Page 30 - Retail Pharmacy Magazine October 2020

28 BUSINESS THROUGH INNOVATION DISPENSING DISPENSE with tradition By Peter Howard. A developing situation In the mid-90s, Kodak’s market capitalisation of US$30 billion made it one of the most powerful companies in the world. The phrase ‘Kodak moment’ was as common as saying ‘selfie’ today, but despite such success, Kodak filed for bankruptcy protection in 2012. There were various reasons for such a rapid decline, including the increasing affordability of home computing. Still, the most significant was the company’s refusal to embrace change, despite being well placed to manage its impact. The problem was that while Kodak was predominantly known for its reasonably priced cameras, it was using a ‘razor and blades’ business strategy, making large margins from consumables including film, chemicals and photographic paper. When a Kodak engineer invented a digital camera in 1975, rather than forging ahead with what would become the biggest positive disruption in the photography industry, Kodak chose not to pursue it quite as vigorously as it might have done, fearing success would threaten its consumables cash cow. Of course, other companies were forging ahead and, despite Kodak’s reticence, it wasn’t long before the competition’s first digital cameras hit the market, and promptly became popular. As expected, people began to view their photographs on the computer, and Kodak’s film and paper sales declined sharply. Looking back through the lens of hindsight, it’s clear Kodak didn’t see the picture developing. Put yourself in the picture Fast-forward to 2020, and we see striking similarities between photography then and healthcare now. There is rapid technological advancement. Mobile communication and cloud-based data are enabling digital solutions to be developed at an astonishing rate, and the Covid-19 pandemic is accelerating collaboration between governments, research organisations and the private sector. We already have My Health Record, we’re seeing the change of e-prescribing, and multiple other changes are likely to become the norm, such as the current use of telehealth during Covid-19. All these are a small part of the forthcoming e-health revolution. Interestingly, the World Health Organisation defines e-health as ‘the transfer of health resources and healthcare by electronic means’. Dispensing is certainly front and centre in what will take place. From the dispensing perspective, we’ll see increased automation, including robot dispensing and packing of DAAs. Community pharmacies will be wise to learn from Kodak’s mistake and embrace the opportunities that are coming. With prescription medicines currently responsible for an estimated 66.5 per cent of the average Australian community pharmacy’s revenue, the dispensary is clearly the heart of the business – and the equivalent of Kodak’s consumables’ cash cow. Any category producing more than two-thirds of business revenue needs to be monitored and maintained. Pharmacists dedicate a significant amount of their time in managing the smooth running of the dispensary operation, and thus the health of the business. However, every minute spent ‘looking in’ is a minute that can’t be spent looking out, and there are some important things to look out for at present, not least the threat from online medicines providers. To illustrate the significance of that threat, the UK now has more than 350 online pharmacies registered, with millions of consumers now regularly using them to buy medicines and online healthcare products. The largest of those online pharmacies, Pharmacy2U, reports it delivered the medication for 300,000 patients in the past 12 months using its National Health Service prescription service. The service works similarly to Australia’s e-prescribing model, transferring e-prescriptions to nominated pharmacies directly from GP surgeries. Is the advent of e-prescribing a ‘Kodak moment’ for community pharmacy dispensing in Australia? Absolutely. Change is here. Any pharmacy expecting to maintain dispensing revenues at the current average of a third of total revenues typically seen in community pharmacies across Australia without firmly embracing e-prescribing is going to struggle against some strong competition. RETAIL PHARMACY • OCT 2020