The AJP team is live blogging from the Pharmacy Guild of Australia’s APP2015: transforming pharmacy – opportunities and challenges conference.
Throw open your doors and shout to the world that your industry is at tipping point, urged Independent Senator Nick Xenophon.
He says the industry is in a crisis not of its own making and a soft target for savings. He says politicians of all sides take advantage of pharmacy sense of community service and what it does for the community.
“The change this and the previous government has made to accelerated price disclosure has to potential to tear your service to the community apart,” Xenophon told delegates.
He says the 6CPA is critical and all politicians need to know pharmacy will no longer be a “scapegoat for savings that are the worst form of false economy”.
“This may be your very last chance to stop a precious part of the very fabric of community from being torn apart.”
He said he’s heard many stories of pharmacies on the brink, whose goodwill value has been destroyed because of the stroke of a government pen; accelerated price disclosure is final the straw.
If this trajectory continues, Xenophon says many in the profession will not be there in five years’ time, especially in small country towns. The social cost of this will be incalculable, with more costs incurred due to avoidable trips to GPs and hospitals.
He says pharmacy – with the backing of the public which holds the profession in such high esteem for the service it offers often for free – has the capacity to make politicians so nervous they will be buying up pharmacy’s entire stocks of antacids.
Using the analogy of the lack of competition in the grocery market, Xenophon says if the same thing happened to pharmacy there will be community outrage.
“You need to tap into this resource and get your customers fighting for you. Every pharmacy should be a campaign office and every pharmacist and advocate for their profession.
“The people, and their loyalty and trust, are your biggest resource.”
Also, there is a huge opportunity for pharmacy to step out of its silo and advocate for healthcare reform elsewhere, he says.
Governments only see the cost to the PBS of pharmacy. Medicare costs taxpayers $19bn pa compared to $55bn for hospitals.
“I don’t quite get the reform priority,” says Xenophon.
He concedes pharmacy is beholden to the government trying to balance advocacy while not rocking the boat.
“Well, I hate to say it, but while you’ve been trying not to rock the boat, successive governments have gone and drilled great big holes in the bottom of it.
“The time for politeness, for understanding and restrained debate has passed: it’s time to get angry.”
He says government policies doesn’t just affect pharmacy, it affects people’s health.
In response, Guild executive director David Quilty backed Xenophon’s comments saying the Senator was one of a kind and had reminded the profession of its strength.
“We need to get angry and as mad as hell and rock the boat and say enough is enough,” says Quilty.
He also says the pharmacy must stand up for what is right, galvanising the support of patients who make and value 300 million visits to pharmacy every year.
By way of response to NZ Pharmacy Guild president, Ken Orr (see below), NSW Guild branch president and national councillor, Paul Sinclair discussed why the NZ model can’t simply be replicated in Australia.
“The big difference is that New Zealand has a capped spend on medicines, whereas in Australia there is no cap on medicines expenditure. Capping the spend could lead to either a shortage or delayed availability of new medicines being listed.
“For instance, because of the tender system in New Zealand, a recent incident with amoxicillin where a shard of glass was found in a bottle meant that all of the product had to be recalled. But, because all of the old stock had been used up and so there was absolutely no amoxicillin in New Zealand.”
Another difference that wouldn’t sit well with Australian pharmacists, Sinclair said, was that New Zealand doesn’t have penalty rates and so you pay the same to someone working on a Saturday as any other day of the week. “New Zealand pharmacies are only open for 50 hours a week, compared with Australian pharmacies which are open, on average, 60 hours per week. So, there are key differences that mean you can’t just take the New Zealand model and replicate it here,” Sinclair said.
As the Guild prepares for 6CPA negotiations, Sinclair said the “Government is aware of what’s being spent on pharmacy-based programs in other countries and understands that it isn’t always possible to transpose what’s being done in another country and apply it here.
“However, there are some things done elsewhere that we’d like to see considered for Australia, like the New Medicines Service in the UK where pharmacists guide patients discharged from hospital and manage their medicines adherence, because we know that first month is critical to ensure patients are re-hospitalised through medicines mis-management.
“And minor ailments treatment around short-term antibiotics is another service we’d like introduced for pharmacists here. Obviously some of this would involve down-scheduling of medicines and we’re not asking for that, rather we would have medicines available through a pharmacist-only formulary,” Sinclair said.
