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Pharmacy2U: Opponents are maintaining multiples’ dominance

Online prescription business Pharmacy2U is accusing its critics of stifling innovation to protect their own commercial interests

The online prescription business is accusing its critics of stifling innovation to protect their own commercial interests, arguing that it is "committed to modernising pharmacy"

EXCLUSIVE

Online prescription business Pharmacy2U has hit back at opponents for stifling innovation to protect their own commercial interests.


Pharmacy2U argued that Pharmacy Voice's concerns over the online pharmacy's latest venture with GPs were fuelled by a "vested interest in maintaining the status quo", in a letter sent to the Department of Health (DH) on Friday (July 4).


The comments came in response to a letter written by Pharmacy Voice, PSNC and the BMA to the DH about prescription direction on Thursday (July 3). In the joint letter, the three bodies pointed to Pharmacy2U's scheme, which offers GPs a share in a repeat prescription service, as an example of the dangers in the market.


Pharmacy2U managing director Daniel Lee said - in a letter copied to C+D - that he was disappointed to see PSNC and the BMA being "drawn into" the debate. Commercial arrangements between GPs and pharmacists were "nothing new", he stressed, and the online pharmacy's GP-ownership model was based on patient choice rather than prescription direction.

Mr Lee accused Pharmacy Voice of acting simply to protect its own commercial interests. By stifling innovation, the body was maintaining the dominance of multiples in the community pharmacy market, he said.


"Pharmacy should not be a monopoly and competitive threats have to be responded to with improved services and a more patient-centred approach to treat the unknowing unwell," Mr Lee argued. "Pharmacy has been for too long sleepwalking from a contractor[-led] to corporate-led profession, with reducing income and job satisfaction."


Pharmacy2U was "committed to modernising pharmacy" and continued to provide excellent care to its patients, he stressed. Instead of concentrating on Pharmacy2U, Mr Lee urged the DH to look at practices in the wider pharmacy market, which included "very spurious" schemes linking rent for surgery pharmacies to prescription income.


Pharmacy2U previously came under fire for its direct marketing to patients, which was branded misleading by pharmacists and GPs, in August.



Do you agree with Pharmacy2U that the pharmacy bodies' opposition is stifling innovation?

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29 Comments

A.S. Singh, Community pharmacist

Oh the irony - are pharmacy2U stifling innovation to protect THEIR commercial interests? Repeat item ordering is not the future!

MESUT OZIL,

There seems to be a lot of passion about this subject.....and as the BT advert goes..It is good to talk.....

I think maybe it is time to just open the market and let market forces dictate the winners and losers unless someone can come up with a better idea. The problem with the current model is that in many towns/cities you have just Lloyds/boots and this does NOT drive up standards or increase competition. I have heard of many cases where the multiple has had to up its game when a new 100hr pharmacy opened by employing del drivers, increasing stock, ordering scripts on time and employing full time managers to have some consistency.

MESUT OZIL,

Boots have started a hub/scope model DOWN SOUTH......i

London Locum, Locum pharmacist

Wake up everybody. The days of empptying NHS coffers for relatively little effort is over.

N O, Pharmaceutical Adviser

First of all, let us all accept the fact that irrespective of what kind (indi, multiple, 100hr or internet) Pharmacy, we are all part of a BUSINESS first everything else comes next. No one is running a charity show, including hospital pharmacies (funded directly by NHS trusts)

Yes of course the basic principle, on which our business stands on, is patient care. Hence, patient care cannot be compromised by anyone !!

What does Pharmacy2u provide as an innovation?

1. Taking order online from patients -- Which pharmacy does not offer this service?

2. Collecting prescriptions from surgery -- Again, Which pharmacy does not offer this service?

3. Delivering the medicines to the patients homes -- Which pharmacy does not offer this service?

So Mr. Lee, could you be more innovative in telling us what exactly is Innovative in your approach, other than doing direct marketing and getting prescriptions diverted through the offers you give to the GPs.

