s Cash Flow is Paramount - the Rotten Fish Problem | I2P: Information to Pharmacists - Archive
Publication Date 01/07/2014         Volume. 6 No. 6   
Information to Pharmacists

Editorial

From the desk of the editor

Welcome to the July 2014 homepage edition of i2P (Information to Pharmacists) E-Magazine.
At the commencement of 2014 i2P focused on the need for the entire profession of pharmacy and its associated industry supports to undergo a renewal and regeneration.
We are now half-way through this year and it is quite apparent that pharmacy leaders do not yet have a cohesive and clear sense of direction.
Maybe the new initiative by Woolworths to deliver clinical service through young pharmacists and nurses may sharpen their focus.
If not, community pharmacy can look forward to losing a substantial and profitable market share of the clinical services market.
Who would you blame when that happens?
But I have to admit there is some effort, even though the results are but meagre.
In this edition of i2P we focus on the need for research about community pharmacy, the lack of activity from practicing pharmacists and when some research is delivered, a disconnect appears in its interpretation and implementation.

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Newsflash Updates for July 2014

Newsflash Updates

Regular weekly updates that supplement the regular monthly homepage edition of i2P. 
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Feature Contribution

Woolworths Pharmacy - Getting One Stage Closer

Neil Johnston

It started with “tablet” computers deployed on shelves inside the retailer Coles, specifically to provide information to consumers relating to pain management and the sale of strong analgesics.
This development was reported in i2P under the title Coles Pharmacy Expansion and the Arid PGA Landscape”
In that article we reported that qualified information was a missing link that had come out of Coles market research as the reason to why it had not succeeded in dominating the pain market.
Of course, Woolworths was working on the same problem at the same time and had come up with a better solution - real people with good information.

Comments: 5

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Intensive Exposition without crossing over with a supermarket

Fiona Sartoretto Verna AIAPP

Editor's Note: The understanding of a pharmacy's presentation through the research that goes into the design of fixtures and fittings that highlight displays, is a never-ending component of pharmacy marketing.
Over the past decade, Australian pharmacy shop presentations have fallen behind in standards of excellence.
It does not take rocket science - you just have to open your eyes.
Recently, our two major supermarkets, Woolworths and Coles, have entered into the field of drug and condition information provision - right into the heartland of Australian Pharmacy.

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The sure way to drive business away

Gerald Quigley

I attended the Pregnancy, Baby and Children’s Expo in Brisbane recently.
What an eye and ear opening event that was!
Young Mums, mature Mums, partners of all ages, grandparents and friends……...many asking about health issues and seeking reassurances that they were doing the right thing.

Comments: 1

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‘Marketing Based Medicine’ – how bad is it?

Baz Bardoe

It should be the scandal of the century.
It potentially affects the health of almost everyone.
Healthcare providers and consumers alike should be up in arms. But apart from coverage in a few credible news sources the problem of ‘Marketing Based Medicine,’ as psychiatrist Dr Peter Parry terms it, hasn’t as yet generated the kind of universal outrage one might expect.

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Community Pharmacy Research - Are You Involved?

Mark Coleman

Government funding is always scarce and restricted.
If you are ever going to be a recipient of government funds you will need to fortify any application with evidence.
From a government perspective, this minimises risk.
I must admit that while I see evidence of research projects being managed by the PGA, I rarely see community pharmacists individually and actively engaged in the type of research that would further their own aims and objectives (and survival).

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Organisational Amnesia and the Lack of a Curator Inhibits Cultural Progress

Neil Johnston

Most of us leave a tremendous impact on pharmacies we work for (as proprietors, managers, contractors or employees)—in ways we’re not even aware of.
But organisational memories are often all too short, and without a central way to record that impact and capture the knowledge and individual contributions, they become lost to time.
It is ironic that technology has provided us with phenomenal tools for communication and connection, but much of it has also sped up our work lives and made knowledge and memory at work much more ephemeral.

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Academics on the payroll: the advertising you don't see

Staff Writer

This article was first published in The Conversation and was written by Wendy Lipworth, University of Sydney and Ian Kerridge, University of Sydney
In the endless drive to get people’s attention, advertising is going ‘native’, creeping in to places formerly reserved for editorial content. In this Native Advertising series we find out what it looks like, if readers can tell the difference, and more importantly, whether they care.
i2P has republished the article as it supports our own independent and ongoing investigations on how drug companies are involved in marketing-based medicine rather than evidence-based medicine.

