Computachem
E-Newsletter
Editor:
Neil Johnston
Regular Contributors:
Rollo Manning
Leigh Kibby
WWW (Who,
What, Where) and E-Vents
The primary purpose of this e-newsletter is to focus information which illustrates threats or opportunities for pharmacists. Without being alarmist, it appears to the editor that many important issues confronting pharmacy are being ignored, or that there is simply a lack of awareness. These issues concern the impact of globalisation, which will manifest over the next three years and accelerate thereafter; the human resource problems of pharmacy (the lack of available pharmacists and the lack of male personnel in the total mix and balance); the slow progress in enacting some of the basic recommendations of the CoAG review, particularly the enabling legislation to allow pharmacists to incorporate; the restrictive system of approval numbers and subsequent restraint on trade, particularly where medical centre pharmacies are concerned; the need to be prepared in a regulatory and ethical sense for the next generation of genetically modified foods and drugs, and perhaps a review of ethics in general. In his regular column, Rollo Manning touches on the subject of ethics and transparency in very direct terms, stating that: "Pharmacists in Australia should be prepared to disclose the name (s) of drug companies from which they receive financial incentives to sell a particular product. By participating in these schemes the pharmacy is supporting a drug industry which cannot reduce prices to assist people in Third World countries (Africa) to access life saving medicines. " It is an established fact of life that pharmacy is, and will continue to be, under constant scrutiny from government and consumer groups. It is up to individual pharmacists to ensure that they have strategies in place to manage every emerging issue, and to ensure they are not overwhelmed or subjected to adverse community criticism.
BEWARE OF MARKETING TECHNIQUES
From Rollo Manning Pharmacists and doctors are the pawns
in the marketing game of the drug industry when it comes to achieving
corporate goals and winning boardroom prizes. Some of the "prize" is passed
on as an incentive to the health professional to play the game better.
There has been discussion this year on the morals of the "prize" and whether
pharmacists do receive incentives for selling a particular drug brand
ahead of another. Pharmacy leaders have denounced such schemes and refused
to have any part of them. Yet they go on. And to who’s benefit? Products
referred to in an Editorial from the New England Journal of Medicine may
provide a clue, when it cites manufacturers coming to cross licensing
arrangements to bring out combination products in order to extend the
patent life of individually marketed components. And to who’s benefit?
Well the drug company shareholders of course. They are who the boardroom
is accountable, and in turn the shareholders are interested in financial
return. There is also criticism in the editorial of manufacturers saying
research is the goal, and then producing "me-too" products. Once again
the shareholder is the person to satisfy. But to make this possible, doctor
prescribing and/or pharmacists dispensing is required and again incentives
enter the marketing mix as an expense item for the drug company. In a
week when the pharmaceutical manufacturing industry is being criticised
for the price of life saving drugs to African nations in the fight against
HIV, the circulation of the editorial from the New England Journal of
Medicine was timely. The article quotes the following: "The industry has
certainly been ingenious in finding ways to extend patents on its best-selling
drugs. For example, a recent Wall Street Journal article describes a complicated
business deal between Merck and Schering-Plough for the marketing of two
new drug combinations, one to lower serum lipid levels and the other to
relieve allergies. Each combination will pair one company's "blockbuster"
drug, whose patent as a single product will soon expire, with a drug with
supplementary action owned by the other company. The combination drugs
will have new patents, and both companies will share their profits. This
may be good business, but the medical soundness of fixed drug combinations
as opposed to flexible combinations of separate drugs is debatable." If
the drug company is making the product available, and flouting the patents
system, to satisfy shareholders, to whom is the pharmacist or doctor accountable
when it comes to the final move in the game of turning the pawn (the product)
into a Queen (profit)? Well if the pharmacist has shares in the drug company,
and that is very possible in the days of share based incentives or inducements
to purchase, the reward or accountability is purely financial to oneself.
(And maybe the wife and kids). The millions dying in Third World countries
because they cannot afford the drugs needed to fight disease do certainly
not feel the benefits. So what of the social accountability of pharmacy
and pharmacists? Where does it start and where does it end? If it is purely
to oneself the position is dangerous. Consumers, patrons, supporters of
the game will demand better. If there is a conscious effort to assist
those suffering in third world places, let it be seen. The word "transparency"
has taken on a new meaning in the 21st century, and it revolves around
making disclosures in the public interest. Maybe pharmacies, privately
owned, should be asked to disclose the financial interest they have in
drug companies. Not very good? Maybe not, but better to get the house
in order before being forced to by others. It should immediately be apparent
that for a publicly owned corporation transparency is mandatory, and that
is something pharmacy has said it does not want!
ends
The comments and views expressed in the above article
are those of the author and no other. The author welcomes any comment
and interaction that may result from this and future articles. The editor
would be pleased to publish any responses.