Please note there is a difference in GPs being part of a business where the Pharmacy is situated within the surgery or within the complex where surgery exists and the kind of contract you are offering.

There is no justification in saying the GPs are not directing (influencing) prescriptions to your firm, as it is clear that you don't exist materially anywhere near the surgeries. And don't give the B*** S*** that the GPs are offering a choice to the patients, as it is not a choice but an inducement for a personal gain.

MESUT OZIL,

Whats the difference between giving a surgery rent to locate a pharmacy within their premises and giving GPs a share in a repeat prescription service?

How does one endanger the market and another one doesn't?

Locating a Pharmacy within a surgery is paramount to prescription directing...

The hypocrisy is pathetic............
Answers on a postcard to Er Ds.....

Simon Stevenson, Non healthcare professional

What utter nonsense!

GP's quite often do not own the freehold to their surgeries, with the rent paid by a Health Centre pharmacy going to large property development companies.

Giving GP's a share of the pharmacy (whether that's the Pharmacy2U model or the traditional model which a lot of the multiples have followed) endangers the market and could have an influence on prescription direction whereas paying rent to be in a surgery all depends on who the freeholder is.

Marc Borson, Community pharmacist

distance selling is a bad business model for pharmacy, the cost to distribute each prescription is pounds because of royal mail or courier fees, anywhere from £3.00 to £6.00 for a straight forward delivery. If say an average pharmacy does 6000 ipm, that 72,000 ipy. Assume an establishment cost of £20k pa for a bricks and mortar operation thats £0.33 per item. P2U will also have establishment which differ from bricks and mortar and are a lot higher. such as marketing, IT infrastructure and maintenance as well as large estate costs for their warehouses. The distribution costs alone for 72000 items at the low end of £3 is £216000. We all know that we do not even make that at gross profit on 6k imp.

They are desperate to increase market share so do not mind diluting shares to incentivise prescription direction.

All this costs money and profit. From public records they have never shown profit and seem to be funded by cash from investors and I imagine EMIS. It is difficult to see what earnings are made but they are relatively low.

Investors should approach this business carefully we have seen Pharmacy Plus disappear within days of supplies being removed.

In fact some GPs refuse to send prescription to distance providers such as P2U for anything that is controlled, narcotic or used in mental health. I recall one case of a patient getting several antipsycotics mailed to him by P2U. there was very little monitoring or support which you would get at some degree form community based pharmacies as we all know. Ask your self is it really appropriate for opiates to be mailed through the front door. Are we not legally appointed custodians of hazardous substances.

In summary P2U and internet pharmacies in general have reached the end of the proliferation stage some of the moves being made suggest desperation and may be a signal that the company is in distress. If you are a GP thinking of this, there will be no dividend from this company as they have never declared profit. Carry on treating patients, there are many horror stories of Gps getting involved in Pharmacies.

Brian Austen, Senior Management

Pharmacy2U accounts for 2013 show:
Cash £1,253,000
Net Worth £981,000
Total Current Liabilities £3,688,000
Total Current Assets £3,919,000
This is a significant deterioration from 2012 and preceding years but this might be explained by; on the good side, investment in RX Systems and EMIS, they are major shareholders; on the bad side, other pharmacy companies taking some of their market share, be it large multiples providing order and collect services at the local Boots, Lloyds,etc or many new internet pharmacies. It is certainly becoming a saturated market.

Simon Stevenson, Non healthcare professional

As per the last filed accounts, Pharmacy2U Ltd had cash at bank of £1.25m and a net worth of £1m.

http://companycheck.co.uk/company/03802593/PHARMACY2U-LIMITED

N O, Pharmaceutical Adviser

"""""As per the last filed accounts, Pharmacy2U Ltd had cash at bank of £1.25m and a net worth of £1m."""""