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I’ve been thinking about admitting wrong.

Mark Neuenschwander

Editor's Note: This is an early article by Mark Neuenschwander we have republished after the soul-searching surrounding a recent Australian dispensing error involving methotrexate.
Hmm. There’s more than one way you could take that, huh? Like Someday when I get around to it (I’m not sure) I may admit that I was wrong about something. Actually, I’ve been thinking about the concept of admitting wrong. So don’t get your hopes up. No juicy confessions this month except that I wish it were easier for me to admit when I have been wrong or made a mistake.
Brian Goldman, an ER physician from Toronto, is host of the award-winning White Coat, Black Art on CBC Radio and slated to deliver the keynote at The unSUMMIT for Bedside Barcoding in Anaheim this May. His TED lecture, entitled, “Doctors make mistakes. Can we talk about it?” had already been viewed by 386,072 others before I watched it last week.

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Dispensing errors – a ripple effect of damage

Kay Dunkley - BPharm, Grad Dip Hosp Pharm, Grad Dip Health Admin, MPS, MSHPA

Most readers will be aware of recent publicity relating to dispensing errors and in particular to deaths caused by methotrexate being incorrectly packed in dose administration aids.
The Pharmacy Board of Australia (PBA), in its Communique of 13 June 2014, described a methotrexate packing error leading to the death of a patient and noted “extra vigilance is required to be exercised by pharmacists with these drugs”.
This same case was reported by A Current Affair (ACA) in its program on Friday 20 June
http://aca.ninemsn.com.au/article/8863098/prescription-drug-warning

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Take a vacation from your vocation

Harvey Mackay

Have you ever had one of those days when all you could think was, “Gosh, do I need a vacation.”
Of course you have – because all work and no play aren’t good for anyone.
A vacation doesn’t have to be two weeks on a tropical island, or even a long weekend at the beach. 
A vacation just means taking a break from your everyday activities. 
A change of pace. 
It doesn’t matter where.
Everyone needs a vacation to rejuvenate mentally and physically. 
But did you also know that you can help boost our economy by taking some days off? 
Call it your personal stimulus package.

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Explainer: what is peer review?

Staff Writer

This article was first published in the Conversation. It caught our eye because "peer review" it is one of the standards for evidence-based medicines that has also been corrupted by global pharma.
The article is republished by i2P as part of its ongoing investigation into scientific fraud and was writtenby Andre Spicer, City University London and Thomas Roulet, University of Oxford
We’ve all heard the phrase “peer review” as giving credence to research and scholarly papers, but what does it actually mean?
How does it work?
Peer review is one of the gold standards of science. It’s a process where scientists (“peers”) evaluate the quality of other scientists' work. By doing this, they aim to ensure the work is rigorous, coherent, uses past research and adds to what we already knew.
Most scientific journals, conferences and grant applications have some sort of peer review system. In most cases it is “double blind” peer review. This means evaluators do not know the author(s), and the author(s) do not know the identity of the evaluators.
The intention behind this system is to ensure evaluation is not biased.
The more prestigious the journal, conference, or grant, the more demanding will be the review process, and the more likely the rejection. This prestige is why these papers tend to be more read and more cited.

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Dentists from the dark side?

Loretta Marron OAM BSc

While dining out with an elderly friend, I noticed that he kept his false tooth plate in his shirt pocket. He had recently had seven amalgam-filled teeth removed, because he believed that their toxins were making him sick; but his new plate was uncomfortable. He had been treated by an 'holistic dentist'. Claiming to offer a "safe and healthier alternative" to conventional dentistry, are they committed to our overall health and wellbeing or are they promoting unjustified fear, unnecessarily extracting teeth and wasting our money?

