Published by Computachem Services

P.O Box 297.
Alstonville. 2477
NSW Australia

Phone:
61 2 66285138

Recent attempts by Woolworths to open up pharmacy ownership have sparked media comment and frenzied political lobbying by the PGA.
For the moment, the PGA appear to have contained the ownership issue to a managable level, but obviously there has been interest generated from a range of other organisations who can see, from their perspective, better ways of marketing and managing some activities of pharmacy.
This interest, while in many ways threatening to the official interests of pharmacy, could represent creative alliance opportunities to advance the cause of pharmacy, while simultaneously increase the diversity and opportunities within pharmacy.

While I do not advocate (at least at this stage in pharmacy development) that ownership of community pharmacy should devolve to non-pharmacy business interests, there is no reason why specific areas of pharmacy could not be shared with suitable alliance partners, utilising their capital and entrepreneurial perspective to lead the way to a better solution.

Of course, one could argue that by passing pharmacy "know-how" on to other organisations in alliance, could eventuate in more pressure back on the pharmacy ownership issue, as these organisations join Woolworths et al in their quest for pharmacy dominance.
On the other hand, you could argue that such an alliance would strengthen pharmacy, providing resources and alternative "know-how" that could eventually find its way totally "in-house", with the alliance partner being left behind.

Obviously, there is an opportunity in the middle-ground, provided there is care in the selection of an alliance partner, and that the agreements structured are fair and pitched for the long term, with pharmacy ownership firmly vested with pharmacists.

I have always been struck by the range of skills that community pharmacists embraces over their career span.
I have also been struck by the observation that each pharmacist is no longer able to focus individually on each skill requirement, because of the overall time investment required to be able to complete all these activities.
Life is just too busy!
While this is a global phenomena, it is not going to go away without proper planning for time management with delegation.

Delegation can occur by training people internally to do various functions that require skill, or it can occur by negotiating some segment of your business (in alliance) to another organisation where the benefit is going to be greater than going it alone.
There must be be mutual profitability (win/win) scenarios for both alliance partners.

We have experienced this in the photoprocessing business where initial alliances were with external photo laboratories, and then on to in-house minilabs. Now with the rapid changes in digital imaging we see a farming out to external organisations using terminals marketed as imaging kiosks.
However, some pharmacists have been able to keep abreast with both capital requirements and the necessary skills, to do all their digital imaging in-house.
Along the way the total market has always expanded, but new non-pharmacy organisations have absorbed some of this market.
What remains is always very viable and profitable for pharmacy but there needs to be that extra vigilance required to stop sudden shifts in the marketplace.

This type of alliance structure has never seemed to permeate the professional services area of pharmacy to any great degree, and attempts to generate professional alliances are generally treated with suspicion, even hostility. Even pharmacist-controlled attempts to provide services in a non-traditional manner e.g. online pharmacy, have been met with hostility from within the profession.
However, this may be about to change in a very forceful manner.

A new entrant has been recorded as entering the pharmacy scene, and they style themselves as Pharmeasy, a subsidiary of Advance Healthcare Group Ltd, which is a listed public company.
Pharmeasy intends to operate a call centre to provide pharmacy supply and prescription management.
It is rumoured that they have alliance arrangements with Health Communications Network (HCN) and ePharmacy.
They also appear to have a relationship with at least one medical fund (HCF) who is openly supporting them to their members, and they have an advisory board with some prominent political names (Michael Wooldridge, the ex federal minister for health and Kate Carnell, pharmacist and ex chief minister of the A.C.T).
Obviously, this represents a threat to all pharmacies, with perhaps the exception of ePharmacy, who are obviously gearing up for the era of electronic prescriptions (when legalised). With HCN controlling up to 75 percent of GP desktops around Australia, potentially this represents a situation where a small number of people may eventually control a large market share of prescription business around Australia.

While this is a threat to a majority of pharmacists, it also represents an opportunity for every pharmacist to review their own prescription management practices, and take steps to secure their own immediate area, or tie in with other regional/national organisations, depending on the depth of individual ambitions.
While pharmacists have had reasonable experience in marketing products, they have not developed a great range of skills in marketing professional services.
These skills will have to be developed in-house or acquired from an external source, as a prerequisite for meeting this new challenge.

