Levy,2003).
Supermarket and other large pharmacy groups ranked highly for providing written information with prescription medicines according to 1,129 respondents in a nationwide telephone survey in 1997 (Levy,1997).
The reports are not peer reviewed and most of the services are provided routinely by independent pharmacies in the USA and in Australia .
The surveys were of variable validity , the results were not demonstrably higher than for independent pharmacies so making it difficult to draw firm conclusions in favour of supermarket pharmacies over other types of pharmacies.

2.3 Statistics on UK supermarket pharmacies
Supermarket and discount store pharmacies in Great Britain total just 4.1% compared to the USA (Table 3) but their sales are disproportionately higher.
Northern Ireland in 2003 had a total 510 pharmacies of which 56 (11%) were in non-pharmacist controlled chains and just one supermarket-pharmacy a Sainsbury's ( personal communication, N Morrow, October 2003).
Supermarket and mass merchandiser pharmacy numbers in the UK appear to have increased to less than one per 100,000 people or one-fifth the prevalence in the USA implying supermarket companies will lobby strongly hard to expand in the UK .
In Northern Ireland there is just one supermarket pharmacy for approximately 1.5 million people in a country with one pharmacy to just over 3100 people which suggest peculiar and strong local factors are affecting the types and numbers of pharmacies serving y the population.

Table 3. Great Britain's pharmacies by pharmacist-control in 2000.
(Murray-West, 2003).

2.4 Prescription drugs and OTCs : poor access , misuse and safety processes in 2003.
The latest developments in the access, price and process aspects of the delivery and consumption of prescription and OTC medicines consistently demonstrate no significant advantages and possible disadvantages of supermarket and mass merchandiser pharmacies.

2.4.1 Prescription drugs : national issues in the USA and Canada in 2003.
The high price of and poor access to prescription medicines in the USA is a major defect for population health there which is causing many adverse consequences .
A detailed comparison of international drug prices found the US prices were up to 160% higher than Australia's and in Canada, the UK and Sweden some 50% higher (Productivity Commission, 2001). Neither the presence of supermarket or mass merchandiser pharmacies or the large non-pharmacist-controlled chains of pharmacies has lessened the problem (Adams et al, 2001).
The deficient prescription coverage of the aged, the disabled, the indigent, indigenous and of certain ethnic minorities are well documented (Adams et al, 2001).
The adverse consequences of a national prescribing system without co-payments, or caps on costs or the numbers of drugs used , such as Australia's Pharmaceutical Benefits Scheme (PBS), are evident throughout the USA (Berbatis 2003 a).
For example, Medicaid and other medication insurance schemes operated by many states in the USA have blown health budgets and a number of states have combined to replace their own schemes with one overall resembling Australia's PBS (Berbatis 2003 a).
Also, many state governments and drug companies publicise in websites the variety of prescription medicine programs which offer lower priced drugs and of course internet pharmacy websites proliferate with discount drugs and generics (Berbatis 2003 a) to inform consumers.
There is little evidence to demonstrate non-pharmacist controlled pharmacies have improved the situation for consumers.

Probably the most serious adverse effect of highly priced prescription medicines for US pharmacists is the escalating trend in US residents purchasing less costly cross-border drugs.
That is , the common practice of people in Texas, California and Florida to drive to Mexico for cheaper prescription drugs in Mexico ( Washington Post 21 October 2003, http://media.washingtonpost.com/wp-srv/health/drugsday2.gif ) , or residents in the northern US states who ordered in 2002 an estimated $US700 million prescription drugs from Canadian e-pharmacies ( Figure 1).

This practice was condemned in May 2003 by the national US and Canadian pharmacy bodies for the increased risks it poses to consumers (Berbatis 2003 b).
Non-pharmacist controlled pharmacies have been inconspicuous in alleviating this situation.

Figure 1. The $700 million cross-border
purchase of prescription drugs from
Canada 1999-2003.

Discounted prices for dispensing prescription drugs are advertised publicly through the internet, media and within pharmacies throughout the USA but published well-controlled and reputable comparisons of prices of prescription drugs between different types of US pharmacies are rare.

An investigation conducted in 2001 by the Oklahoma Board Pharmacy found small differences between four independent and four chain store pharmacies but a much higher price charged by the internet pharmacy was published in 2003 (Figure 2).