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Planning for Profit in 2015 – Your key to Business Success

Chris Foster

We are now entering a new financial year and it’s a great time to reflect on last year and highlight those things that went well and those that may have impacted negatively in the pursuit of your goals.
It's also a great to spend some time re-evaluating your personal and business short, medium and long term goals in the light of events over the last year.
The achievement of your goals will in many cases be dependent on setting and aspiring to specific financial targets. It's important that recognise that many of your personal goals will require you to generate sufficient business profits to fund those aspirations

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ReWalk™ Personal Exoskeleton System Cleared by FDA for Home Use

Staff Writer

Exoskeleton leader ReWalk Robotics announced today that the U.S. Food and Drug Administration has cleared the company’s ReWalk Personal System for use at home and in the community.
ReWalk is a wearable robotic exoskeleton that provides powered hip and knee motion to enable individuals with Spinal Cord Injury (SCI) to stand upright and walk.
ReWalk, the only exoskeleton with FDA clearance via clinical studies and extensive performance testing for personal use, is now available throughout the United States.

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Attracting and Retaining Great People

Barry Urquhart

Welcome to the new financial year in Australia.
For many in business the past year has been described as a challenging period.
Adjectives are a key feature of the English language.  In the business lexicon their use can be, and often is evocative and stimulate creative images.  But they can also contribute to inexact, emotional perceptions.
Throughout the financial pages of newspapers and business magazines adjectives abound.
References to “hot” money draw attention and comment.  The recent wave of funds from Chinese investors, keen to remove their wealth from the jurisdiction and control of government regulations is creating a potential property bubble in Australia.

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Updating Your Values - Extending Your Culture

Neil Johnston

Pharmacy culture is dormant.
Being comprised of values, unless each value is continually addressed, updated or deleted, entire organisations can stagnate (or entire professions such as the pharmacy profession).
Good values offer a strong sense of security, knowing that if you operate within the boundaries of your values, you will succeed in your endeavours.

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Evidence-based medicine is broken. Why we need data and technology to fix it

Staff Writer

The following article is reprinted from The Conversation and forms up part of our library collection on evidence-based medicines.
At i2P we also believe that the current model of evidence is so fractured it will never be able to be repaired.
All that can happen is that health professionals should independently test and verify through their own investigations what evidence exists to prescribe a medicine of any potency.
Health professionals that have patients (such as pharmacists) are ideally placed to observe and record the efficacy for medicines.
All else should confine their criticisms to their evidence of the actual evidence published.
If there are holes in it then share that evidence with the rest of the world.
Otherwise, do not be in such a hurry to criticise professions that have good experience and judgement to make a good choice on behalf of their patients, simply because good evidence has not caught up with reality.

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Laropiprant is the Bad One; Niacin is/was/will always be the Good One

Staff Writer

Orthomolecular Medicine News Service, July 25, 2014
Laropiprant is the Bad One; Niacin is/was/will always be the Good One
by W. Todd Penberthy, PhD

(OMNS July 25, 2014) Niacin has been used for over 60 years in tens of thousands of patients with tremendously favorable therapeutic benefit (Carlson 2005).
In the first-person NY Times best seller, "8 Weeks to a Cure for Cholesterol," the author describes his journey from being a walking heart attack time bomb to a becoming a healthy individual.
He hails high-dose niacin as the one treatment that did more to correct his poor lipid profile than any other (Kowalski 2001).

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Culture Drive & Pharmacy Renewal

Neil Johnston

Deep within all of us we have a core set of values and beliefs that create the standards of behaviour that we align with when we set a particular direction in life.
Directions may change many times over a lifetime, but with life experiences and maturity values may increase in number or gain greater depth.
All of this is embraced under one word – “culture”.
When a business is born it will only develop if it has a sound culture, and the values that comprise that culture are initially inherent in the business founder.
A sound business culture equates to a successful business and that success is often expressed in the term “goodwill” which can be eventually translated to a dollar value.

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ReWalk™ Personal Exoskeleton System Cleared by FDA for Home Use

Staff Writer

Exoskeleton leader ReWalk Robotics announced today that the U.S. Food and Drug Administration has cleared the company’s ReWalk Personal System for use at home and in the community.
ReWalk is a wearable robotic exoskeleton that provides powered hip and knee motion to enable individuals with Spinal Cord Injury (SCI) to stand upright and walk.
ReWalk, the only exoskeleton with FDA clearance via clinical studies and extensive performance testing for personal use, is now available throughout the United States.

