Script sales in decline

Independent community pharmacies are suffering a downturn in a number of key performance metrics, according to a new survey.

Findings from the Pharmacy Guild of Australia’s latest Survey of Independent Pharmacy Operations in Australia show a decline in business performance across a number of indicators.

Among the areas recording a decline in the 2014/15 financial year are a 4.59% drop in prescription sales in comparison to the 2013/14 financial year. Overall sales were down 2.51% for the last financial year, while gross margins dropped by 5.30 per cent.

With the decrease in dollar gross margin, total income dropped by 18.98%, the Guild’s executive summary of the survey reveals.

However, total expenses declined by nearly 2 per cent in dollar terms in the 2014/15 financial year,  but increased as a percentage of revenue, from 34.8 per cent to 35.3 per cent in 2014-15.

In a wider comparison, looking at the last 10 years, Industry sales grew at 2.20% compounded annual growth rate (CAGR) over this period, but had declined since 2012.

“Historically pharmacy sales were growing at the rate of 4.76% (CAGR) from 2004 to 2009, significantly higher compared to the declining -1.26% growth rate of 2010 to 2014,” the report stated.

“This reduction in revenue post 2010 is attributed to the dampening effect of Pharmaceutical Benefits Scheme (PBS) reforms introduced by the Government as a cost saving measure”.

“There is a potential threat to pharmacy viability due to declining Net Profit, as a result of Pharmaceutical Benefit Scheme reforms, increases in expenses and price competition initiated by the continued rise of discount pharmacies,” the report continues.

The article, included in the latest members-only Guild Digest has also noted trends over the last 10 years, with ongoing changes in the operating landscape of pharmacies due to growing regulatory and competitive pressure from internal and external forces.

“The community pharmacy landscape has evolved from small, independent pharmacies to more sophisticated banner groups operating in a more competitive environment,” the Digest says.

The analyses contained in the latest survey were largely based on the sample of 313 community pharmacies.

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  1. Paige

    I wonder how many discount store owners are guild members?

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