Are you thinking of embracing e-commerce? There are pluses and minuses in entering this interesting and challenging concept, but it is necessary to do a little bit of homework before you actually start up. The potential to reach new customers and service new markets, on the surface, may look enticing. The appearance of being able to set up, and perform with a minimal cost and effort, is appealing. This perspective, however, is too superficial. Certainly there are a number of e-commerce successes to point to, even within pharmacy ranks, but the market is currently shaking out those people who did not observe basic business fundamentals. The failure rate is tending to deter new entrants into the e-commerce field, and lenders have suddenly become more conservative. However, with careful planning, and looking to the longer term as all good investors should, it is just like any other type of investment, and involves a reasonable risk. A business plan, which incorporates a strong marketing subset, is an absolute essential. Without knowing where you are going or what you are doing, it is impossible to communicate your vision to other people e.g. web designers and programmers and through them, your customers. Web designers will generally have no experience of pharmacy, or at best, a very limited experience. This means that the intuitive "feel" that pharmacists have for their own business, can easily be lost in the translation, leaving potential customers feeling alienated. If you can secure an experienced website developer, who is also a pharmacist with a marketing background, then you are on the way to success (note the qualification of "experienced"). While customers visiting your e-commerce site, may, in some instances, be the same customers that walk through your "bricks and mortar" front door, never assume that they have the same personality, or will abide by the same set of rules. All customers will require a high standard of service, good prices and products plus on time deliveries. They also need to know that your e-business will be reputable and trustworthy and will stand behind the products sold. Online customers will want to see all these things stated in writing, on your site and will demand interactivity. Further, they will want an online relationship that gives them both power, and the ability to dialogue. If you are not prepared to recognise this fact, you will not build a repeat customer base. Having a customer walk through the "cyberdoor" and actually make a purchase is only part of the total experience. Fulfillment is probably the biggest single factor in keeping your customer. The Internet allows for fast decisions from a wide set of choices and so you must have a fast delivery service to match the online customer's expectations. Most e-commerce businesses have failed on this single point, and a lot of damage has been done through late delivery or no delivery. The delivery component of your market plan must be thoroughly considered. Will it be Australia Post, a local courier or a service specialising in e-commerce fulfillment? Perhaps it will be a combination of all the above. Many e-commerce businesses are still giving poor delivery service, but the influx of new customers tends to provide an expanding business base. Unless they tidy up their act, they too will become future crashes. Many businesses are good at taking an order, but never seem to learn how to fill an order. The e-commerce field is littered with this model, perhaps because they have not had "bricks and mortar experience" and it is the latter type of business, with an e-commerce extension, that is most liable to flourish into the future. Best estimates are that 25% of pharmacy sales will be online within three years with the possibility of 40% within five years. At the moment, most pharmacists have allowed about 8% of their sales (private prescription sales) go to one well known direct mail order pharmacy, which is a massive market share! Worse still, this is the market segment set to expand in the immediate future, with increased loss of market share for those pharmacies not geared to compete. Traditional competitors (Woolworths, Coles etc) will soon gouge extra market share away from those pharmacies that do not defend themselves, and competitor investment in e-commerce is running into the millions of dollars, and incessantly expanding, at this very instant. Many e-commerce businesses are trying to build a recognisable "brand" by spending a fortune on television and using celebrity presenters in a bid to be noticed. Most are ignoring the basics, and it is here that pharmacy can win, with a little thought. Pharmacists already have a collective image, and it is a good and trusted one, as evidenced by the various Gallup Polls. Pharmacists are seen to have good ethics, to be honest and are thus trusted. This is an image that must continue to be nurtured, so it is important that those few who engage in unethical practices e.g such as the New Zealand pharmacies that are selling prescription items without a prescription, be ushered out of e-commerce as soon as such practices are discovered. It is far better to establish a point of difference that is forceful, transparent, and easily explained. To establish a clear market position and a clear target audience and develop a simple and easily understood brand name is the main objective. Do not forget that the most important component of your brand name is your own name, coupled with your trading name (if it is a different name). This is how you started life in your "bricks and mortar" business, and if you have been successful in your local region, this is how you will be known. To complete your branding, you can add your market group name e.g John Smith's Chemmart Pharmacy. The primary e-commerce difference is to establish a clear point of difference, and this should not be price alone. All prices must be competitive, but not set at a level where you are chasing cashflow instead of profit e.g