New Zealand Pharmacy Guild president, Ken Orr discussed the pharmacists in that country’s shift since 2012 from a dispensary-led funding model to a patient services led model. “We’ve heard from pharmacy students over the last two days that they don’t want to become battery pharmacists away in the dispensary. They want to be involved in providing services and that’s the direction we’ve been heading in in New Zealand since 2012.”
Between 2012 and 2015, New Zealand’s funding model for pharmacy went through four stages to allow community pharmacists (there are 1000 in New Zealand) to evolve from a dispensary-led model to one that encouraged and rewarded active participation in patient wellbeing.
“Just like in Australia there are other allied healthcare professionals who are waiting to provide these services, particularly nurses who would like to offer the same professional services that pharmacy is providing.
“Like in Australia, funding for the dispensary is going and our funders no longer want to pay for dispensing, they want to pay for professional services.
“But, as pharmacists we still need to offer the dispensary, and need to adapt to offer both dispensary and professional services. It’s been a challenge, but we’ve had some very good results with pharmacist-led professional services provision.”
“Technology is the great change agent,” according to Retail Doctor CEO, Brian Walker. Speaking to conference delegates about shifting from a retail model aimed at product push to a customer focus he said community pharmacy needs to be where its customers are and embrace new technology.
“Technology, and particularly mobile technology is a structural change in the way people shop and in the way retail pharmacy can engage with them,” he said.
“Retailing used to be aimed at product push, now it’s aimed at putting the customer first.” Walker suggests pharmacy should look to the data it already has in the dispensary to create a conversation with its patients and to reinvent the pharmacy shopping experience from one based around an immediate purchase to one where a conversation with the pharmacist leads to impulse purchase opportunities.
Walker warned community pharmacy from trying to compete with supermarket chains and big box discounters on margin. “You won’t win,” he said. Their model is based on volume whereas traditional pharmacy is about service and advice, “that’s your unique offering. Use it”.
Continuing Walker’s theme of customer service, community pharmacist Catherine Bronger discussed her experiences with making pharmacists available to talk with customers about S3, or pharmacist-only medicines. “We’d totally forgotten about the S3 category,” she said.
Once her team started focussing on S3s and developed protocols and training for pharmacy assistants to refer customers to a pharmacist, sales started to flow. “Even before we’d finished our PA training, we’d realised a 20% lift in S3s and by the time we’d completed the training and implemented our learnings from the Pharmacy Forward Master Class (developed by Nick Logan and sponsored by Reckitt Benkiser) we saw a 60% increase in that category,” Bronger said.
Hurdles to maximising the potential of the S3 category, she said, were pharmacy assistants which need education and training to help them engage in that category and feel comfortable in referring customers to the pharmacist for further discussion. “Another barrier was rostering, we couldn’t afford to employ more pharmacists, but we needed to make sure a pharmacist was always available for referral conversations and, so, in one shop we installed a robot to free up the pharmacists time.”
“It isn’t about flogging S3s to customers,” Bronger said. “Because we monitor sales, rather it’s about offering a solution to customers. I mean, why would we as pharmacists not be recommending a product to a customer that we would take ourselves for a particular ailment.”
Australia needs to maintain its current ownership regulations “forever,” Doug Hoey, CEO of National Community Pharmacists Association told the conference.
“I would keep it the way you have it as long as possible, forever if you can,” he said. The U.S. has 23,000 community pharmacies and 37,000 owned by chains such as CVS and Walgreens.
“I would opine that I believe that in communities that have a pharmacy owner, that owner is in the community and the owner is going to employ people in that community… That community is better for it.
“It’s better for people if they have independently owned pharmacies.”
He detailed advocacy efforts in the U.S. covering the push to attain provider status – and what pharmacy will do with it when it gets it – as well as the challenge presented by Pharmacy Benefit Managers and the enormous control these have over pricing and customer pharmacy choice.
These efforts include lobbying politicians from a grassroots small business level, encouraging pharmacists as small business owners to make themselves known to their political representatives, to high-level lobbying; to encouraging consumer support of community pharmacies (as distinct from chains) to communicating within the industry to alert pharmacists to the fact that the way they will be paid as the U.S. moves towards value-based payments is now changing, and that the profession needs to change.
