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Three challenges facing community pharmacies in the next five years

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Community pharmacy encompasses a huge variety of issues, with significant variation in approaches from country to country.
What would I say are the three biggest issues facing pharmacies over the coming 5 years?

Published in: Health & Medicine
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Three challenges facing community pharmacies in the next five years

  1. 1. Three challenges facing the pharmacy in the next five years j.acostapharm@gmail.com @JaimeAcosta_ /jaimeacostagomez
  2. 2. Three challenges facing the pharmacy in the next five years Can the pharmacy industry still afford a remuneration system based heavily on commercial mark-ups? Can pharmacies survive without integrating large molecules into their operations, basing their business in small molecules only? Is there room for pharmacies in electronic commerce and e- health? Will pharmacies continue their important place in the heart of communities?
  3. 3. The need to contain health spending has forced those paying for medicines (public administrators, insurers, patients) to achieve a reduction in rates of growth or even a decrease in price and mark-up in medicines dispensed in pharmacies, through various mechanisms. Because pharmacies depend largely on volume of products sold and mark-ups for financial gain (and discounts from manufacturers and wholesalers in countries where this is legal, which have also decreased), the profitability of pharmacies has been significantly affected. By this pressure, business management has gained prominence in pharmacies, with pharmacists maximizing the economic performance of their companies as much as possible.
  4. 4. Thus the pharmacy: 1. Has strengthened its position in the healthcare business, moving from the treatment of disease as the sole main activity and incorporating many new professional activities as diverse as vaccination, screening for diseases, promoting healthy habits and treating addiction or substance abuse. 2. The business side has progressively gained importance not only behind the counter, but also more visibly on the shelves, especially with better management of categories. However, the core business remains the traditional distribution of nonprescription and prescription patient medications which is still heavily based on mark-up in many countries, although in some countries this is toned down with a fixed amount payment per item dispensed (Germany and Norway, for example). This mark-up does not recognize the services that community pharmacists can provide to society, and it is vital to implement payment systems that recognize the complexity, capabilities and time invested, as well as the results obtained for users of pharmacies.
  5. 5. Different compensation systems other than mark-up from dispensing would not only decrease dependence on prices, mark-ups and discounts, but would also…  Align pharmacists with the core objectives of health systems through essential business incentives.  Promote activities of higher-value, complexity and recognition for pharmacists rather than merely the informed dispensing of medications.  Enhance the purely commercial image that the pharmacy can give, both to public opinion and other agents (administration, insurance companies, and health care professionals).  Encourage the registration of actions that pharmacists perform which is essential to prove their professional value.  Promote professional relationship and contact with other health professionals through more complex activities that require their interaction. Can the pharmacy industry still afford a remuneration system based heavily on commercial mark-ups?
  6. 6. Pharmaceutical R & D-based innovation has shifted to having a greater focus on specialty products, which are products that will increase expenditure on medicines in the short and medium term, especially in developed markets. Growth will take place in the areas of oncology, auto-immune, anti-viral and immunosuppressant therapies. The number of new large molecular entities that will be launched is expected to remain at levels higher than in the past decade, which is aided by an accelerated regulatory review. Community pharmacies generally dispense small molecule products and these faced a loss of exclusivity in developed markets totalling $154Bn. Though savings from small molecule patent expiries will be dramatically reduced, pharmacies cannot relinquish the large molecule market that is currently restricted to other channels (especially hospitals) by their high budget impact and complexity of use These new drugs would not increase the business for pharmacies, but they would also facilitate the adoption of new services and new products throughout, in addition to an approach to patients completely different to those found in today’s pharmacies. Can pharmacies survive without integrating large molecules into their operations, basing their business in small molecules only?
  7. 7. While big players in the pharmacy sector are increasing in size and reaching relevant agreements with wholesalers (Walgreen's, Alliance Boots, AmerisourceBergen, McKesson, Celesio, CVS, Cardinal Health) large electronic traders are gaining market share and positioning in the health and welfare sector and prescription and non-prescription medications (AliBaba). At the same time, the development of e-commerce also allows direct manufacturer to end customer access to products online, without the traditional intermediaries (wholesalers and pharmacies). Meanwhile, new developments in digital health (apps, wearables, telemedicine, Internet of Things (IoT)), require positioning in digital healthcare platforms which have the potential to broadly affect the use of medicines and their role in patient care.
  8. 8. This means that the traditional logistical capacity, which gave a competitive advantage to the fragmented community pharmacy sector against larger players, will lose its relevance. Now it is possible to reach the customer efficiently, reliably and securely. Pharmacies compete in an electronic ecosystem where the shopping experience is very different from those traditions and customs in their facilities, and the developments in new technologies that are building new circuits in the healthcare network are generally alien to them. Is there room for pharmacies in electronic commerce and e-health? Will pharmacies continue their important place in the heart of communities?
  9. 9. j.acostapharm@gmail.com @JaimeAcosta_ /jaimeacostagomez Recently included in the Top 10 Pharmacist Influencers on Social Media ranking in Spain.

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