..Information to Pharmacists
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Your Monthly E-Magazine
NOVEMBER, 2003

NEIL JOHNSTON

Management Consultant Perspective

When Rape is Imminent

One of the most obvious attitudes, that I picked up after running a group of articles relating to Woolworths last month (follow this link), is the feeling of inevitability expressed by a large number of pharmacists.
Taking Roger Corbett, Woolworth's CEO, at face value, we have hundreds of pharmacists looking to take advantage of a Woolworths proposed offering.
Getting in on the ground floor, even before the Woolworths offer is a reality, suggests an opportunistic train of thought.
On the one hand, it is accepting that Woolworths will win and that this is an inevitability; and on the other hand, by turning away from existing pharmacy models, it is saying that these models don't measure up.

If Pharmacy was a well-led business/profession, there would be no underlying concerns when a Woolworths comes on to the scene, because there would be that inner confidence of individuals, and the cohesiveness around leadership, that would dissipate concerns and develop genuine strategies to cope with all levels of competition.
This does not seem to exist
.

Instead, we have the national leader of the Pharmacy Guild of Australia (PGA) going to print in the Australian Journal of Pharmacy on two occasions--one to give spurious arguments against a corporate pharmacy model, the other to publicly admit defeat in preliminary negotiations with Woolworths, to try and head off their involvement in pharmacy.

Why he was even bothering to talk to Woolworths in the first place is a mystery!
To tell the world about it is simply inept!

Since then, we have seen some party-political leaders making statements of support for pharmacy (The Nationals federally and state Labor in NSW) and possibly others I am unaware of.
It must be comforting for some to know that there is at least a degree of public support for pharmacy's "cottage-garden" approach.
This will be as a direct result of PGA lobbying as a first line of defence for their existing flawed strategy.

Now I say flawed, and I do not resile from that comment, because there is no Plan B to go with that strategy.
Political protectionism is only valid if you are using the process to buy time to develop a pharmacy model alternative, and one that can be built to stand up to a Woolworths or a Coles or a Walgreen.
As there is no evidence of this, pharmacists are gearing themselves to scramble for the best options that they can individually negotiate.
This is what Roger Corbett will skilfully exploit.
There will be no long term winners in this "scramble" because those pharmacists will have to sell their sole to survive.
The pharmacists that are left behind will be collectively weaker as a result, and will be easily "picked off".

It is this image of a weak PGA (despite its lobbying successes) that will encourage Roger Corbett to "go for broke"!

Reinforcing these feelings of inevitability are the range of "bitter-sweet" comments posted on AuspharmList by individual pharmacists, ranging from the exasperated to the resigned.
The PGA should be listening-and I mean really listening-- to these collective comments, and they should be moving to generate some positive feelings through positive leadership.

Do they have the capacity?

Judging the current performance, I doubt it!

Does this have to be?

Hell no!

It would not take too much imagination to set up a task force that draws from a wide range of pharmacist "thinkers".
It could be strengthened with a range of people outside of pharmacy, but who possess specific skills and talents, and who could objectively guide pharmacists in a world dominated by global corporates.
Perhaps a range of well rounded options can then emerge, that when put together in varying permutations and combinations, will contain a range of pharmacy practice models, with directions that will match individual pharmacist apirations.
This should be done well before governments impose their own version, glimpses of which were revealed through the CoAG committee in the wake of the Wilkinson Review.

Or face the alternative of a Woolworths view of pharmacy actively supported by government.

The terms of reference of such a task force could also be broadened to include rationalisation of the various pharmacy bodies.
Do we need so many?
Are they overlapping?
How should their activities change to accommodate the models of pharmacy recommended?

This latter point should be exercising the mind of every PGA executive and manager right at this moment. Remember, it is your jobs and your future that are also on the line.

Remember too that the PGA have a conflict of interest with any corporate model, in fact any model outside of the "cottage garden" variety. These are the models that will not likely be members of the PGA, simply because services and activities would not "fit" with pharmacies strong enough to stand on their own two feet. That is, unless the PGA changed its delivery of service structure.

