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Over recent decades, the independent pharmacy sector, or “pharmacist-owned
pharmacy” as I prefer to call it, has shown symptoms of a worrying
decline. Independent ownership had reduced from two thirds of all contractors
in 1991 to less than 50 per cent by 2002. If this trend continues, by
2011 independents will represent less than a third of contractors.
Currently, independents’ marketplace is of a size sufficient for
three national wholesalers to base large and successful businesses upon
it. The sector also sustains numerous regional wholesalers and so called “short-liners”.
All are competing for independents’ business. Continued significant
loss from the independent sector will likely increase the number of pharmacies
in large chains, which will inevitably lead to considerable consolidation — and
reduced competition — in pharmaceutical wholesaling.
Am I against multiples? No, I am not. Multiples recognise that independents
trade in ways and in places that they could not because it would not
be economical for them to do so. Moreover the discount scale in the new
contract is based upon “a single independent”. If it were
to be based upon multiple buying power, which could happen if the independent
sector diminished substantially, then it would look hugely different
and all sides would suffer. This would lead to a least-cost, lowest-common-denominator
marketplace that would benefit no one. So the survival of a strong and
vibrant independent sector is important for a wide range of stakeholders,
including pharmacists, the pharmaceutical industry, the Government and,
most importantly, patients and consumers.
From pharmacists’ viewpoint, the rich variety of pharmacy services
that the public enjoys is mirrored in their own diversity of employment
opportunity. Independent pharmacy ownership remains an attractive option
but too few pharmacists even consider it. Today’s young pharmacists
know little about pharmacy ownership. They mistakenly believe that it
is beyond their reach. This lack of “ownership” in its broadest
sense may go some way towards explaining the “locum” mentality
of today’s young practitioners.
The pharmaceutical industry might favour a small number of large groups
because it is simpler to have a head-office relationship with a single
group of 1,000 pharmacies than to work with 1,000 independents. But let
us consider the relationship between supplier power (the industry) and
purchaser power (large groups). Large groups exact a high price in terms
of discounts and service delivery in return for the high economic power
they wield. It is no more in the pharmaceutical industry’s interests
to see massive consolidation in pharmacy than it has been in the food
industry’s interests to see their marketplace dominated by multiple
grocers.
The Government approves of competition. At its most basic, there is competition
among pharmacies to dispense prescriptions. One impact of the new community
pharmacy contract will be renewed competition to provide extended role
services. So it cannot be in the Government’s interest to see virtual
monopolies in health care.
“Competition” and “choice” are the latest watchwords
of the Government on behalf of patients and consumers. Massive consolidation
can ultimately only reduce competition, choice and access. Today, the
public has a rich choice of how they access community pharmacy services.
In most places there is a choice between, say, a Boots pharmacy, a supermarket
pharmacy, a national chain and an independent. Each offers a different
style and each may have a particular appeal to consumers at different
stages of their lives. For the most dependent consumers (eg, young mothers
and the elderly) the continuity of service, commitment and local knowledge
of an independent may be the most attractive option. Independent pharmacies
often operate in poorer or more difficult areas, serving populations
of low economic power and high social need. They tend to serve more vulnerable
populations, with higher levels of the health inequality that the Government
is trying to target. It cannot be in the public interest for this choice
to be lost.
Why did we form a new federation?
So, do we really need the new Independent Pharmacy Federation (PJ,
8 October, p432)? After all, independents are well-represented on all
the national pharmacy bodies. However there is a profound difference
between the well-resourced and carefully co-ordinated deliberations
of those representatives who pursue their sectoral corporate interests
and the rest. That it was considered necessary to form
the Association of Independent Multiples Pharmacies to represent
their interests (PJ,
19 January 2002, p45) only highlights the need for independents to
act just as cohesively or face an uncertain future.
The new community pharmacy contract, which places increasing emphasis
upon clinical skills, local relationships and professional accessibility,
should be good for the independent sector. Yet there are significant
challenges to be overcome and independents will need to be better prepared
and much more organised if they are to lobby effectively for change.
This is just one example of how the IFP will prove invaluable.
Under the banner of the IFP (see www.irxf.co.uk),
all stakeholders should come together and, with a little imagination,
some goodwill and a joint
working towards a common agenda, the following could be achieved: Young pharmacists It is vital we change the negative perception of the
younger generation of pharmacists that ownership is an unattainable prospect,
or that it is merely “shopkeeping” and “unprofessional”.
After all, GPs, too, are independent NHS contractors. They argue that
they are much better placed to look after their practice populations
and be patient advocates precisely because their independent status makes
them somewhat at arm’s length from the DoH. Independent pharmacy
has the same benefits. Wholesalers and trading groups could help bridge
young pharmacists’ knowledge gap by providing seminars aimed at
potential pharmacy owners. Practical experience and guidance could be
provided by established independent proprietor pharmacists.
Students We must work with schools of pharmacy to show students that
independent ownership is not only a viable option but is also professionally
and financially rewarding.
Locums There are currently 8,000 pharmacy locums, many of whom choose
to work as such because none of the employment options is attractive.
Hence ownership of the profession “by the profession” suffers
and with it professional commitment. The IPF could address this.
Government Independents have local knowledge, close working relationships
with patients and the primary care team and tend to remain in one place
long-term. This should make them well placed to gain maximum benefit
from the new contract and deliver much for patients of behalf of primary
care commissioners. In return, the DoH should help create an environment
which considers the impact of contractual changes and policy development
upon the independent sector.
Royal Pharmaceutical Society The Society cannot represent individuals.
However, its Community
Pharmacists Group could critically examine Society
policy as it affects the independent sector. The Society also has a role
in promoting pharmacy as a career and it could bang the drum a lot harder
about the attractions of independent practice.
To conclude, it is in the interests of a wide range of stakeholders
to arrest the decline in pharmacist-owned pharmacies. The Independent
Pharmacy Federation will provide strategic analysis and a representative
voice. Currently, both are lacking. |
The
Pharmaceutical Journal