Amazon.com, who have an amazing customer base, but no profit. The credit line will eventually be exhausted or the owners will lose control of their business eventually. At Computachem, as a point of difference, we are encouraging our clients to seek out and service those forgotten customers….men! Medical practitioners specialising in men's problems have tapped a vein, which has become very profitable. There is hardly a newspaper or magazine that does not feature some advertisement for impotence, prostate problems etc. But men offer more potential to be the conduit for e-commerce. For the moment, it is a fact that there are more male Internet users than there are female. Globally, females are beginning to catch up, partially because education is being presented in a creative fashion (note the article on eHardware following in this edition). Therefore, it should be strategically feasible to challenge a male to enter a pharmacy website, and be the gatekeeper for the rest of the family. However, to keep that male as a permanent customer, the experience has to be rewarding to him personally, and herein lies a pharmacy marketing "point of difference". Recognise that the Internet is not a special distribution channel, just simply an extension of the existing business mix. Some businesses will use it more than others and for some, it will dramatically change the way they do business. For most, it will be a gradual process. That the Internet is a different distribution channel and requires different skills and processes does not mean that it is a superior distribution channel. I do not think that your Internet business will claim the major market share of your existing localised business at any future date, but it does allow you to roam outside your normal catchment and poach market share from more distant competitors. Recognise that the Internet is different but not more important than your other business forms. E-commerce must also be transparent. All regulatory matters must be attended to and a full disclosure of ownership of the site, a fair trading policy and all site housekeeping must be performed regularly. E-commerce sites should be monitored financially as a separate division within your business (or be run as a separate business). If you have to borrow to develop an e-commerce business, ensure that the projections are realistic. Lenders are looking very closely before making advances, given the number of failures due to outright carelessness. And a final piece of advice. Don't be stampeded into investing in new e-commerce technology if you are not fully committed. The Internet allows people to get their name up in lights relatively cheaply, without much substance behind the gloss. If your competitor goes down this pathway, identify the threat exhaustively and see if it can be balanced with some creative opportunity. If still in doubt……don't!
An Australian Internet hardware store (surprisingly called eHardware) is targeting women to spearhead its online expansion. The marketing process involves comparison shopping through demonstrations at major shopping centres. Two volunteers are selected, one to shop online and the other to shop by the traditional method. The person selected to go online is given a cup of coffee, while the traditional shopper is asked to carry parcels and push trolleys. Of course, the convenience aspect is highlighted immediately and some useful Internet access training is passed on to the audience. eHardware has an inventory of 20,000+ products, including specialty electrical goods, power tools, and garden products. Women have traditionally felt alienated from the hardware environment, but have enthusiastically embraced the concept of Internet shopping during the shopping centre demonstrations. This innovative approach is developing new business and is one that pharmacy can definitely emulate.. In Leigh Kibby's article series "You've Got Male" (further along this newsletter) it is illustrated that men have been alienated from the pharmacy experience. The Internet represents a new way to develop a "male" market, particularly as men are adaptable to technology type approaches. In fact, men can be utilised to provide a gatekeeper role for family shopping. eHardware is backed by Murdoch Magazines. It was recently ranked fifth in the house and garden category of Hit Wise Australia's Top 100 listings, and 14th in the shopping category. Alliances have been formed with Australia Post and Internet Service Providers, FreeOnline.com.au. Through "The Buy Australian Free-Online" shopping mall, eHardware gains valuable exposure. The mall features contact details for more than 40 retailers in the music, garden, sport and craft activities and eHardware is very pleased with the current sales results from its marketing efforts to date. A new extension to e-commerce education commenced recently in the UK. Here, a television program has been built around a good marketing idea plus the provision of website designers and programmers, with a little bit of audience participation thrown in. Entitled "Who Wants to be an E-Millionaire?", contestants write in with an e-commerce idea, and the best are selected for presentation on television. The contestant then explains the concept to a TV audience and the most innovative ideas are voted on by the audience. From that point, the contestant is supported with the human resources and technology required to bring the idea to life, and a one month timescale is allowed for completion. The contestant then returns to the show and gives a demonstration of the website and the wider TV viewing audience then votes on the suitability, usefulness and attractiveness of the site, ease of navigation etc. The winners get a flying start for their new e-business idea, plus a range of prizes, all capped off with ideal exposure on television. Sounds like a great encouragement for small business entrepreneurs and an idea which could be emulated in Australia to generate interest for people of all ages.
