s For Sigma, Time is Running Out | 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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For Sigma, Time is Running Out

Peter Jackson

articles by this author...

Peter works in the pharma industry and has a specialty interest in pharmaceutical supply systems and logistics. He is based in Sydney with his wife and two children.

Siege mentality seems to have paralysed senior managers and executives at the troubled Sigma Pharmaceuticals, the Melbourne based pharmaceutical wholesaler.

On the 19th March 2010, Sigma chairman John Stocker prepared the market for a shock prior to when it was expected to release its results a week later, but then subsequently delayed until March 31, 2010.
The results are expected to show a write down of all company assets to bring them into line with reality. Share trading remains suspended since February 25, 2010.

As recently as September 2009 Sigma gained an ASIC clearance to raise money without a full cleansing statement and enquiries are being made as to what part the company auditors, Price Waterhouse Cooper, played in this clearance.
Sigma raised approximately $290 million at that time.
The longer Sigma delays in giving a full explanation of its finances, the more the market will speculate and worst-case scenarios will continue to emerge.

The market was looking for a profit of about $92 million, but this year it will lose at least $150m after some $250m in goodwill impairment charges.

Goodwill is the amount paid over the book value of the assets.
It works if you generate better profits from the assets, or big brand names are involved, but it is not an asset in the conventional sense of a cash-producing item.
Market analysts have pinpointed three “black” holes in the company’s operations, which in combination may have tipped the company into a financial crisis.

* The collapse of Allco Finance, the company involved with Sigma’s customer rewards program.

* Inflated goodwill values listed on the Sigma balance sheet, particularly the amount attributed to the purchase of Arrow Pharmaceuticals, the generic drug manufacturer originally owned by the Duchen family.

* Special deals made with some of its clients, notably Chemist Warehouse.

In mid-August 2007, the first clouds began gathering inside Allco Finance Group.
In just two days, its share price had fallen from $9.42 to $7.69.

An email was sent at 7.45am on August 16 discussing the market volatility and the company's share price, and a board meeting was convened at 4.15pm in such haste that all the directors, except for managing director David Clarke, attended by telephone.

But it was not the news of Allco's share price that would surprise some directors. Rather, it was the revelation that one of the company's most important managed funds, the Allco Principals Trust (APT), was facing margin calls.

One of APT's subsidiaries held 13 per cent of Allco's stock, and another held assets that were earmarked for the Singapore Investment Fund (SIF), whose float on the Singapore stock exchange had been delayed, but was still expected.

The market did not know too much about APT but, incredibly for such an important fund the Allco directors didn't appear to know that APT had been funding itself through taking out margin loans over Allco stock it held.

Allco subsequently collapsed in November 2008, and the fallout is still being felt by companies such as Sigma, Qantas, Audi, BMW and ANZ Bank.

Sigma's board is yet to disclose whether the drug maker has taken over responsibility for any Allco-related loans or liabilities under deals it had with the failed finance company.

The loans and liabilities run into hundreds of millions of dollars and have the potential to boost Sigma's net debt by more than $500 million.

It is believed that Sigma has been in talks with ANZ, Westpac and other banks on refinancing at least $40 million of loans that Allco provided the company.
These loans, known internally as the Gateway program, were used by Sigma to deliver ``competitive funding'' for pharmacists to expand their businesses.

The loans were not included in Sigma's last reported balance sheet because the company's board judged that Allco "bears the majority of the risk".

The Gateway loans were first disclosed in notes to the Sigma interim accounts issued on September 14 last year - the same day the company mailed information to shareholders about a $297 million capital raising.

But the fallout of Allco's collapse may be even more profound for Sigma.

Uncertainty surrounds the future accounting treatment of another "off-balance sheet'' deal between Sigma and Allco relating to the former's customer rewards program.

According to disclosures made by Elmo de Alwis in a presentation to investors on September 7, the rewards scheme owed 1500 pharmacists about $518 million worth of points.
It is one of the biggest business-to-business rewards programs in the country, with pharmacists receiving one point for every dollar they spend on Sigma products.

In 2009, the program generated $1.3 billion of sales for Sigma.