The abnormally skewed dispensing towards controlled (or S8 ) drugs together with other evidence led to the de-registration of the internet pharmacy.

Figure 2. Dihydrocodone prices in Oklahoma pharmacies 2001.

In summary, the evidence from the USA strongly suggests the competition and purported benefits offered by supermarket pharmacies has not significantly assisted patients in obtaining safer or better prescribed pharmacotherapies.
Any effect would be marginal compared to the much larger problems evident in the US prescription drug systems.

Surprisingly little research has been reported from the USA which rigorously compares the structure and the health-related processes and outcomes in pharmacist-controlled versus supermarket pharmacies

2.4.2 OTCs in 2003 : in-store access and abuse in the USA.
In 2003 the consequences of direct promotion of over-the counter medicines (OTCs) , the accelerated 'switching' from prescription drugs to OTCs and the unhindered access and misuse of OTCs in the USA became widely recognised (Berbatis a,b, 2003).
The unremitting direct media advertising of pharmaceuticals is known to increase sales but has no demonstrable significant benefits to consumers without the involvement of health professionals (Lyles, 2002).
Frequent direct advertising of the many new potent OTCs and the indiscriminate sale of outdated and banned OTC products by non-pharmacy outlets has been reported from the USA (Pray & Pray,2003; Levy, 2003) .
The unregulated purchase of pseudoephedrine OTC products in a variety of outlets for illegally manufacturing methamphetamine has increased markedly in parts of the USA (AAP,2003). This has led to draft legislation limiting supply to a maximum two boxes per purchase, locating pseudoephedrine OTC products within 2 metres of the cash register and to tag each box with an anti-theft device but the proposal has drawn criticism from a spokesman for convenience stores selling these products (AAP, 2003).
The abuse of OTC cough medicines with dextromethorphan and chlorpheniramine has been widely reported in the USA and the number of telephone calls nationally to poisons centres relating to cough medicines increased by 35% from 1999 to 13,393 in 2000 (Levy, 2002).
The abuse of OTCs , especially those containing antihistamines, opioids, dextromethorphan and pseudoephedrine, is most common in adolescents aged 12 to 17 years in the USA according to a recent review (Doering & Boothby, 2003) .
The heavy advertising and wide non-pharmacy availability has led to rates of self-medication to primary health care involvement estimated to be one quarter of those reported in Australia's pharmacies (Berbatis b, 2003).
This would almost certainly result in a lower rate of detection of suspected misuse and denial of OTCs than that reported in Australia's pharmacies.

2.5 Pharmacy deregulation in the UK in 2003
On 17 January 2003 Great Britain's Office of Fair Trading (OFT) announced that an investigation of entry regulations and retail pharmacy services had found controls restricted consumer access to pharmacies ( location and opening hours) and price competition on OTC medicines and led to increased costs (www.doh.gov.uk/pharmacyregulationconsultation/ 26/10/2003).
The OFT recommended abolition of controls regulating pharmacies dispensing NHS prescriptions. These proposals were lobbied for by the big supermarket and discount store groups there ( Murray-West,2003) and were 'watered down' in proposals made by the Trade and Industry ministry in July 2003. In England the Government's responses on 29 August were to :
(i) propose new criteria for the entry of pharmacies for more competition and choice,
(ii) four exclusions to the criteria were pharmacies in new shopping developments over 15000 square metres, new pharmacies which plan to open more than 100 hours weekly, pharmacies in new one-stop primary health care centres, or wholly mail order or internet based pharmacies.
Submissions have been invited to 21 November 2003 (www.doh.gov.uk/pharmacyregulationconsultation/ 26/10/2003).
Independent pharmacy groups and pharmacy bodies are critical because more NHS contracts will be awarded to new shopping centre pharmacies while chain pharmacy and supermarket groups welcomed the government's proposals (Buisson, 2003).
The Pharmaceutical Services Negotiating Committee (PSNC) in its report Community pharmacy services - integration not deregulation (February 2003) responded by identifying flaws in the OFT proposals.
The PSNC also pointed to the underutilised abilities of community pharmacies in primary health care and work already in progress such as repeat prescribing, arrangements for pharmacists to manage minor ailments and structured medication reviews for patients with chronic conditions which will reduce GP workloads and improve access to GPs.
The PSNC claims present community pharmacy services can be improved "without deregulation" , local competition already exists between pharmacies and patients have "… a choice of pharmacy…". These issues were reported in Australia's Galbally Report and will recur with the impending challenge of supermarket pharmacies in this country.
The National Pharmaceutical Association (NPA) which represents independent pharmacies, has openly fought the effects of pharmacy deregulation and the incursion into England of national and global shopping centre groups.
The reports Ghost town Britain - a lethal prescription, - the impact of deregulation on community pharmacies ( August,2003 , www.npa.co.uk/menu.html ) and Ghost town Britain - the threat from economic globalisation to livelihoods, liberty and local economic freedom ( August, 2003 , www.npa.co.uk/menu.html ).
The OFT pharmacy deregulatory proposals were rejected by Scotland, Wales and Northern Ireland based respectively on their reports The right medicine : a strategy for pharmaceutical care in Scotland (2002) and Remedies for success : strategy for pharmacy in Wales ( 2003) and Making it better : a strategy for pharmacy in the community (2003).
The rationales in them outlined the structure and new processes in pharmacy in each country with information on pharmacy's expanded health-related activities and access to the public.
The claims of savings due to the OFT's proposed reforms are being tested in pilot programs.
The public's response was crucial with "…90% of the Scottish people …happy with the location of their pharmacy…" (Thompson, 2003).

