2020, A year of change…
2020 is set to be a remarkable year for Pharmacy and the changes the new year brings along with it. The Australian pharmacy industry is in a state of change, evidenced by recent news related to; 7-Eleven convenience stores are keen to enter the market[1], Amazon Australia files trademark for pharmacy[2] , rural pharmacy closures may become more common if a rural Pharmacy Viability Package is not included in the Seventh Community Pharmacy Agreement[3], and the introduction of apps to the industry. This stream of news brings into focus underlying changes in the pharmacy industry. Further to the changing landscape of the pharmaceutical industry is Health Minister Greg Hunt who is undertaking negotiations for a new five-year Community Pharmacy Agreement (7CPA) to govern the sector from mid-2020. At this stage he is considering to relax strict rules that currently limit who can own a pharmacy, what services they can offer, and how medicines are priced.
Consequently, by relaxing pharmaceutical restrictions, the Australasian Association of Convenience (AAC) Stores has backed calls to reduce the strict rules governing pharmacies, which would enable Australians to buy medicines at its 6,500 stores, including 7-Eleven and Caltex. CEO of AAC, Jeff Rogut said, “prescription medications were high on the list of additional goods and services customers wanted to see in their outlets. As society and lifestyles evolve, customer needs are changing and we must seek out opportunities to take convenience stores to the next level”. In Japan, some ‘Lawson’ conveniences stores have a dispensing pharmacy and provide professional services, including acceptance of prescriptions, provision of health consultation services by pharmacists, and sales of OTC medicines[4]. Convenience stores are often open 24 hours a day and are able to meet the consumers’ needs in one convenient location.
Additionally, Amazon Australia has filed for a trademark called ‘Amazon Pharmacy’. This may be similar to Amazon’s existing pharmacy retail service in the US, which begun last year through a $1.35 billion acquisition of online pharmacy startup PillPack[5]. Other operators have signaled their interest to collaborate with Amazon to provide online services, with the chief executive of pharmaceutical wholesaler Sigma, Mark Hooper, saying in 2018 he would rather work with the retail giant than fight it[6].
During Australia’s devastating bushfires, many pharmacies were unable to open due to dangerous conditions. Some Pharmacies still operated to serve the community, many giving out free masks or medications to their community. Pharmacist and owner Raj Gupta captured the true meaning of community pharmacy as he had lost his home in the fires and was staying in emergency housing in Batemans Bay. However, he still opened his pharmacy every day noting; “The concern at this time is to make sure people can be helped, that we can fulfil their requests.”[7]
In addition to this, Australia’s rural Pharmacies are struggling further as we see more closures. For example Mount Magnet La Croix Pharmacy in Western Australia recently closed citing the toughened conditions. Many more pharmacies may continue to close if a Rural Pharmacy Viability Package is not included in the Seventh Community Pharmacy Agreement (7CPA), the Rural Pharmacy as “There is inadequate recognition of the higher per-patient dispensing and non-dispensing workload faced by rural pharmacies, soaring labour costs, inadequate recognition of patient-centric collaborative care already being provided by rural pharmacies, funding models that undermine the professional role and commercial viability of rural community pharmacies.”[8]
Key Opportunities for 2020:
1. Exports
Pharmaceutical exports have gone up 102%[9]. A weak Australian dollar in 2018 saw exports of medical and pharmaceutical products double across Australia in 2018[10].
2. Technological change
The rise of e-health services will enable pharmacists to provide health services on demand.
3. Ageing population
The industry is likely benefit from Australia’s ageing population and increasing health consciousness through an increase in prescriptions as well as a steady stream of health and wellness products.
4. Mobile Health Opportunities:
Development of QR codes and e- prescriptions and the ability to be current and technological advanced.
5. Virtual Healthcare
With more people relying heavily on technology, virtual healthcare is expected to be one of the most significant pharmacy trends for this year. Already seen through dentistry and through virtual doctor consultation. For example, in November 2019, Moodie’s Pharmacy in Bathurst trialed virtual dentistry, read the full article here: https://ajp.com.au/news/dental-service-trialled-in-pharmacy/
5. Opportunities to diversify and expand:
In New Zealand Woolworths has begun offering free scripts to pensioners to get them in the doors of its Countdown supermarkets, with some chemists following suit.
The fluctuating Pharmacy landscape is evolving and has new opportunities for 2020. If you would like assistance to stay on top of these changes and wish to have a confidential discussion about your Pharmacy give us a call on: 02 9248 2600
[1] https://www.smh.com.au/politics/federal/we-re-not-selling-fruit-and-veg-here-why-pharmacists-doctors-and-retailers-are-fighting-over-your-medicines-20190829-p52lz1.html
[2] https://www.insideretail.com.au/news/amazon-australia-files-trademark-for-pharmacy-offer-202001
[3] https://pharmacydaily.com.au/news/rural-pharmacy-closures-just-starting/87570
[4] https://ajp.com.au/news/do-customers-want-convenience-store-pharmacies/
[5] https://www.smh.com.au/business/companies/amazon-australia-signals-pharmacy-foray-with-new-trademark-application-20200114-p53rc2.html
[6] https://www.smh.com.au/business/companies/amazon-australia-signals-pharmacy-foray-with-new-trademark-application-20200114-p53rc2.html
[7] https://www.sbs.com.au/news/amid-the-ruins-of-the-nsw-bushfires-this-pharmacist-is-keeping-his-doors-open?fbclid=IwAR3HhTWJ5E_xzTgmX_0WOlY7GMTgjP1tljsdRm4iqHlADXQJkMUphZ7Rpr8
[8] https://pharmacydaily.com.au/news/rural-pharmacy-closures-just-starting/87570
[9] https://www.finder.com.au/pharmaceuticals-import-export-guide
[10] https://www.bankwest.com.au/content/dam/bankwest/documents/business/insights/focus-on-pharmacy-report-2019.pdf