RSM Australia

Jack of all trades, master of…?

For many years the pharmacy industry has been doing battle with primarily the grocers who have been eyeing off the foot traffic that travels in and out of pharmacy and trying to divert that into their stores. There have been many suggestions that it is time to 'create competition', 'stop the rip-off' and 'do the right thing by the consumer' by sending pharmacy open because 'it is being done that way everywhere else'. The armchair advisers to government, and mainly those people are from either Main Street or are journalists beholden to Main Street, all say that we are 'better off' if we disrupt the widespread pharmacy network that currently serves the Australian population.

It was an interesting read over the summer break to read of the decision by Woolworths to bring an end to its business plans for the home improvement chain Masters. It was stated in the Australian on 18 January that, “with the Masters home improvement business losing huge amounts and an accelerating rate, Woolworths had to, and has, pulled the plug on its disastrous challenge to Wesfarmers’ Bunnings”.

The very next day on January 19 it was reported in the Sydney Morning Herald that, “the role of a butcher at Woolworths stores in the ACT and parts of New South Wales is changing to one that doesn’t chop and pack meat, a move the meat union says could lead to a permanent loss of skills. Staff butchers at the supermarket will move from behind the scenes to front of house and a job in customer service when the supermarket rolls out plans to truck in prepacked meat from a central facility.” One member of the meat industry employees union was quoted as saying that he had been told he could move to work in the produce section and replied, “I don’t want to be packing lettuce I am a tradesman”.

There are a couple of perhaps lessons or observations that can be made from these situations. Firstly, it appears it was assumed that given a competitor had been successful in a particular field that the company could go and emulate that success. One could suggest that this ignored the history of the competitor and the manner in which it had grown its presence in the diverse fields of hardware and grocery. Secondly the end game is of concern insofar as the butchers are concerned where Woolworths have brought under its roof a community business and are now looking to improve the bottom line through a logistics exercise which ultimately will have an impact on the professional standing and skills of those who are central to the success of that community business.

The pharmacy industry has for some time been firm in its view that the presence of pharmacy within grocery is undesirable from a number of aspects. Firstly the presence of professional health solutions in amongst the cigarettes and Coca-Cola hardly rings true. Secondly the necessary influence of the pharmacy professional will most likely reduce and if it goes the way of the meat section will see pharmacists in warehouse dispensing locations with no advice being given to the end customer. Core business to grocery is obviously the ability for the customer to browse, pick and pack. Attempting to inject a service aspect into the mix will most likely frustrate the desired economics of the grocery operations with very real prospects of serious impact on consumer health. Medicine is not a pick and pack product.

The present path in pharmacy to provide more professional services can only be, and excuse the pun, healthy for the profession and the public. It does place the pharmacist in his or her natural comfort zone in dealing with health issues through prescribed medicine related products and targeted services. Along the way the consumer can talk to someone who understands what they are about to consume and who can provide advice around the related condition as well as the medicine. The inherent professional knowledge of pharmacists makes them a key component of any complete healthcare solution. We continue to see their value to the community equation by their inclusion in Medicare locals and other primary health collective solutions.

A further example is the Victorian government’s recent tension to support the opening of pharmacies in targeted areas 24 hours in order to broaden the availability of health services to the public. This recent move also highlights the extent of the pharmacy network both in terms of simply the number of locations that you can find a pharmacy in Australia as well as the general availability of pharmacy to the public. Pharmacists have a large role to play in the overall health care of Australians, and I believe that this role will only be expanded to take advantage of the accessibility of pharmacy and the solutions that they bring or can bring to the public space.

Over the last 10 years the industry has been targeted by a government seeking to find savings in order to meet other demands. It can be said that all industries over the last decade have had to become more efficient in the way they deliver services and products to the consumer. Certainly pharmacy is no exception and in part this has been forced upon them through the government reforms. Despite this the industry has proceeded to focus on its reason for being, providing better health outcomes to the consumer, and continues to survive today. The 6th Community Pharmacy Agreement brings to bear a stronger focus on the delivery of services. This can only be good for the Australian consumer just as the retention of the widespread pharmacy network to support any contemplation of the proposed expansion into services is necessary in order to ensure that all Australians having access to the same level of health care. You will find pharmacists in many places around Australia where they are the central and possibly only option for health care. Readers need only go to Youtube and look up Pharmacy of the Year 2015 see the excellent work that Hannah Mann and Kimberley Pharmacy Services Group are doing in the north-west in dealing with health care for Aboriginals. It is very difficult to see any other owner of pharmacy putting in place the services necessary to reach the clientele of that pharmacy across the north-west.

And if the government allows investors in pharmacy to pick and choose where they will provide access then the Australian public will most certainly be the ones to suffer.