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- Issue 81: April 2009
- Issue 80: March 2009
- Issue 79: February 2009
- Issue 78: December 2008
- Issue 77: November 2008
- Issue 76: October 2008
- Issue 75: September 2008
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- Issue 73: July 2008
- Issue 72: June 2008

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We are in the process of moving all of our articles to the new site.

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Size Does Matter

Garry Boyd
From an Intellectual Capital Perspective

Issue 79: February 2009
Page: 1 of 1 Author's Profile | Send to a Friend | Printer Version
Size DOES matter!
No, no, no, i2P is not going X-rated; I refer to the size of pharmacies!
Now that hard times are said to be upon us many pharmacists are assessing their future with the view to either sell out before being forced to or make adjustments to address the dramatic fall in shop sales.

Six months ago many regarded DAA business as passé. Not so now, in fact, DAA business is becoming de rigeur as pharmacists gear themselves up to cope with the train-wreck of an economy by actively pursuing aged care business……….after all, it’s a growth area.

Phew! As if RCF’s aren’t hard enough to deal with already.

The most affected by the downturn in shop sales are those pharmacies paying eye-watering rents in shopping centres.
Simply, they have nowhere to go.

Imagine paying $1,700 per sq metre per annum for a footprint the size of a basketball court? $10k rent per week in a declining retail environment is now a recipe for potential disaster.

Despite the healthy amount of angst the industry has for “Supermarket” pharmacies, they operate well within a disciplined business model.
It is no accident that Chemist Warehouse avoids the major shopping centres.

This strategy and their business model may serve them well in hard times.
Other groups may not be so lucky.

Pharmacies that take up the space of a basketball court plus grandstand may be the most at risk as 2010 appears on the horizon.
Assuming “soft-landing” deregulation occurs and Colesworth et al gets a Blundstone covered foot in the door, these shopping centre pharmacies may appear to be very attractive to Colesworth on the surface, the problem is, they won’t pay $1,700 per sq metre.
This will dramatically reduce the “presumed” value of any pharmacy strategically located next to Colesworth.

This situation is made worse by the fact Toll Holdings may be lurking with the view to enter pharmacy distribution.
Instead of Sigma, API and Symbion, pharmacies could end up with a choice of Toll or Colesworth.
I doubt that anybody other than Toll or Colesworth would see that as being; “In the best interest” of pharmacy.

The proverbial “dark horse” in this is the TGA, who intend to introduce guidelines full of the buzzword language of the day, namely; “Good distribution practice”.
The intent is to bring Australia to a standard similar to the European Union, presumably so that we can be seen to be professional by maintaining the accepted status quo.
The planned guidelines are designed to protect the integrity and identity of a medicine, thus requiring distributors to no doubt improve their monitoring and checking protocols.

This all sounds like something straight out of the book of; “Spin ‘em and win ‘em” culture, written by Sir Humphrey Appleby.
The problem is that we are not members of the EU and have different problems.

These guidelines would provide a costly problem for dominant distributors, but never mind, the taxpayer will foot the bill.

The TGA, while deliberating over these matters should seriously consider whether or not any proposed guidelines will have a detrimental affect on both the automation and manual handling of DAA’s, most of which are outside the current guidelines anyway……….Hmmm, interesting.

As for size, the time has come to swap the basketball court for a table tennis table.

Yes, size does and will matter.

Garry Boyd

February 2009.

 

 


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