Supplying the pharmacy demand

Last year (2007) the pharmaceutical wholesaling sector was sent spinning as a number of pharmaceutical companies changed the way they deliver their medicines to pharmacies. Many manufacturers changed to direct-to-pharmacy distribution models — using wholesalers as logistics services providers — and others reduced the number of wholesalers selling their medicines.

On top of that, wholesaling giant AAH Pharmaceuticals has been through an internal shake-up with the departure of Steve Dunn (formerly group managing director) and Ian Davidson (formerly finance director) — familiar faces within the sector.

Mark James, recently appointed group managing director of AAH Pharmaceuticals, says he is committed to reinforcing AAH’s position by strengthening its relationships with dispensing customers and suppliers.

Supply

The Office of Fair Trading, in its report on UK medicines distribution, accepted that direct-to-pharmacy distribution schemes could result in reduced standards of service to pharmacies, and thereby patients.

However, it did not call for a stop to changes within the sector. It has recommended, among other suggestions, that the Government decides on what minimum level of service the NHS is paying for when it negotiates the price of medicines under the Pharmaceutical Price Regulation Scheme, and seek the agreement of manufacturers on these standards.

“The OFT market study examined the issues extensively,” Mr James reflects, adding that there would undoubtedly be further developments within the sector in 2008. “We now await the response of the Department of Health and the Department for Business, Enterprise and Regulatory Reform. However, it is clear that change is here to stay and there will not be a return to the one-size-fits-all wholesale model.”

He believes that AAH is well placed to help develop and deliver innovative distribution models that meet the needs of particular suppliers. He draws attention to AAH’s ePOD (electronic proof of delivery) system, which electronically tracks a product from delivery to an AAH warehouse through to the pharmacist’s electronic signature.

“This not only reduces the amount of paperwork in the supply chain infinitely, but also serves to eradicate human error,” he says.

Mr James believes that AAH has a partnership ethos based upon helping suppliers and community pharmacy develop new relationships which are mutually beneficial. “Whatever the future holds,” he says, “our commitment at AAH is to provide a secure and efficient supply chain to pharmacies and patients while, at the same time, meeting the changing needs of suppliers.”

Value-adding services

“AAH will continue to provide a comprehensive range of business and professional support tools, from financial support and IT solutions through to merchandising, category management, shop refits and pharmacy staff training,” says Mr James. And he is keen to point out AAH’s portfolio of value-adding services.

The wholesaler’s range of Health Watch solutions are aimed at providing support for pharmacies investing in new areas of opportunity, such as men’s health, weight management, cholesterol testing, medicines use reviews and diabetes screening.

Mr James says that AAH is continually looking to develop new services that reinforce pharmacists’ service role and retail performance. “For example,” he says, “our new value-added nutrition service, which is part of our category management programme, offers products and merchandise for patients with food intolerances, obesity problems, low-carbohydrate requirements, immune system problems or long-term illness.”

Linking in with this programme is a new in-store booklet, which lists more than 300 specialty products that a pharmacist would not normally be able to stock because of short expiry dates — products ranging from sugar-free jam to gluten-free bread. “This reinforces the pharmacists’ health advice role by linking a range of foods to a patient’s dietary requirements,” he explains.

The profession

“At the other end of the spectrum we will continue to champion the role of pharmacy with relevant national and local stakeholders — from national politicians to local health boards and primary care trusts,” he remarks.

He is particularly keen to see that pharmacists are allowed to maximise opportunities and relationships with local service commissioners. For instance, AAH is involved in a project with the local pharmaceutical committee in Devon to promote medicines management in chronic obstructive pulmonary disease among the local community pharmacists.

Mr James is conscious of the political environment: “We constantly strive to supply services and support to our customers that meet the NHS agenda.” For example, he says that AAH was the first wholesaler to meet the requirements of NHS Connecting for Health’s IT structures.

He adds: “While we help pharmacy to lobby for further service opportunities, we will develop support tools to make those opportunities achievable.”