Imagine an Australian e-commerce exchange that will initially purchase $8 billion of products and services each year. Imagine further that it is involved with 14 of Australia's largest enterprises, and you have CorProcure, Australia's first big B2B exchange The companies involved are AMP, ANZ Bank, Australia Post, BHP, Coca-Cola Amatil, Coles-Myer, Foster's Brewing Group, Goodman Fielder, Onca, Pacific Dunlop, Qantas, Telstra and Wesfarmers. It is envisaged that this new alliance will save the participants between 2% and 8% of their operating costs, which translates to approximately $400 million across all 14 companies. It is further envisaged to commence operations towards the end of this year. Each participant has contributed $1 million towards start-up costs (which are estimated at $30-50 million) and are currently seeking a technology partner. Existing suppliers to each of the participants are fearful of being hammered on price through the new cartel. Not so, says CorProcure, just a desire for greater efficiency. In theory, Internet buying is more efficient and will generate cost savings. In practice, CorProcure will be able to post Internet-based tenders for all their supply contracts, forcing existing suppliers to offer more in price and service terms. Allowing new companies to participate and become suppliers adds to the pressure. This will change dramatically the business lives of many Australian companies, large and small. Benefits obtained by CorProcure will probably flow on to other exchanges outside the cartel. Coles-Myer already belongs to a global grocery cartel and by joining CorProcure has positioned itself to benefit from product and overhead costs. This is basic, to fend off competition from global players such as Aldi, and other giant retailers waiting in the wings. BHP, another of the cartel members, has stated that it costs $50-100 to clear a purchase order. Over the Internet, cost per order is estimated at 50c to $1, which translates to big savings. Supplier companies that do not adapt their systems to the Internet will be excluded totally from the tendering process of CorProcure.The Australian Competition and Consumer Commission is conducting a watching brief on CorProcure and similar cartels, but has stated that while the participants are diverse, and do not concentrate a commodity or a service in a restrictive manner, they are free to expand their operation. Pharmacy has created a similar exchange between manufacturer and wholesaler, but the benefits to the retail sector are not in place as yet. Retail pharmacists, because of their individual small size, and with many outlets in a given catchment area, are already disadvantaged in this process. Thus, the need to have corporate structure, as recommended in the CoAG review is extremely urgent, to enable mergers of pharmacies to create new, larger and more viable entities.There is every reason to believe that this process is evolving at a pace that will ensure pharmacists will be overwhelmed by their competitors- global and local, both "bricks and mortar" and especially Internet versions.
Norwalk virus is a major cause of food borne illness in the US and most of the developed world. For the first time, scientists have been able to develop immunity from a virus, by genetically modifying a potato ie via an "edible" vaccine. Research into other potato produced vaccines has involved Hepatitis B and E.Coli, and the process looks set to develop a range of vaccines at a very low cost. Opponents of the process claim, however, that it is simply bad medicine. Concerns range from environmental damage, to lack of control of vaccine dose, which may prove toxic in overdose, or disease outbreak if underdosed. The transference of engineered genes to other plants appears to be the major environmental concern. Opposition has been so vocal that it has slowed down pharmaceutical company investment in genetics. But the promise of these biopharmaceuticals may outweigh the risks. Vaccines that prevent diseases such cholera and the Norwalk virus could save countless lives, particularly children. Plant based vaccines do not require refrigeration or needles, and can be easily transported to (or grown in) developing countries. There has even been a limited success in transferring fragments of surface proteins of HIV into plants, with the view to producing an edible vaccine to benefit countries such as Africa, where AIDS has reached epidemic proportions. Meanwhile, as a pharmacist, what are your thoughts involving the ethics of this type of production, where are you going to store your genetically modified Smith's Crisps, what poison's schedule would you recommend and yes, will you be concerned if the product is sold in volume through the local supermarket?