3. 0 Pharmacy : population ratios
The pharmacy : population ratios are approximately USA 1: >5200 , UK 1: < 4800 , Australia 1: < 4100, New Zealand 1: < 3900 and N Ireland 1: <3200.
The demographics and economic and health systems and the prescriptions dispensed per capita differ modestly.
It appears prima facie that the high proportion of supermarket and mass merchandiser pharmacies in the USA may be suppressing the proportions of pharmacist-controlled pharmacies

4.0 Conclusions
The following main conclusions are drawn from the above data.
· In the USA supermarket and mass merchandiser pharmacies comprise more than 25% of community pharmacies compared to less than 4.5% of pharmacies in the UK
· Supermarket pharmacies in the USA appeared active across a range of health-related activities such as screening for diabetes, hypertension and hypercholesterolaemia and immunisation but the prevalence and outcomes of few of these have been quantified or reported in peer-reviewed publications
· Salaries for US pharmacists are reported to be higher in supermarket than other types of community pharmacies but the validity of the surveys needs to be verified
· In the USA supermarket pharmacies cooperate well with university faculties of pharmacy and in pharmacy residency programs
· In the USA supermarket pharmacies do not significantly improve the prevailing poor access to prescription medicines in the USA
· The price of prescription medicines in the USA is up to 160% Australia's and there is little published evidence the prices of dispensed medicines in non-pharmacist-controlled pharmacies in either the USA or UK are significantly lower and have improved access above that of drugs dispensed by independent pharmacies though Australia's Pharmaceutical Benefits Scheme
· The much lower prevalence of supermarket pharmacies in the UK than in the USA is confirmed by supermarket companies lobbying very strongly for more supermarket pharmacies in the UK
· The policies employed by pharmacy bodies in each part of the UK to resist supermarket pharmacies and encourage independent pharmacies in 2003 need to be analysed by Australia's pharmacy bodies because of the similar pharmacy structures , health systems and currency of pharmacy deregulation in the UK.
· supermarket pharmacies have undeveloped processes for preventing the abuse of dependence-producing OTCs which appears to have increased since 1999
· In comparison to the UK the USA has more than five times the proportion of supermarket /mass merchandiser pharmacies and over 10% less pharmacies per capita than the UK . These data suggest supermarket pharmacies may decrease the viability of independent pharmacies .
· in the USA with probably less access in remote and rural and deprived areas. Australia has approximately 20% more pharmacies per capita than the USA so the introduction of supermarket pharmacies in Australia will predictably lower the access especially in remote, deprived and rural areas. Australia's pharmacy bodies need to analyse the impact of supermarket pharmacies on people's access to pharmacies in areas of special need.
More analysis of national standardised statistics and comparisons of health -related processes and outcomes of supermarket versus pharmacist-controlled pharmacies are required before drawing firm conclusions.

For an explanation of terminology used, click here

List of References at this link

Declared interest: shares are held in Westfield Shopping Centre Group, Woolworths Ltd and Mayne Ltd

Con Berbatis
31st October 2003.