Does it matter ?? I was told by a flying bird that they dispensed some 38,000 + items in March 2014. Now, only if we had a cost incurred in delivery per item it would be possible to see if they are making any profits at all, for the risk involved.

Marc Borson, Community pharmacist

that cash could have come from anywhere such as investors. If GPs take a sure will they not expect a dividend?

MESUT OZIL,

So basically you are in fact paying 'someone' whether it is a GP or development company to have prime location in a surgery?

There is no difference....as locating within a surgery will result in prescription direction ESP acute ones...

Simon Stevenson, Non healthcare professional

Yes pharmacies within surgeries or Health Centres will be paying rent to someone - the freeholder.

This may be the GP's, the PCT, an individual landlord, a property development company, a multinational PLC etc.

MESUT OZIL,

SO THERE IS NO DIFFERENCE.....................

Like london locum said....the days where contractors had it easy are over.....

Like lidl and aldi....The big boys are [email protected] their pants...competition In Pharmacy is the way forward...accept it, or sell up.....

MESUT OZIL,

There was a lead article on the BBC on Monday about the financial black hole the NHS faces as demands soars with an aging and growing population of around £20 billion.

Sooner or later the market will re-open as majority of pharmacies esp the multiples are at breaking point and for purely health and safety issues, they should allow others to open to ease the burden placed on staff ...:)

Er Ds, Superintendent

mesit how do you get 40,000 items a month? are you sure you are a contractor???? stick to adding up your locum fees lol

MESUT OZIL,

Why not just open uup the market and let market forces dictate....

Er Ds would have a panic attack if it did

LOL back at ya

MESUT OZIL,

I know where you can stick it....

MESUT OZIL,

I think the powers to be should have included internet Pharmacies when it halted future applications....

Now we have contractors worried as online Pharmacies can theoretically open in their back yard.......

I hope you have your hands in other pies...........

Mike Hewitson, Superintendent Pharmacist

Modernising pharmacy! If anything the distance selling model takes us backwards - it is purely transactional and concerned with volume & supply.

MESUT OZIL,

Modernising pharmacy! If anything the distance selling model takes us backwards - it is purely transactional and concerned with volume & supply.

How is that different to a standard Pharmacy?

if nothing else, "Pharmacy2U" just sounds so tacky and dated. Its not a professional sounding brand at all. I'd like to think the future of pharmacy is not determined by faddy fashions.

Though Mr Lee does have one thing right: ""Pharmacy has been for too long sleepwalking from a contractor[-led] to corporate-led profession, with reducing income and job satisfaction.""

London Locum, Locum pharmacist

Let the games begin....

Stephen Thomas, Community pharmacist

Mr. Lee clearly doesn't understand anything about Pharmacy Voice - it represents the entire spectrum of pharmacy ownership from the sole trader to the large multiple.

Simon Stevenson, Non healthcare professional

Agreed Stephen but what about the multiples that own pharmacies along with GP's?

I'm not for one minute an advocate of GP's owning a share in a pharmacy, but I find the letter from Pharmacy Voice/PSNC completely hypocritical.

Do they not realise that the multiples have been owning shares in pharmacies along with the GP's for years? Or are they choosing to ignore that fact?

Yes I believe the Pharmacy2U model should not be allowed but I also believe that the multiples having JV's with the GP's shouldn't either.

Pot.Kettle.Black.

Rehan Nawaz, Pharmacy owner/ Proprietor

At the most, they normally only manage a max of 5-10% of scripts from any given surgery(10,000+ patient surgery)...and that's being optimistic.

RAJA SRIKAKULAPU, Community pharmacist

But all surgeries are not having 10000 patient
What about pharmacies in surgeries stealing customers

MESUT OZIL,

At the most, they normally only manage a max of 5-10% of scripts from any given surgery(10,000+ patient surgery)...and that's being optimistic.

That' s around 40000 items a month
10% is 4000 item - that should heat my pool for 12 months..

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