In a very real sense, the PGA is between a rock and a hard place.
If it cannot fend off Woolworths pharmacies, it will end up with a diluted group of members, weakened by their attitudes and values in supporting an outdated pharmacy model, weakened also by their loss of numbers.
If the PGA is seen to support a corporate model, all the myths of the past will emerge as a result of the "cultural infection" initiated by Boots the Chemist, when it attempted to enter Australia half way through the last century, with its own corporate, non-pharmacist owned model.
This outdated "cultural infection" is still being passed on from generation to generation of pharmacy leaders, and the mould needs to be broken.

From the correspondence I am receiving, I know that Woolworths have been in discussion with pharmacy wholesalers, that Woolworths can deliver traditional health services at a cheaper price (because of its infrastructure and supply chain reforms-see the research of Con Berbatis in this edition) and that it has more than enough interested pharmacists to launch its program successfully.
I would refer you to an article by corporate strategist Dan Da Silva also in this edition, where he points out that if one of the major pharmacy wholesalers falls prey to Woolworths (or similar), pharmacy's ability to develop successful strategies is deeply impaired, both defensive and offensive (follow this link).
What Woolworths can't do is give the heart and soul of professional purpose-only an independent pharmacist or pharmacist group can deliver that, and the difference is noticeable (see letter from South African pharmacist below).

Also from this point onwards, any serious pharmacists will have an extra cause for concern, for they now face the prospect of losing control over a substantial component of the direction of their business/professional activity.
If you have any doubts in this regard, read the following comment from a South African pharmacist who has been following the Wooworths issue through AuspharmList, and through correspondence privately with Australian pharmacists. This item is from a private correspondent (since posted on AuspharmList):

"I am watching all the pharmacist's discussions on Auspharmalist and it is very interesting how Woolies want to get hold of pharmacy ownership in Australia, hopefully the Guild can stop them.
In South africa New Clicks have bought a lot of private pharmacies, about 70, and I can already see and hear from patients that their service levels and standards have dropped considerably because 'we only work for salaries now' and ' it is not our risk/responsibility anymore'.
I am registered to do all the APEC exams, because I feel that pharmacy is still strong in Oz with the Guild behind ownership, hope it stays that way!
There are also Medicine chain pharmacies whose ownership belongs to non-pharmacists and they are practically bankrupt now.
Also, the pharmacists working for New Clicks say to me that their bosses do not understand pharmacy and do not know the business, and therefore they feel frustrated and not motivated anymore.
Just shows you what a change of ownership can do to a profession.
But, hey we live in Africa and here anything goes: doctors' dispensing, corruption, crime, fraud and ownership and the downfall of the community with it all.
Maybe you can discuss this on AusPharmlist.

Regards,
very frustrated pharmacist from south Africa"

The New Clicks organisation mentioned above, is of course, the Priceline organisation here in Australia.
Priceline is already plugged into Australian pharmacy in a small way at the moment, but it is drawing "know how" from the pharmacists they are associated with. This information is being developed and stored against a time when Pharmacy legislation around ownership is relaxed, and Priceline can then charge off in their own direction.
If they succeed in buying into Mayne, they become a strong competitor.
This is really a form of rape, and as one philosopher once put it "when rape is imminent, lie back and enjoy it".
Somehow, I cannot align with that approach, and I suggest a vigorous fight is more in keeping with what should be happening. Rape will only occur if you are the weaker of the two participants, morally and physically.

Woolworths is adopting a similar strategy, the only differences being cosmetic in nature (details in the October edition).

So I would now see the challenge of developing Plan B back with John Bronger and the PGA, because of the central and pivotal role they play in community pharmacy.
Will there be the vision and integrity to lead their flock out of the wilderness, or will they stay in their insular world, propping up a set of outdated values for a model of pharmacy that will not survive.

The "grass roots" had better start stirring, and an insistence of the development of a task force would seem to be a good starting point.

Don't let Woolworths (or anyone else) in, don't allow open ownership and control, but do develop equivalent corporate structures that will deliver professional health care at the lowest possible prices.

That has to be the message!