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Numark CEO: Hub-and-spoke ‘very successful’ for Rowlands but independents should find ‘different solution’

The hub-and-spoke model has “proved very successful” for Rowlands, but independents or small pharmacy chains may find an alternative solution “easier”, Numark managing director Jeremy Meader has said.

Mr Meader made his comments during a panel session on hub-and-spoke dispensing at the Pharmacy Show in Birmingham on Sunday (October 17), which was chaired by Association of Independent Multiple pharmacies (AIMp) CEO Leyla Hannbeck.

With its 450-strong branches across the UK, Rowlands “made a major investment a couple of years ago to create a centralised dispensary facility in Runcorn”, Mr Meader said.

He added: “The facility now produces virtually all repeat prescriptions for Rowlands. So, everything's produced in Runcorn and then shipped out to our Rowlands stores. And certainly, over the last couple of years, that's proved very successful.”

This accounts for 50% of all Rowland’s dispensing, Mr Meader told Pharmacy Show delegates, while the use of automated dose dispensing via its PilPouch system – which the multiple launched last year – accounts for an extra 10% of dispensing.

“It has taken a lot of strain away from the individual pharmacies. Certainly, during COVID-19, it helped the pharmacies keep operating, as dispensing is no longer done in the branch,” Mr Meader added.

“But one thing I would say, though, is that it was extremely expensive to set out. [The] hub-and-spoke [model involves] a major investment in the hub and somebody has got to fund that.”

 

Cost of automated hubs justified for large multiples

 

Mr Meader told delegates: “If you're a large multiple, maybe it does justify the cost of an automated hub. Conversely, if you’re a smaller independent or groups of independents, there may be a much easier system. There are different solutions for different types of groups.”

One potential option for smaller independent pharmacies and groups of independent pharmacies, Mr Meader said, is Numark’s Golden Tote dispensing solution, launched earlier this year and available to Numark members.

“We’ve already offered our Golden Tote solution, which is effectively prescriptions dedicated to patients in a tote that really enables pharmacists to dispense much more effectively, much faster, more safely,” he added.

“And that leaves a much greater output for pharmacy. But that doesn't involve any investment.”

 

Government response

 

Following the passing of the Medicines and Medical Devices Bill in February, the Department of Health and Social Care (DH) now has the power to change legislation to allow all community pharmacies to operate a hub-and-spoke dispensing model, regardless of whether they are part of a chain or an independent.

This also includes proposals to allow large pharmacy chains with automated hubs to charge smaller chains and independent pharmacies for “prescription assembly services”. 

But in August, the National Pharmacy Association (NPA) urged the DH to ask the Competition and Markets Authority to “look into” the hub-and-spoke dispensing model, to make sure it can exist without “undermining choice in the medicines supply chain and disadvantaging independent pharmacies”.

review published by the NPA in 2020, which looked at both the UK and international experience of hub-and-spoke dispensing, found no “demonstrable cost-benefit cases” for using the model.

 

People think hub-and-spoke is “all about big machines”

 

Jay Patel, an executive director at Day Lewis Pharmacy – who also sat on the Pharmacy Show panel – told delegates that he agrees that the hub-and-spoke dispensing model brings “dispensing efficiency”.

“It is important for us to be able to work in a world where we have access to less labour and it is also important to free us [up] to do different things,” he added.

“When you think about hub and spoke, people think about big machines in a factory somewhere else. Actually, there are levels of automation between what you do in a pharmacy and what you do at that level.”

“Hub and spoke could actually mean you have five pharmacies in an area, who will often compete with each other. So, you could actually have one of you, who has enough space in the back to support each other.

“That could be a model that works operationally and there is no fear factor or loss of control, because actually, you’re there to see it, you’re nearby and you have the ability to get involved in the decision-making,” Mr Patel added.

Lloydspharmacy CEO Toby Anderson told C+D in September 2020 that the multiple had re-evaluated the number of branches suitable for its hub-and-spoke model after finding that it only works for “some” pharmacies.

Meanwhile, pharmacy support group Avicenna launched its first automated hub in November 2020. Managing director Bharti Patel told C+D at the time that the organisation was “yet to see how this model could work from a commercial perspective for independents”.

 

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