s Direct Distribution - the story continues to unfold | 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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News Flash

Newsflash Updates for July 2014

Newsflash Updates

Regular weekly updates that supplement the regular monthly homepage edition of i2P. 
Access and click on the title links that are illustrated

Comments: 1

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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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Direct Distribution - the story continues to unfold

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.

Editor’s Note: It was expected that other manufacturers would consider a direct distribution model after Pfizer had initiated a system that when developed, would appear to have most of the “bugs” knocked out of it.
The “who” and the “when” would then be the only unanswered questions.
i2P has covered a lot of the earlier discussion regarding this industry-changing decision, and in light of recent commentary, i2P has asked Mark Coleman to give us an update.
His comments appear below the media item in brown text published recently in Pharmacy News.

Direct distribution may spread, report says

By Chris Brooker on 29 July 2011

Analysts believe other leading pharmaceutical companies may be about to follow the Pfizer direct drug distribution model, and that pharmacy may also lose exclusive access to some S2 and S3 drugs.

According to a new report on pharmaceutical distribution by Macquarie Equities Research there was a “real risk” that other pharmaceutical manufacturers could adopt the Pfizer Direct model.

The report stated that “discussions with other big suppliers make us believe others may follow Pfizer’s lead and go direct to pharmacy.”

The analysts also said they believed there was “a risk the government may lift restrictions on certain OTC drugs (S2/S3)”.

“Our discussions… revealed that ‘direct to pharmacy’ was very much in the minds of these companies and we suspect a number of other manufacturers have already priced using DHL [the logistics company used by Pfizer in its program] as an option to go direct.”

“The infrastructure is already in place to accommodate any further supply contracts that may come its way.”

As well as atoravastatin (Lipitor), a number of other big name medicines such as olanzapine (Zyprexa), rosuvastatin (Crestor) and irbesartan (Avapro), among others, are due to come off patent in the next two years.

Preparing “to compete in this off-patent environment” was listed as one of the key factors driving the direct distribution model.

The report’s authors estimated wholesaler revenues could drop by 10 to 20 per cent per annum if this did eventuate.

Currently, the National Pharmaceutical Services Association (NPSA), which represents the major wholesalers, is conducting a campaign - entitled ‘No Monopoly on the Supply of Medicines To Your Pharmacy’ - aiming to have customers sign a petition calling for Federal Government action against the direct distribution model.

The report also forecast PBS compound annual growth of four per cent from this year to 2016, less than half the growth rate of the decade to 2010. This would also further hit wholesaler revenues, the authors said.

MarkColeman:

I have been asked to comment on recent reports of an expanded direct distribution process being foisted on pharmacy.
I believe the real issue here is control of the market direction of the sale of medicines.
Control of a market requires control of a number of the inputs, particularly distribution channel and price (which is often dependant on the distribution channel).

Pharmacy wholesalers, in a real sense, must reflect the needs of their pharmacy customers.
A one-source ordering service involving minimum order quantities coupled with a fast delivery turnaround is the model that universally suits all pharmacies.
Of course some of the larger pharmacies have always dealt direct for a segment of their purchases, but the factors driving that direct business have been that it has been more profitable to do business that way.
The same thoughts exist on the other side of the fence.
For a manufacturer to go direct the ultimate goal in doing business in that manner is to use the wholesaler margin to manipulate purchase prices for all medications into various channels.
That is more easily done under what is really a monopolistic-type decision i.e. a manufacturer does not have competition for its own branded products.
Manufacturers have always manipulated price against smaller retailers for as long as I can remember. Pharmacy has always been a trusted launch pad for new products and pharmacy has always established the retail price in a consumer’s mind.
When the channel for a medication is changed, (e.g. as in selling to a grocery supermarket), pharmacy has always been dumped and disadvantaged as to market share and price.

The fact that the Macquarie Equities research paper notes that pressure will be put on more S2/S3 products is a clear signal to me that grocery channels are once again upping the pressure for market transfer. That is not surprising given the strenuous efforts put into government lobbying for pharmacy ownership, which continues unabated.

What are the immediate implications for community pharmacy?
Well, there is no risk that the remaining items left with traditional wholesalers will become more expensive to purchase, because they will need higher margins to support the traditional infrastructure.
On the other hand, the items sold by direct distribution will also become more expensive because wholesaler rebates will not necessarily be matched in the new purchase price.
This has already been happening and will accelerate.
So pharmacy profitability depletes whatever way you look at it.

Traditional wholesalers will be forced to turn to alternative services to offset loss of gross profit. Inevitably this will involve crossing over to their own client’s turf to compete for clinical services.
Some of these services will be provided through pharmacies via a “brand” franchise, but they will eventually be provided on a direct to consumer basis, adding further to pharmacy pressures.

So how can pharmacies protect their market and profitability?

1. Form up into bulk buying groups and develop tailored regional distribution systems.
Have the buying groups source products from other countries to disrupt the manufacturer-direct distribution channels.

2. Support the wholesalers in their fight to have only CSO distribution be involved with PBS item supply. At the same time, reduce dependence on franchised marketing groups to increase your own local marketing initiatives and reduce the potential of wholesaler competition to compete in these local areas. ACCC intervention should be encouraged vigorously.

3. Value-add to the S2/S3 market. This means employing additional pharmacists as practice/clinical pharmacists. This activity is probably the most important future direction.
A large pharmacy environment broken up into smaller, co-dependent “profit centres” working synergistically together will defeat any grocery supermarket at the moment.
Some of these profit centres need to be subcontracted to minimise capital investment while at the same time, harness the initiative and enthusiasm of people able to work in a business model that is satisfying and less capital intensive to that of purchasing a full scale pharmacy.
It would also clear another industry problem – that of having surplus graduates being unemployed.

The PGA in setting up a facilitation process in respect of knocking out all the “bumps” in the Pfizer direct distribution model has really been streamlining the process for other manufacturers.
This is not strictly aligning with the commercial interests of pharmacy, but it is in the professional interests of patients. The latter outvote the former.
However, the PGA refutes this notion and in commenting on the original Macquarie equities report claims that "Macquarie do not understand pharmacy".
I think Macquarie got it right and the PGA is running a power game to suit its own purposes.
Pfizer subsidises a lot of PGA activities and there is more to lose than just wholesaler distribution.

Other manufacturers are considering “piggybacking” on to the DHL system, a company that has an enormous global reach and ideally fits in with global manufacturers’ aims and objectives.
Once becoming successful in a global sense, the local industry will be subjected to the vagaries and whims of company boards based in foreign locations.
The decisions made will not necessarily be sympathetic to Australian needs and local economies may become damaged or disrupted.
I have seen this happen in the dairy industry with local farmers becoming marginalised and it is still ongoing as mineral and gas companies take over large tracts of prime farming lands leaving a trail of disruption and destruction behind.
Pharmacy is but a smaller part of a bigger picture.

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