Pharmalife Ltd was one of the first pharmacy business-to-business e-commerce ventures, set up at the beginning of this year when the new economy stock market frenzy was at its height. Jonathan Buisson visited the company's north London offices recently to see how it was faring in the present, harsher, trading environment
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In the early months of this year, The Pharmaceutical Journal was being inundated with press releases and telephone calls giving details of the latest online venture for pharmacists as companies rushed to take part in what some saw as the new economy and others saw as the successor to the South Sea Bubble. |  Anna Maxwell, Gianpiero Celino and Musa Dhalla: Pharmalife’s senior management team |
Since then there has been a marked contraction in the new economy bubble, accompanied by an increasing number of high-profile business failures in the internet sector. How then was Pharmalife faring as the bright days of spring turn to the dull, wet days of winter?
Pharmalife is now established in a small office suite in North Harrow, London, with staff crammed into three small offices surrounded by their computers. The offices are so close to London Underground's Metropolitan line that it felt like being on the platform with trains continually rumbling by as I chatted to Mr Dhalla (chief executive) and his colleagues Mr Gianpiero Celino (business development manager) and Miss Anna Maxwell (commercial director).
What had happened since our last meeting in February?
"In February we were at the start of putting our operational plans in place; by June we had launched our community portal; now we have launched our first business product, a transfer system for excess stock, on our trading portal," Mr Dhalla said.
"The business we are in is providing services to pharmacists and pharmacies by applying new technologies appropriately. New technology has allowed smaller businesses to participate in broader trading relationships which were previously only open to multinational companies. However, this is a long-term process and you have to start somewhere."
Mr Celino explained that the software and processes which had been developed to run the stock transfer system formed part of the underlying architecture of the whole trading portal.
At the heart of the system was a tool for searching a full list of pharmaceutical products available in the United Kingdom. This list was held on the internet by other companies. Pharmacists were then able to specify the stock they had available and the price they wanted to sell at. Those wishing to purchase could see what was available. Secure credit card purchases could be made through a system hosted by the Royal Bank of Scotland and deliveries were made by Securicor Omega. Working with existing service providers was part of Pharmalife's strategy.
Pharmalife had commissioned its own software, based on existing industry standards, so that it could achieve the additional, pharmacy-specific functionality it wanted to have. Most of the development was done in India with a smaller team in the UK working on the "look and feel" of the system.
Mr Celino said that the basic system of placing information on the site and making purchases and deliveries was modular. It could be expanded to cope with other trading options. Alternatively, it could be licensed out for use by a buying group or a pharmacy chain for internal use.
Mr Dhalla said that one of Pharmalife's distinguishing features was that it had brought together an experienced management team and that most of the senior managers were pharmacists. There was a commitment to the profession and to developing the community pharmacy sector.
As well as Mr Dhalla, who has previously worked for Alliance Unichem and The Pharmaceutical Journal, and Mr Celino, who has worked for Moss Chemists and has been closely involved with many pharmacy associations, the other pharmacists on the management team are Miss Anna Maxwell, Ms Fawz Farhan and Mrs Kate Holburn. Miss Maxwell has previously worked for the homoeopathic manufacturer Nelsons and Boots the Chemists. Ms Farhan is content manager for the Pharmalife website. She was formerly technical editor at Chemist & Druggist. Mrs Holburn is commercial manager with responsibility for relationships with pharmaceutical companies. She was formerly with Unichem and Novartis.
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How much use were community pharmacists making of the internet? Miss Maxwell said that the company's sales team was seeing increasing use during its visits to pharmacies. |  Fawz Farhan (left) and Alex Young prepare material for the Pharmalife community website |
She added that the National Health Service's own intranet, NHSnet, had the potential to improve the quality of pharmacists' connections to the internet. She felt that a permanently open connection to the internet would soon be part of everyday business practice.
Mr Dhalla said: "There is a technological revolution taking place and pharmacists should not be left out."
Looking ahead, Mr Dhalla said that over the next year Pharmalife would be introducing a range of transactional services which pharmacists would be able to order from different suppliers. The rate at which they appeared would depend on adoption by pharmacists of Pharmalife as a source of news and information.
"We have not been outlandish in our claims. Other people may have promised the earth. You have to follow your strategy -long-term business success does not happen overnight."
Would the company be able to attract continuing financial support, given the current antipathy towards new economy companies?
Mr Dhalla replied that the company would raise further money as it was needed. It currently had cash to run its operations and revenues had begun to flow from the stock transfer system and other marketing activities. Financing was an ongoing process for all companies, he said.
Back in February most of the announcements about internet ventures were coming from independent community pharmacists or newly established businesses. Some of the larger players in the pharmaceutical field, such as the wholesalers and the largest pharmacy chains, were notable by their absence. Now Boots and Unichem, among others, had announced plans for e-commerce ventures. Did their entry pose a threat?
"Greater activity in any sector is a good thing, but success is not a function of throwing money at a problem," Mr Dhalla said. Success derived from having the right business proposition and building the right organisation. Pharmalife had spoken to all the major players. Competitors could become business partners, he said.
The Government's recently unveiled pharmacy plan contained a number of elements favouring the use of new technology in pharmacy, such as electronic transfer of prescriptions and tacit approval for e-pharmacy services. What did Pharmalife think about these developments?
"The pharmacy plan is profound in terms of the changes it proposes," Mr Dhalla said. "The agenda which has been set by the plan is significant, but it will take commitment from the Government and the profession to develop it. Re-engineering the profession will take time.
"I believe that pharmacists and pharmacies will continue to be the primary channel for delivering both medicines and information to patients. I do not see that changing, but many of the processes behind that will change.
"People have been predicting the demise of pharmacy for a long time. I do not share that pessimism. Pharmacy is faced with the challenge of adopting new roles alongside its dispensing role. That does not mean that pharmacists have to dispense. If pharmacists do not engage in the change process then someone else will.
"It is not unusual to be apprehensive -but we have to distinguish between apprehension and defensiveness. People want to change and Pharmalife will seek to help them move to the next step."
Mr Celino added: "We underplay the supply function in pharmacy because it works -it works well and it is efficient. The Government is concerned about the cost of medicines and this is where pharmacy's future role will come from. Supply will always be important, but extending pharmacy's role into medicines use is the next step."
Since Pharmalife was established, the market has matured rapidly. Several other companies have established electronic trading portals or websites to provide services to pharmacists, but, as yet, none of them has seemed to have had a major impact on the way in which pharmacy is practised.
Leaving Pharmalife, the impression I took away was of a small team who knew what they were talking about, working towards more realistic applications of internet technology than initially promised. They were, in their own words, a strangely old-economy new economy company.
Jonathan Buisson is on the staff of
The Pharmaceutical Journal