Amazonification of Pharmacy in the UK

Yesterday, I did a check on my balance of payments at Douglas and it seems our profit margin in the past year has halved on NHS activity. This is not only a massive detriment to myself but the staff that I employ. Furthermore, waking up this morning to the news that Amazon has moved into the pharmacy sector has led me to write this article to try to figure out a strategy for my business to figure the best way forward.

PillPack holds pharmacy licenses in all 50 states, by Amazon absorbing them for $1 billion, the largest online retailer has officially entered the Federal Pharmacy business in the US. By looking at Amazon's progression of acquisitions it is probable that this is a proof of concept before Amazon roll pharmacy services out internationally. But what does this mean for UK community pharmacy?

The reaction of the US market today to the Pillpack news was a huge drop in share price of the big federal pharmacy players (CVS/Walmart etc):

In the UK, repeat prescriptions account for 77% of all prescribed medicine with an estimated 29 million people receiving repeat prescriptions at a cost of nearly £8 billion of NHS expenditure each year. The remotely fulfilled repeat prescription business is flourishing already in the UK, there are established companies such as Pharmacy2u which now do 330k prescriptions per month and newer players like the app based Echo. However, if you dig deeper it seems that these players are not profitable and seem to be hanging on in the market for an acquisition by a logistical network such as Amazon.

So what can we do?

I think a change in direction is needed, instead of focusing on prescription levels we need to look into other services that we can provide which remote prescribing cannot. This is my plan going forward:

1. Protect your NHS business, best you can.

Those patients who cannot, or do not wish to use digital technology including people with learning disabilities, cognitive impairment and the frail elderly, will have their repeat medicines proactively managed by face to face community pharmacists who have access to their clinical record and communicate with these patients before their repeat medicines are next due. There is a drive here by the NHS to move these pharmacists inside of GPs centres which is of grave concern to our existing business.

2. Make use of passive income streams:

Embed an online doctor: douglaspharmacy.com already has an online doctor we have recently changed the algorithm so that it matches other low cost prescribing services and only charges the patient £5 per consult. The resulting prescription is then sent automatically via the hubnet.io into my account.

Free online listings: If you run a Travel clinic with us join up to Getjab.co.uk or Traveljab.co.uk to get patients coming into your pharmacy for Travel services.

3. Get rid of the governance hassle.

To refocus we need to get rid of archaic practice and focus on new private and NHS revenue streams such as starting a travel clinic or looking at local commissioning via the NHS procurement portal or directly going to the CCG with proposals. To do so we need to streamline, our £30pm subscription remove the need for you to perform:

·            CPPQ Surveys

·            Clinical Governance

·            Audit Compliance

·            Standard Operating Procedures

·            Controlled Drugs Registers

·            Staff GPhC Revalidation Tracker

·            EPS Nominations and Repeats

Give us a call and we will digitize your entire pharmacy for you and put you on the right track.

4. Get rid of the paperwork.

A little known, free feature of the HubNet.io is our iPMR.  Using this tool you can digitize your entire workflow including influenza and travel consultation risk assessment forms, in the coming months we will be releasing new how to videos to walk your through the whole system and show the benefit it can have on your practice.

Predicting the Future of UK Community Pharmacy

Okay what do we know...

• NHS is overburdened, its in huge debt, if something gives the whole thing will come down.
• There is an ageing population which needs to be cared for, even more burden on the NHS and social care.
• As of 2012 they are moving lots of services into the private sector and the NHS is footing the bill.

So where does community pharmacy fit into this?

Firstly, the current community pharmacy model is extremely inefficient. The government is essentially paying for pharmacy graduates to put labels on boxes. A lot of the work a high street community pharmacy does can be outsourced and have medicines delivered to the patient's door which is extremely useful in light of the ageing population.

Its not to say that there won't be room for traditional community pharmacies on the high street but it definitely means there will be less. Currently, there is an explosion of "distance pharmacy" contracts opening up, in Islington we already have three new contracts. A lot of pharmacists do not even understand what a "distance pharmacy" is. Basically, it is a pharmacy without a shop front. They make sense as retail from pharmacy is dead, dependent on where you are you would be lucky to clear £200 profit on retail in a day.

Distance pharmacy owners know this, they operate out of low rent offices (I have seen one in a portacabin in a carpark), significantly lowering overheads and they can easily upscale. One online pharmacy I visited had 8 ACTs and 12 assistants and one pharmacist. They pushed through 50k Rx a week.

So in light of this, what hope does your average community pharmacy have?

Is the glass half empty or half full? Whenever, in any industry there is disruption in the market, the businesses which survive are those which diversify out of the traditional model and enter a niche. So what will pharmacy look like in 10 years?

• There will be more Independent prescribers and PGDs will become more established. Pharmacy will become a convenient triage system between themselves and doctors/hospitals.
• There will be more private, easy to access services from pharmacy, which significantly reduces secondary care burden.
• The majority of prescriptions will be electronic, there will be an establishment of large online pharmacies which patients can easily elect to receive their prescriptions and have their medicines delivered straight to their door.
• As more low cost pharmacies come to fruition, as they have lower overheads this will inevitably effect the global sum which will decrease even though more medicines are being prescribed.
• Pharmacists will be more involved in preventative healthcare. The NHS has established that to prevent is better to cure, and a damn sight cheaper. As their is a pharmacist on every high street in the UK, patients will present with portable biometric data for the pharmacist to interpret. For instance a patient comes in and shows the pharmacist their real time data on their BM, BP, Weight, HR, Pedometry and the pharmacist offer tailored advice.

The issue is that pharmacists are happy with what they are doing and do not want to disrupt the status quo. They would rather hide under a stone and weather the storm, however, its not a storm, its a change in climate. Its good news for new pharmacists, with fresh clinical skills, as they can move dynamically, embrace technology and show what a pharmacist can really do. However, as for the majority of independents pharmacists who own their own businesses and ultimately hold the power, this is the real rate limiting step to the progression of the profession.

Pick up the pace or walk away.