The NCPA has members who still want to be paid “like it’s 1999 – it’s not going to happen”.
Its saying, he said, is for pharmacists to “get into politics or get out of pharmacy”.
“When you’re not involved, you’re not heard. When you’re not heard, the opposition does what it wants.
Day one: Today saw a cavalcade of industry heavyweights discuss the state of the pharmaceutical and community pharmacy industry, with Health Minister Sussan Ley speak to conference attendees about the Government’s commitment to community pharmacy. Minister Ley said while the Government was prepared to discuss and supported an expanded role for pharmacists it wouldn’t accept community pharmacy expanding into areas that required a GP to be involved.
Minister Sussan Ley said the Goverment is committed to building a financially sustainable health care system and that she wishes she could say pharmacy and the PBS were exempt from its need to find cost savings, “but this isn’t possible “.
This Government is committed to finding the right evidence-based solution and balance to keep the health system effective and affordable for all, she says.
“We must be prepared to make tough decisions and make tough choices,” she says, to continue to deliver a sustainable health system.
She says community pharmacy is a “true partner ” with the Government and that the Government is listening to the industry’s concerns.
The Community Pharmacy Agreements reflect that pharmacy is the most affordable health care destination in Australia.
“Community Pharmacy will continue this role in the future. In relation to the Sixth Community Pharmacy Agreement, I’m listening.”
Australia is lagging behind comparable international markets in switching medicines from prescription to pharmacy schedules, ASMI’s Mark Sargent told the conference.
“In a number of areas we’re lagging behind New Zealand and the UK,” he said. Another significant problem is being unable to communicate that a product has been switched to the consumer via advertising- for example with PPIs which as a category “really hasn’t gone as far as it has in other countries”.
Sargent previewed a slide showing how a potential advertising campaign could be used to market a product when it’s been switched from prescription-only to S3 (or pharmacist-only). Indeed, switching products from prescription to pharmacy schedules, said Sargent, was vital to creating front-of-shop opportunities for pharmacy to offset the loss of income from the dispensary.
He also stated that by giving pharmacy the opportunity to sell formerly prescription-only medicines would provide it with a competitive edge over the grocery channel which is increasingly mirroring pharmacy’s front of shop offering. Indeed, Sargent said, there’s real growth opportunity for pharmacy in the form of OTC medications which outstripped growth in prescription ‘sales’ by 7.4% in 2014.
National Pharmaceutical Services Association president Patrick Davies (also CEO of EBOS Group) spoke about the threat to the Community Service Obligation with the increasing squeeze on wholesale margins by Price Disclosure. Predicting a 25% reduction in margin, Davies said that unless the Government stepped in and guaranteed the CSO would be fully funded under the 6CPA “cost would overtake revenue putting the CSO in jeopardy”.
GMiA president Mark Crotty (vice-president at Hospira) spoke about the value of generic medicines to the industry, “generic medicines provide 42% of volume for just 19% of cost to the PBS”. One major sticking point, he said, was that Australia was lagging the rest of the world when it came to the availability in Australia of generic medicines, with only 63% of all generic medicines available in Australia.
He said, that on April 1 there will be an average price drop on prescription medicines of around 18% with some experiencing a maximum price drop of 75%. This hit to pharmacy’s bottom line, Crotty said, made it vital the Government approved more generic medicines for use in Australia.
Pharmacy Guild president, George Tambassis, spoke about the Sixth Community Pharmacy Agreement and his aims for it to see a “decoupling of the dispensing fee from the cost of product”, as well as a fair remuneration for professional services, as well as increased funding for medication management services to ensure patient’s received optimal care and attention.
Beyond this, Tambassis said the Guild’s 6CPA wishlist contained a desire for pharmacy to have expanded minor ailment treatment options with access to drugs like shot-term anti-biotics. He also emphasised the importance of wound care management and similar services offered by pharmacy and that these programs should be funded by the government to ensure the public has greater access to medical treatment they might otherwise miss out on, or have to wait a long time to receive.
Supporting, Patrick Davies’ call for the CSO to be fully funded, Tambassis said the Guild would be taking that request to the 6CPA Government negotiations and “fully supported the full funding of the CSO”.