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Pharmacy 2008 Conference Highlights

Neil Retallick
A Friendly Society Perspective

Issue 76: October 2008
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Pharmacy 2008, the pharmacy management conference, was held in early September in Cairns. Those who attended enjoyed not only the warmer days and nights but the quality and diversity of the opinions, arguments, positions and ideas presented.

As the first presenter Dr Norman Swan,from the ABC's Radio National Health Report, set the tone for the two and a half days of sessions that followed.
Dr Swan argued for pharmacists to acknowledge and accept their role as primary healthcare providers in an evidence-based healthcare system.
Australia’s healthcare system is heavily reliant on prescriptions, with around 170 million written each year.

Whilst the partition between the doctors prescribing them and their being dispensed in community pharmacy removes any possible conflict of interest, Dr Swan issued a warning to community pharmacists.
The problem as he sees it is that while pharmacists are trusted by the community at large as a reputable source of information, they also profit from the products and advice they provide. Compounding was cited as an example.
Compounding allows a pharmacist to tailor the delivery form of a medicine according to the consumer, but compounding is also a significant contributor to profit margins.
To maintain the trust of his or her constituency, the pharmacist needs to manage this possible conflict of interest.

Many products sold at retail in the community pharmacy environment lack the evidence base to support their being recommended by pharmacists, according to Dr Swan. Community pharmacists put their credibility at risk by endorsing these products.

Dr Swan sees an opportunity for community pharmacists to play an increasingly important role in the Australian healthcare system.

However, pharmacists need to ensure that their involvement is based in activities and programs that are in themselves based upon the evidence that comes from the rigorous research that typifies the development of pharmaceutical medicines.

This dilemma that confronts community pharmacy every day was brought into clear focus by the two speakers that followed Dr Swan.

Norman Thurecht, Partner at JR Pharmacy Services presented a range of methodologies pharmacists might use to maintain and/or maximise the profitability of their dispensaries. Developed out of the learnings from his pharmacy accounting experience, Norman reviewed the impact on dispensary profitability of the changing regulatory environment and the PBS Reforms in the short, medium and long terms. Wh

ilst the short term looks comfortable, the longer term after 2013 may be more challenging. It is likely that the Weighted Average Disclosed Price (WADP) mechanic already set in place by the Federal Government will be first triggered in the second half of 2009 and will gain momentum into 2010, impacting pharmacy margins significantly.

Michael Morrison, Lecturer in the Department of Marketing at Monash University, considered the need for community pharmacy to connect with its customer base, to engage their emotions and excite them.

This is a challenge for all retailers, including community pharmacy when it is seen as a retail healthcare destination in its local ‘village’. Michael reviewed the social and technological influences on consumers and the trends that have evolved from these. He argued for the development of new value propositions for today’s consumers – the need for personalisation (note the compounding reference above) and allowing the consumer to be involved in developing/delivering whatever solution the consumer is seeking. This engagement approach, called co-creation by Michael, adds a value component for the consumer that cannot, he argues, be substituted by price discounting.

Thus by lunchtime on the first day of the conference, delegates were confronted by the broad diversity of issues that render community pharmacy the very complex business that it is. On the one hand there is the issue of community pharmacists ensuring their credibility in the communities they serve – the positions of trust they hold in Australia’s healthcare system – is maintained. Advice predicated on evidence-based research is key here. On the other hand, there is the need to operate a commercially sustainable retail healthcare destination that supplements the diminishing profitability of community pharmacy dispensaries. The latter issues inducing community pharmacists to move out of the comfort zone that is evidence-based medicine.

As the Government works to reduce the cost of the PBS, with the consequent reduction in dispensary profitability, community pharmacists will be forced to make some difficult choices in the years ahead. The Pharmacy 2008 conference is to be commended for encouraging this discussion.





Jim Howard opens the Pharmacy 2008 Management Conference at Cairns

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