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Independent Pharmacy: RIP?

Posted on: 21 Sep 01

Summary

The key to survival will be an effective transition from medicines retailer to medicines services provider. Successive government campaigns have exhorted people to turn to their pharmacist for health
The future looks bleak for the independent pharmacist, or so we are led to believe. The growing power of the supermarkets and their own brand of pharmacy has been impinging on the traditional pharmacists role for a number of years but the recent abolition of Resale Price Maintenance has led many to sound the death knell for the independent pharmacist. This attitude is, of course, both premature and alarmist. RPM was the last legalised price fixing arrangement in Britain and it was inevitable that it would go the way of all the others. There was outcry that the abolition of price fixing in the publishing industry would spell the end for the independent book shop but this has not proved to be the case and the same will apply to pharmacy. Despite the advantages the supermarkets have, namely the ability to buy in bulk and sell cheaply, most people do not associate a trip to the supermarket with an opportunity to pick up prescriptions. The need for a bottle of cough mixture or corn plasters will rarely be sufficient incentive for people to drive to the big out of town superstores, nor will people be inclined to go straight to Sainsbury’s after a visit to the doctor. The abolition of RPM coupled with the selling power of the supermarkets will be a boon to consumers though, John Vickers, Director General of Fair Trading said, “This is excellent news for consumers, who will now benefit from lower and more competitive prices for common household medicines. Consumers will save many millions of pounds a year.” And his words were borne out almost immediately with Tesco taking 40% off the price of Anadin Extra following the ruling whilst Sainsbury’s halved the price of Seven Seas Evening Primrose Oil. In this area the independent pharmacy looks certain to lose out. However with good management and the type of retail practices employed by retailers not protected by price fixing, the more efficient independent pharmacies should survive and flourish, as should the bigger chains like Boots, Lloyds and Moss. The demographic groups cited as losers if independent pharmacies close are the very consumers likely to provide the key to keeping them afloat. The elderly, disabled and young mothers are groups that purchase heavily at pharmacies, both prescription drugs and OTC, and are also people who often lack the inclination or sometimes the ability to get to out of town stores on a regular basis. The key to survival will be an effective transition from medicines retailer to medicines services provider. Successive government campaigns have exhorted people to turn to their pharmacist for health advice and utilise an underused resource at a time when pressure on GPs and hospitals is greater than ever before. In doing this the pharmacist can become a trusted partner in healthcare and the independent pharmacist is in a far stronger position than their supermarket based peer is. The nature of supermarket pharmacies is utterly non-private, open on one whole side and subject to the watchful eyes of regular shoppers, in short an atmosphere utterly non-conducive to discussing private health matters, especially in the kind of communities where gossip is rife. British conservatism can thus play a key role in maintaining the position of the independent pharmacist. But the advice has to be good, well communicated and reliable and not all independent pharmacists are strong in this area. Inevitably some independent pharmacies will go the wall as the result of the erosion of their pseudo-monopoly, but it is perhaps the stack-it-high-and-sell-it-cheap supermarkets that should be most concerned by the changing face of pharmacy. Their strengths, as outlined above, lie in their convenience and their enormous buying power that allows them to undercut the independent pharmacist. The target market for supermarket pharmacies is likely to be in this area of OTC drugs and also as an easy place to pick up repeat prescriptions as part of the weekly shop. These, however, are two areas in which internet pharmacies see huge potential as well. With the minimal overheads resulting from having no physical presence the internet pharmacies can compete in terms of cost and repeat prescriptions are also a key area that internet pharmacies will be targeting. The only thing that could be easier than picking up your prescription as part of your shopping is having it delivered to your door. Manufacturers will also be looking to sell OTC drugs direct to the consumer and cut out the pharmacies altogether, already substantial websites have been set up for the leading cold and flu remedies and online retailing will undoubtedly be on the cards for phase II or III of these sites. So it is not, then a case of the Independent Pharmacist, RIP. Pharmacy will have to adapt like all other areas of retailing to compete against the major players and it can do this in the way that many other retailers have done, by providing a personal and trusted service. It will require efficient management and enhanced people skills but the 9000 pharmacies serving local high streets and rural communities should be in rude health for many years to come.

Mark Stacey

Last updated on: 27/08/2010 11:40:18

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