Sigma directors also classified these rewards liabilities as ``off balance sheet'' because Allco had maintained an investment in the rewards program.

There are significant business risks for Sigma if the program stopped honouring points.
If the program became unviable, Sigma would run the risk of losing the support of pharmacists who sell its products.
In notes to the interim accounts, the board acknowledged the prospect of taking over Allco's financial obligations relating to the rewards scheme and Gateway.

"In the event that Sigma purchases Allco's investments, this would trigger consolidation of the underlying trust that carries the Sigma Rewards debts and/or the trust that carries the loans receivable from individual pharmacists,'" Sigma stated in the first-half accounts.

The company told investors last year that group debt would be about $89.6 million following the capital raising.
But this would rise above $600 million if the rewards points were brought on to the balance sheet.

As a result of an earlier merger with Arrow Pharmaceuticals Sigma is expected to unveil a full-year loss of up to $280 million after acknowledging it paid too much for its 2005 merger with Arrow Pharmaceuticals and writing down its underperforming healthcare brand Herron.

Herron, which makes over-the-counter vitamins, cold and flu treatments and wellness products, has encountered slowing earnings, especially in the grocery sector, and recently closed its Brisbane plant, triggering redundancies and a picket by workers.

Sigma bought Herron for $123 million in May 2003.

As directors prepared to sign off Sigma's year to January 31 accounts long-serving chief executive Elmo de Alwis still had boardroom support to remain head of the prescription drugs manufacturer, marketer and pharmacy banner group.

However, immediately after the meeting rumours began to circulate of his intention to resign.
Shares in Sigma have been in a trading halt since February 25 and the company has informed the market it will release its delayed 2009-10 result by Wednesday 31st March 2010.

At the heart of Sigma's woes is the more than $1 billion in goodwill created by its $2.2 billion merger with generics drug company Arrow Pharmaceuticals five years ago.
Sigma could announce that it will write down roughly $320 million in goodwill flowing from the Arrow Pharmaceuticals deal. Although a non-cash item, it will wipe out Sigma's second-half profit and cause the company to report a bottom-line loss for the year to January 31, 2010. It will also probably skip its final dividend payment.

Sigma has encountered other pressures to its business including the global economic slowdown and regulatory changes that have squeezed margins on its generics drugs business. The expected loss has also forced Sigma to renegotiate more than $380 million in debt as the write-downs threaten loan covenants.

Disturbing to the pharmacy clients of Sigma was a recent revelation that larger pharmacy groups, principally Chemist Warehouse were being offered very generous terms for placing large orders for six months of requirements.

The margin on such orders was 0.5% and it was whispered that payment of these invoices could extend for 6-12 months.

When news of Sigma’s difficulties first broke, pharmacy clients surmised that this was the major cash flow problem. However, it pales into insignificance when compared to the items mentioned above.

Pharmacies that have been unable to negotiate similar terms feel doubly aggrieved because their major supplier differentiates product prices so that they are hurt in the market place and then discriminates in trading terms by having them pay up in full on the 25th of each month, or incur financial penalties.

Client anger has been growing for some time, well before Sigma’s internal problems began to be publicised. Many will march with their feet, particularly if they feel they will be further disadvantaged by having an unstable supplier.

And many of these clients are shareholders (some major) in Sigma, and their voices will be collectively felt if client imbalances in price and terms are not corrected.
This could have a flow on effect for Chemist Warehouse because any loss of financial benefits here could destabilise their own business activity - not that much sympathy would be evoked by the general pharmacy population if that happened.

While Sigma is electing to get everything out in the open in one hit, it allows internal reforms to occur and a general tightening of management processes.
However, fallout will still continue to surround Sigma for some time to come.
At the time of writing, Elmo de Alwis still seemed to have board support, but his tenure is definitely weakening.

Clients of the calibre of Chemist Warehouse will lose a large percentage of privilege that they have enjoyed, and it will cost dearly to replace it.

It seems a more level playing field is emerging in the community pharmacy market place and the advertising around “save up to 50% on your prescriptions” may need to be reviewed.

Meanwhile, all investors await the formal accounts due out on the 31 March 2010.

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