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Pharmacy 2014 - Pharmacy Management Conference

Neil Johnston

The brave new world of health and wellness is not the enemy of Pharmacy, it is its champion.
Australian futurist, Morris Miselowski, one of the world's leading business visionaries, will present the Opening Keynote address on Pharmacy's Future in the new Health and Wellness Landscape at 2.00pm on Wednesday July 30.
Morris believes the key to better health care could already be in your pocket, with doctors soon set to prescribe iPhone apps, instead of pills.
Technology will revolutionise the health industry - a paradigm shift from healthcare to personal wellness.
Health and wellness applications on smartphones are already big news, and are dramatically changing the way we manage our personal health and everyday wellness.

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Generation and Application of Community Pharmacy Research

Neil Johnston

Editor’s Note: We have had a number of articles in this issue relating to pharmacy research.
The PGA has conducted a number of research initiatives over the years, including one recently reported in Pharmacy News that resulted from an analysis of the QCPP Patient Questionnaire.
Pharmacy Guild president, George Tambassis, appears to have authored the article following, and there also appears to be a disconnect between the survey report and its target audience illustrated by one of the respondent comments published.
I have asked Mark Coleman to follow through, elaborate and comment:

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Cash Flow is Paramount - the Rotten Fish Problem

Neil Johnston

articles by this author...

Neil Johnston is a pharmacist who trained as a management consultant. He was the first consultant to service the pharmacy profession and commenced practice as a full time consultant in 1972, specialising in community pharmacy management, pharmacy systems, preventive medicine and the marketing of professional services. He has owned, or part-owned a total of six pharmacies during his career, and for a decade spent time both as a clinical pharmacist and Chief Pharmacist in the public hospital system. He has been editor of i2P since 2000.

In these more difficult days of pharmacy management the golden rule of business applies more than ever.
“Be profitable-be cash flow positive-and be both simultaneously”
Strangely enough it is easier to turn a profit than a sustained positive cash flow.
Cash flow volume is directly related to stock turns, which in turn directly relates to gross profit volume. And the whole is related to marketing strategy that actually sets objectives and achieves results.
The latter occurs when purchasing systems and pricing policies are in harmony and are constantly monitored.

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The metrics to manage your business in these areas are extremely important and unless pharmacy managers are willing to develop their own skills in this area, they will join the ever mounting statistics for “pharmacies under water”.  
These pharmacies are profitable, but not sufficiently cash flow mobile, thus becoming progressively impotent as opportunities disappear through an infrastructure not capable of growth, with diminishing cash flow.
Eventually, businesses in this predicament must sell up or face bankruptcy, or attract a "white knight" with deep pockets. White knights are very hard to find and for SME's may only be found in family circles.
In friendlier times, your wholesaler often filled a "white knight" role - but those days are now gone as they focus on their own long-term survival.
Quite often, a pharmacy in difficulty is only helped to the extent that it can be dismembered, with the best components going to other wholesaler customers - directly or indirectly.

Marketing guru, Seth Godin, describes part of the problem as “The Rotten Fish Problem” and says:

On the first day, all the fish at the fish stall are fresh.
Some sell, some don't.
The second day, the sold fish are replaced by newer, fresher fish. The unsold fish remains, even though it isn't so attractive.
By the third day, of course, the unsold fish is noticeably un-fresh, and it doesn't take much effort to avoid them.
At this point, part of the fishmonger's stock is demonstrably unappealing, bringing down the quality of the entire counter.
Pretty soon, of course, the drop off in business means that the owner can't afford to buy the freshest fish, even to replace his sold inventory, and the end is near.

The alternative?
On day two, discard the unsold fish.

Obvious, but difficult.
So difficult that we rarely do it.
We'd rather lower the average and see if we can get away with it instead.”


So often, through inattention, pharmacy managers take their eye off the ball and do not harvest the metrics that give them the real news about their business performance.
News is not always palatable, but herein lies the skill of those pharmacists who think they are managers –having the ability to make a decision by seeking out information from all available sources, and if necessary, asking for qualified opinion and advice, if they are incapable of arriving at a real solution to a problem.
Good pharmacy managers are not expected to have an encyclopaedic knowledge of all things pertaining to management science.
But they are expected to know how to access relevant information and make balanced decisions. Bad managers, of course, do the reverse, and eventually become paralysed and impotent, often blaming the people around them for their progressive demise.

