Changing the Game and Competing on Your Terms

A recent study published by consultancy firm, Simon-Kucher & Partners, revealed that 41% of UK customers are ready to use Amazon Pharmacy when it becomes available. The study also found that just 24% of customers would continue using bricks and mortar pharmacies and only 9% said they would use a different online pharmacy.

If these figures are to be believed, they present a depressing outlook for community pharmacy. It would appear no one is safe from the Amazon juggernaut that seems to bulldoze anything in its path, including even those online businesses that have modeled themselves in Amazon’s image.

In many ways, the news of Amazon coming into pharmacy is no longer a surprise. If anything, I'm surprised they haven’t already launched. However, each time we hear this it does allow us to reflect on the current state of pharmacy and what we need to consider in order to survive.

The Pharmacy Game

I greatly admire the services that pharmacies provide and the lengths that pharmacists go to help their patients. Whether you are a contractor, employee or locum, you will be able to recount almost daily stories where you did something that gave a positive experience for your patients. In the vast majority of cases, whatever you did, wherever you did it, chances are you did it for free.

Beyond the individual stories, pharmacy businesses have used this approach to model their services. Whether it is providing medication in blister packs, home delivery, consultations and advice, it is all available free of charge.

Underlying all these efforts is the desire to grow prescription volume. Pharmacies compete with each other on customer experience in return for securing dispensing income. If one offers original packs, another will offer MDS. If one offers MAR charts, another will offer ‘coloured’ MAR charts. If one is offering next day delivery, another will offer same day delivery. And if anyone is looking to charge, there will always be someone willing to offer the same thing for nothing.

In our pursuit to help patients and sustain our businesses through the prescriptions model, we have built an industry focused on supply and measured upon loss leader add-ons. This then creates the vulnerability against the likes of Amazon who with their deep pockets and technology are masters at playing this game. They can wrap an alternative customer experience around a supply service which could wipe out the entire pharmacy sector at a stroke.

The only way to compete with Amazon is not to play the game on Amazon’s terms. In fact, we need to play a different game all together.

Automate Dispensing

The greatest asset Amazon has is its technology and automation. The greatest asset pharmacy has is its pharmacists. However, ever since time began, most pharmacists have been buried doing a process which can be done better by technology with little time to spend on front line services. There is now an urgent need for pharmacists to get out of the dispensary and spend their time being pharmacists. We now have the technology, via systems such as Titan, to automate much of the dispensing process and all but free the pharmacist from the dispensing process without compromising safety.

Front Line Services

With pharmacists freed from the dispensary, we need to rapidly rebuild our front-line image. We have a wealth of services emerging which can keep pharmacists fully occupied all day. CPCS, DMS, NMS, vaccinations, prescribing and a range of private services are just some of the paid activities pharmacists can be involved in. Aside from helping supplement income, the main purpose is to get pharmacists to become visible. This is a PR exercise like no other. We need to give patients an experience that would be missed if it was then taken away.

Subscription Models

I have long advocated the idea of a patient registration model for pharmacy. If pharmacies were paid ‘per capita’ as opposed to payment per item, I believe it would have driven different behaviours within the profession and we’d be in a different place today. Although the government and our negotiators are unlikely to change the remuneration model any time soon, pharmacies could and should establish their own subscription models chargeable to patients. Under a subscription model, it would be easier to offer a range of pharmacy services over and above the NHS contract for those willing and able to pay. Subscription models are becoming the norm in many industries enabling customer loyalty without getting into a transactional value.

App Experience

Of course pharmacy needs the technology to connect the above services together. Patient Apps are needed that connect the pharmacist to the patient and help manage repeats, dispensing, services and collection of payments. Crucially, Patient Apps build loyalty and allow a new experience which are essential if we want to prevent the loss of patients to Amazon.

Right now all the above may look daunting but much of the ground work is already in place. The technological advancements in pharmacy are happening at a faster pace now than any other time in our history. We just need to leverage the technology and redefine what pharmacy actually means beyond supply. If we do this, then it will be a game that Amazon would struggle to play, and one they certainly won’t win.

Invatech Health Ltd

442-450 Stapleton Road
Bristol
BS5 6NR

Tel: 0117 2140315
Email: info@invatechhealth.com

Invatech Health Ltd is a company registered in England and Wales. Registered number: 08972421. Registered office: 442-450 Stapleton Road, Bristol, BS5 6NR. VAT Number: 184392679.