Reported recently in New Scientist was the fact that scientists now have the ability to construct an artificial chromosome, insert it in a mouse and have it pass from one generation to the next. So far the artificial chromosome has been passed on to three generations of mice. This line of research opens up the possibility of loading human cells with extra chromosomes, purpose built to produce a therapeutic protein, and which will operate completely independent of natural chromosomes. The possibility of treating genetic diseases with chromosomes that can be inherited opens up a range of possibilities that will be unable to be ignored. The researchers started with a natural chromosome which had all functional genes removed, but which retained some key elements, such as the telomeres. Telomeres are the tips of a chromosome, which prevent fraying and damage. It is thought that the fraying and wearing of telomeres is a core part of the aging process. Also retained were the central X-shaped centromere, and regions of satellite DNA at the root of each of the chromosome's four "arms". Genes are then implanted into the satellite DNA. It is possible to implant multiple copies of the same gene. The amount of protein produced by these chromosomes is in direct proportion to the number of gene copies. As the chromosome does not interfere with natural chromosomes, the process is considered safer than inserting genes directly into the host DNA. The researchers are currently testing a chromosome to ease the symptoms of rheumatoid arthritis. Chromosomes are being inserted into cultured cells from rats, which are then injected into the rat's joints. If successful, human trials will begin. The whole process of genetic engineering is beginning to raise moral and ethical doubts, even amongst the scientific community. What position will Pharmacy take when more of these processes become available, some for distribution within community pharmacy? An ethical position needs to be considered and allowed to evolve, to ensure that pharmacists are not ensnared in a debate they cannot win. In a different area, Rollo Manning's article in this issue, has highlighted ethical concerns ,which have already sparked debate, and impacted negatively on Pharmacy. In our last edition, it was reported that "human milk" was being produced from transgenic cows for baby formula. Would you give your baby this product? The major concern is that health benefits from genetic engineering are being used to promote a universal acceptance of genetically modified processes, particularly with foods. This type of promotion is totally profit orientated, and gives scant regard for the possibility of long term health problems emerging, or irreversible damage to the environment. As pharmacists have already succumbed to one reward scheme promoted by a drug manufacturer, will they succumb to another promoted by a genetically modified food or drug manufacturer?
YOU'VE
GOT MALE!
By Leigh Kibby
"Can I help you even more sir?"
Men in pharmacies, those shy creatures who look around furtively whilst standing near condoms, secretly hoping the extra large is really meant for them. We know this is part myth and part truth, but it does indicate a problem that is both the responsibility of the pharmacist and men. Men on their own volition are unlikely to reach out in the immediate future. So, the question becomes, what can the pharmacist do to encourage men to become regular customers? There is a strategic way to successfully address the psycho/social process of getting men into pharmacies, which require some planning and effort. The total package looks like this:
Awareness >>Education>>Entry>>Responses>>Supply of Product/ Return Customer Referral
For most pharmacists, this is a big picture that really needs to be addressed by the co-ordinated efforts of key players. However, the plan can be translated into some simple action that can be undertaken on a small scale at a local level. 1. Build relationships with men where men gather, the first port of call being the workplace. This is based on the successful model currently in use by those pharmacists who offer free talks to mother's groups and it can equally be applied to men. By approaching local workplaces via either managers or occupational health and safety officers, pharmacists can offer to discuss a relevant issue and be seen as part of a network. 2. Provide "men times" when a male staff member will be available for men. Such times should be clearly posted somewhere in the pharmacy and become the subject of a news piece for the local newspaper. A flyer to this effect can be placed on the noticeboards at local workplaces. 3. Train staff in interpersonal and rapport building skills that will work with men. 4. Establish a network with your local GP, sports masseur, sports club, chiropractor and allied health professional and let them know how you "help men". These networks are invaluable for all concerned and will provide a link to men. 5. Provide "men friendly" information with every purchase for a few months and promote your "men friendly" actions and times. Of course, there are many ideas, as diverse and successful as there are pharmacists. These are just a few. To put them in context, the next article will discuss more issues related to men’s health and well-being so that you know the key issues. If you have any questions, feel free to e-mail me at the address below. The comments and views expressed in the above article are those of the author and no other. The author welcomes any comment and interaction that may result from this and future articles, and can be contacted directly by e-mail at leigh@kinematic.com.au . Alternatively, the editor would be pleased to publish any responses directed to neilj@computachem.com.au .
Polystyrene foam has been utilised as an insulator for many years. Now a new use has been found. Scientists based at the Los Alamos National Laboratory in New Mexico have modified polystyrene molecules to collect and store energy from light, in the same way that plants do by photosynthesis. This means a new process has opened up to produce a new breed of batteries that could provide cheap power for most electrically operated processes, mobile phones, computers, and even provide power to drive motor vehicles. In plants, photosynthesis is a complex chemical process that can store energy from sunlight in chemical bonds. The first step is the absorption of a proton utilising the green pigment, chlorophyll, which then propels electrons around the chemical bonds of the molecules involved in the reaction. This strips electrons from water to make oxygen, and adds them back to carbon dioxide to create sugars. Scientists have been able to recreate these steps, using different synthetic molecules that work in conjunction with an atom of the metal ruthenium on a polymer "backbone". This inexpensive process is being targeted to produce solar-powered fuel cells that pull electrons from water to create hydrogen, or to generate an electric current. The potential is such as to leverage power mobility to a much higher plane, with the promise of less pollution compared to other forms of energy production.
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