EDITORIAL for Monday 7 March 2016

Welcome to this week’s edition of i2P (Information to Pharmacists) E-Magazine dated Monday 7 March 2016.
This week we have developed our article mix to hopefully wake up the pharmacist community to the massive disruption that is currently on our doorstep.
We have decided to look into the immediate future at this disruptive processes that will play out for community pharmacy in a number of well-planned stages – some already under way.
Pharmacy leaders appear to be “asleep at the wheel”.

The first major disruption was the government initiative to form a committee to investigate Location Rules and Ownership rules.
The appointees to that committee comprise two members who are “anti” the existing rules and one member who is “pro”.
This committee will bring down an unfavourable ruling for community pharmacy and will disrupt the entire fabric of pharmacy. 
Unless the adverse decision is contested vigorously and prevented from being adopted by the federal government, we will all lose collectively as government satisfies its economic rationalist “mates” by handing over your valuable businesses to global predators.
i2P has consistently warned that this could happen.

The second major disruption is the $1.00 co-pay discount.
The PGA has been far too passive on this event even though its impact has been quite severe following financial losses through price transparency processes.
This has been a deliberate strategy by government to weaken the entire fabric of community pharmacy financially, as well as being a dishonest budget strategy.
Bear in mind this is only a cynical lever to be pulled at any time by government.
It is outside of the 6CPA and could be $2.00 or more next year, or really at any time.
There are no rules surrounding this issue and the motive of increased competition was only a smokescreen to cover what they really had in mind, which was global competition.
Governments have never learned that they should keep out of the way of business – they should only legislate for sensible and fair rules – something they don’t wish to deliver for pharmacy.

The third major disruption started a couple of years ago, but advanced a further step last week.
Boots, under the banner of Alliance Boots which is owned by the German company Celesio, (and recently taken over by Walgreens – the largest pharmacy chain in the US) – has actually been operating through Sigma, as an alliance partner.
The first objective in the disruptive process has been to increase the range of Boots’ branded products to condition Australian consumers and educate them to their brand awareness.
We suspect that there is a further event to be played out in that Alliance Boots will form a business partnership with Sigma.
The Walgreen parent company has created similar partnerships in the US and Europe.
We say that they will form up into a partnership because why else would Sigma potentially weaken its own established franchises with a potential future competitor?
Of course you wouldn’t, so the deal has already been signed off and Chemist Warehouse has had to trim down its extended credit so that Sigma has a stronger negotiating base.
Generally, the Alliance component of the Alliance Boots business model deals with strategic partnerships in wholesaling and distribution while the Boots component deals with pharmacies.
So our crystal ball is very strongly suggesting that when the government committee lays out the schedule for the theft of Australian pharmacies by legislative means, Boots will fill in the dates for the rollout of its pharmacies.

So the fourth major disruption is likely to be the sale of Chemist Warehouse bricks and mortar and ePharmacy businesses to Boots simultaneously with the relaxation of the rules surrounding location and ownership.
One softening moderation may be considered at that time is that the final business model may have to have 51% pharmacist controlled, like the Woolworths model developed in New Zealand.
But the element of control is illusory because the non-pharmacist component will be able to own the site and fittings of any pharmacy, and is able to cancel the lease and the partnership agreement at any time to get its way.

Pharmacist direction and control is thus illusory.

But there’s more!

The Boots group will be closely followed by the Woolworths group (already in alliance with Walmart) and the UK Lloydspharmacy group (owned by US McKesson group) and then a string of other global participants and possibly Coles as well.

But we have left the best for last, so number 5 on the “hit” parade is the sale of the PBS and Medicare to the global giants that have Patient Benefit Management (PBM) organisations as part of their groups.
And it is a given that Boots and Lloydspharmacy will arrive with an offer to buy, as will the Woolworths-Walmart alliance.

Woolworths and the recently privatised Medibank look like a potential match to develop an Australian-owned PBM, but that may be illusory if Walmart imposes its own PBM.
It depends on how the pieces are put together in the final integration of Walmart and Woolworths.

Through our own communications network i2P has learnt that the future of the PBS has almost reached a decision, according to our source.
And it all gels because the recent Boots visit to Australia had no reason to occur, other than to organise its immediate plans for a roll out.
There is no subterfuge here – just a statement of fact that accords with all of the above.
Read: The Move Towards PBS Privatisation – It is a Possibility and Could Provide a Wrecking Ball for Community Pharmacy and another aspect in the following article.
Read: Alliance Boots will Spearhead a Global Onslaught with our Goverment’s Assistance

i2P (and some others) have long felt that poor leadership has been the basic problem underlying the lack of a dynamic community pharmacy presence.
Not that we believe that global operators are a better option, even though they may look better to a government wanting to opt out of the future burden of financing and managing an ageing population problem that will become worse for each successive year.
Australian pharmacy culture has essentially been static for the past twenty years, with creativity and innovation deliberately stifled by leadership organisations promoting unsuccessful systems and processes from the “top down” instead of the “bottom up”.
However, there is one current exception and that is Alison Roberts’ PSA Health Destination Pharmacy Project – a unique “bottom-up” program.

i2P’s sentimental preference is for an innovative independent community pharmacy business model, but it seems that may not be possible unless you locate in an isolated “pocket” where competition is low.
However, we believe it is possible with agile management and creatively building the  brand for this model plus using the Internet and good strategies to disrupt the competition – it is all possible.
Some specialist retailers have managed to remain relatively independent and we report Rebecca Minkoff fashion stores as an example:
Read: RFID Is a Basic Step Towards Specialist Goods & Services Success

Gerald Quigley is back and again reports on the misreporting by mainstream media in respect of complementary medicines.
i2P believes that this type of media reporting is designed to weaken the image of community pharmacists so that they become more politically pliable.
The linkage between mainstream media, Big Pharma’s and corrupt politicians is ever present.
They also exist within the controllers of these major global pharmacy conglomerates now set to invade Australia – but mainstream media will likely abandon its criticisms when these big players arrive, because they are big advertisers as well.
Read: Diluting the debate

Barry Urquhart is also back with a range of perspectives involving politics, management and marketing.
Barry is one of Australia’s thought leaders and he always provides an interesting viewpoint.
Read, learn and inwardly digest his thoughts for this week.
Read: Marketing Focus – Essays on Management & Marketing

Charisma is a characteristic that we all aspire to have.
This quality creates a natural advantage in that everybody likes you and wants to be associated with you.
Read Harvey Mackay’s thought on how you might be able to improve on this quality of charisma.
Read: Charisma breeds success

Mainstream medical journals do not necessarily abide by their own rules or Codes of Conduct.
Elizabeth Hart, a writer concerned about safe vaccination, discusses her personal problem encountered with the British Medical Journal (BMJ).
Read: BMJ Suppresses Information – Informant Responds

And we finish up this edition with media releases from pharmacy leadership organisations.

PSA –  PSA Media Releases – 1. Pharmacists Support eHealth 2. Medical Advisory Committee – First Pharmacist Appointed 3. First Public Health Boost – Pharmacist Vaccinations
NPS – NPS Media Releases – Depression – Looking at all approaches

We hope that you find this week’s i2P an interesting read and we ask that you keep updated with developing issues surrounding pharmacy location and ownership rules and share them with your colleagues.
The more awareness generated the better these issues are managed and fought.
Also, please post any “Letters to the Editor” responses in the panel below.

Neil Johnston
Editor – i2P E-Magazine
Monday 07/03/16.

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