As a simple management exercise, set up an optimum metrics “budget” and compare your current situation to the “optimum”.
Next, highlight the variances and list them in order of disparity.

This list now becomes your management task list as you document processes showing how the disparity values may be resolved to an optimum level.
It only needs to be a dot-point list with brief notes.
For each logical group of processes, select a staff person who would be the most capable to actually complete those processes, and delegate.

Delegation involves mentoring that staff person so that a transfer of knowledge and understanding occurs sufficient for that person to work independently on that problem. Delegation always involves a follow up and a refinement/review of process.
Make them accountable by establishing a secondary set of metrics to measure their effectiveness and have those metrics harvested on a regular basis.

At this point you will have started to improve your business performance and reverse the negatives that may have already intruded.
You can begin to breathe because your head is starting to be above water.

Create permanence by writing up revised or new policies and procedures so that the business culture can develop exponentially, be understood and be respected.

A basic set of primary metrics to measure pharmacy performance could be:
i. Total $ value sales
ii Prescription sales total showing the composite of script types
iii. The percentage Index of prescription sales to total sales
iv. Clinical services sales showing the composite of service type
v. Gross profit $ value
vi. Stock turn value

Assuming that you are about to appoint a professional services manager to manage the dispensary, S3 sales and clinical service consultations, the primary metrics budget may look like the following (as a percentage of total sales):

S3 Sales                  5
Clinical Services  10
Prescriptions       35
OTC sales              50

The dot point check list as to how the above budget may be achieved could look like the following:
i. S3 Sales
* Set up an in-house referral system to the clinical pharmacist.
* Locate the clinical pharmacist in a well-designed clinical “space”.
* Ensure front of shop staff are trained in how to handle patients – as distinct from customers.
* Have the clinical pharmacist linked electronically to the dispensary with a portable computer “tablet” that can generate prescriptions and labels.
* Ensure that the dispensary software can communicate with the tablet and store information on S3 prescriptions for budget comparison purposes. S3 prescriptions should represent a valid source of new prescriptions and should be appropriately priced to reflect the various skilled labour content and time spent per patient.
This could also be an opportunity to promote well-priced generic drugs that could provide the margin to cover dispensing cost inputs.

ii. Clinical Services
* Set up an appropriate private clinical space (it may be one that doubles for the S3 sales activity).
* Prepare a market plan to deliver professional programs and individual consultations focussing on quality rather than quantity.
* Create online appointment booking services as well as informational services.
* Design suitable price lists that reflect the structure of a restaurant wine list- not necessarily a service list of cheap prices. Do not commoditise this area of service.

iii. Prescription services
* PBS prescriptions may not necessarily show growth in future years, and may have to be captured from other pharmacies to sustain growth in your own pharmacy.
* Service support such as home delivery service, information service and after-hours services may win this extra business.
* Email promotional systems coupled with mobile phone apps represent a method of extending your reach.

iv. OTC Sales
* This is a significant segment of a pharmacy business that is often neglected managerially.
* Create systems for ordering accurately and able to track stock turns.
* Appoint an inventory manager or supervisor to manage this important stock investment.
* Create promotions that are “value for money” to maintain customer interest and stimulation.
* Reach consumers through Internet and email promotional programs.

As an exercise, a new primary set of metrics can be prepared by creating all operating expenses as a percentage of gross profit.
This is a more accurate set than the commonly used list of expenses as a percentage of sales and enables pharmacies of all types to be compared.

Major expense percentages should be closely monitored, particularly wages and rentals.
Rentals may be more accurately gauged by tracking “occupancy” expenses in total instead of just rent. Some landlord include certain utilities in their offering and utilities vary depending on location, so the true cost of occupying a premise needs to be monitored.

By monitoring feedback metrics from all the above activities you can tailor your sales and gross profit results depending on strength and diligence of management.

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Submitted by harrysiter on Wed, 30/04/2014 - 17:13.

At first , I thought you were talking about rotten fish but no I was wrong. The marketing guru Seth Godin has given a good title.

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