Pharmeasy appears to have developed a rational marketing plan, no doubt helped by a transfer of knowledge from a pharmacy source.
They will, in fact, be an Internet/mail order pharmacy without owning the actual pharmacy (shades of Woolworths "bricks and mortar" approach), and will earn their income primarily from product sales.
The recent sale of the Hilton nutritional business (an open selling vitamin company previously owned by A.P.I Ltd) to Pharmeasy gives them an instant mail order/online customer base from which to build from.
They are building premises at North Rocks in Sydney as a pharmacy warehouse, and it appears that the prescription management service will also operate from here.

Little is known about the financial and other arrangements with the pharmacy.
Obviously, the pharmacy will pay some form of franchise fee to become the annointed dispenser of prescriptions.
Pharmeasy could elect to deal with just one pharmacy, or make separate arrangements with other pharmacies located near where the client lives.
The risk/benefit of such an arrangement can only be assessed by the pharmacist(s) involved.

Pharmeasy promotes the following message to potential clients:

* For patients on regular medication, a free and personalised medication management service
* Patients to send physical prescription to Pharmeasy (they do not arrange to pick up, but will communicate with doctor's surgeries. This direct communication will increase when electronic prescriptions become legal).
* Medicines delivered discretely in brown paper packages.
* A reminder alert to the patient when repeat prescriptions fall due.
* A filing system to hold patient prescriptions
* Maintenance of medical records for appropriate claims (safety net, medical fund receipts etc.)
* Competitive pricing on private prescriptions and OTC items.
* Free membership
* A delivery cost of $3.95 per parcel
* An information helpline (1300 765 888) available 9am to 6pm weekdays only.

The system is not that different to what is already offered by most community pharmacists.
It has been "packaged" to create tangibility, and relies on its core service of "prescription reminder" as its key element to drive the service.
This is one service component that patients appreciate and welcome, because it is built around convenience. It is time saving and it avoids confusion (particularly in elderly patients).
By upgrading services like the above, local community pharmacists can protect their market and block potential intrusion by Pharmeasy.
It may also pay to detail your local GP's and advise them regularly of the service you offer, particularly a pick up service from the doctor's surgery. The detailed Pharmeasy member's application form contains a range of permissions, which includes dealing direct with the doctor.
This is an important service to build awareness of now, because when electronic prescriptions become legal, there will be intense lobbying to be on the receiving end of this format.

Planning should also be occurring for the implementation of a safe encrypted document exchange system to receive electronic documents, also to file them legally in encrypted format.
There may be a few legal challenges in the communications area before it all settles down.
Already we have seen an attempt by the PGA to patent part of the MediConnect communications system; HCN are developing their own system; some Divisions of General Practice have an internal system based on PGP, Monash University have put their system out in the public domain; and the HIC is rumoured to have abandoned its original e-mail based system.
Except for one pharmacy developed system (HEALTH-Dx) there does not appear to be any universality among the systems so that all parties in the health field (and outside) can talk to each other.
Other consideration around security include the fact that the HIC want to generate all electronic signatures (rather than register signatures generated by the participants); GP's have a penchant for only using software already integrated with primary desktop software i.e. script writing software, that may eventually create legal challenges built on concentration of market share claims.

So the dust is yet to settle, and pharmacists are advised to seek out a suitable messaging system now, so that it will be in place when Pharmeasy begin their major advertising campaign, built around the ease of doctors transmitting electronic prescriptions to online pharmacies, or their equivalents.
It is advised that the system selected not be e-mail and have a key strength greater than 128 bit, also the ability to generate a private key on the desktop of your own computer, and that documents can be legally identified and stored safely in electronic format.

Challenges will continue to be issued to pharmacy at large, because outsiders who have been following the Woolworths debate, have seen opportunities they can build around the structure of pharmacy, without challenging for ownership.
Pharmacists will need to evaluate all alliance opportunities, because as has been pointed out by many writers in this publication, individual community pharmacies are too small in unit size and numbers to sustain a brand image that would drive private marketing initiatives, sufficiently to beat off major competitors.