..Information to Pharmacists
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    Your Monthly E-Magazine
    FEBRUARY, 2003

    Published by Computachem Services

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    NEIL JOHNSTON

    Management Consultant Perspective

    The U.K "Bombshell"-Australian Fallout?

    The middle of January2003 has been electrifying for most small to medium sized UK pharmacists, who now find their livelihood threatened once more.The Office of Fair Trading (OFT) has recommended to the UK Government that the control of entry regulations for UK community pharmacies be abolished.
    A similar system existing in Australia is built around NHS approval numbers, but state legislation introduces some safeguards for pharmacists.
    The UK Government process is not dissimilar to the New Zealand government's attempt, almost twelve months ago to the day, to achieve a similar outcome.

    The fallout for Australia is that if the UK Government is successful, Australian pharmacists may be in the firing line.
    I have previously written on this topic in respect of New Zealand, and I believe it would be in the interest of most thinking Australian and UK pharmacists to revisit these articles.
    "Pharmacists Freed from Shopkeeping" "NZ Ownership Loss (2)" "NZ Ownership Loss (3)"
    "NZ Ownership Reversal"

    The UK system for the regulation of pharmacy numbers and locations, to this point, has not been a great deal different to the Australian system.
    However, the percentage of corporately owned pharmacies (mostly under non-pharmacist control), compared to pharmacist controlled pharmacies, in total, is higher in the UK than for Australia.
    Regulations governing new pharmacies or relocations of existing pharmacies, have ensured an equitable distribution of pharmaceutical services, including services in some of the lesser populated areas of the UK.

    Australian pharmacists enjoy protection under the various State Pharmacy Acts, that limit ownership to registered pharmacists (even if the approval number system were to disappear).
    This protection would not exist for UK pharmacists within the changes proposed.

    With no controls over new UK pharmacies, the sequence of events will probably be:

    * New pharmacies will be located in most supermarkets, putting competitive pressures on those existing pharmacies located in the same catchment. An imbalance of pharmacies not under pharmacist control will quickly emerge.

    * Already scarce pharmacists will be head-hunted to operate more new pharmacies.

    * Investment in privately owned pharmacies will sharply reduce.

    * Pharmacies located in rural, isolated or deprived areas will gradually disappear as they come under pressure.

    * Board decisions made in respect of corporate pharmacies (not controlled by pharmacists) will be increasingly made for maximum return on shareholder funds, not for best outcomes for community health.

    The recommendation seems to cut across plans being jointly developed between official pharmacy and the Department of Health, which are based on the existing regulatory system.
    At risk is NHS patient care and the UK government's long-term primary health care plans, through instability that would be generated within a wide range of community pharmacies.

    The National Pharmaceutical Association (NPA) has expressed anger and extreme concern at the Office of Fair Trading's (OFT) decision.
    Obviously, the Australian equivalent of the "economic rationalist" is alive and well in the OFT.

    "Without control of entry, consumers will undoubtedly suffer from a reduction in access to the range and choice inherent in the current pharmacy network. Moreover, it will destroy the platform from which the Government intends to launch a wide range of enhanced pharmacy services-as detailed in 'Pharmacy in the Future- Implementing the NHS Plan'.", said a spokesperson for the National Pharmaceutical Association (NPA).

    The NPA is arguing that there is a fundamental incompatibility between a totally deregulated marketplace and the commitment of the Government to deliver a well planned and managed NHS pharmacy network.

    In response, the Department of Trade and Industry (DTI) said:

    "We will be considering carefully the report and its recommendations. The DTI is responsible for coordinating a response across government, and will be working closely with other departments and the devolved administrations. Views are welcome. Should the Government decide to make regulatory changes, there will be consultation on draft proposals."

    The stakeholders involved in any draft proposals will be key interest groups from pharmacy, GP's (particularly dispensing doctors), the NHS and patients.
    At least the process gives more breathing space than the events in New Zealand 12 months ago, when legislation was introduced over the Christmas holiday period, without any prior warning to pharmacists.
    Here, the Pharmacy Guild of Australia gave some very good advice to the New Zealand pharmacists, who eventually succeeded in having their legislation overturned.
    However, it was not a complete success, and the New Zealand government still has a loophole through which it can begin the process once more.
    If the UK Government eventually raises the stakes against private British pharmacists, I am sure you will see the New Zealand Government endeavour to follow suit, eventually followed by the Australian Government.

    Economic rationalism is supposedly about competition, but it is really a code word for globalisation.
    So if the UK decision is followed through to its proposed logical conclusion, as outlined and recommended by the OFT, you will see more global entrants begin to set up pharmacies in the UK.
    These entities will drive out competitors, through superior resources, or engage in mergers and takeovers, concentrating pharmacy resources in a few corporate (non pharmacist) hands.

    There is a further problem that is likely to occur with an open deregulation of pharmacy in any country, and it goes to the heart of being able to practice as a professional.
    In March 2002 I published an article in i2P entitled "Beware the Ides of March".
    In this article I made reference to the loss of professionalism and professional development that occurred within non-pharmacist corporates in the UK and the USA.
    The recent events in the UK suggest that this loss of professionalism will accelerate, if the suggested legislation is passed.
    So it is worth revisiting in the context of this current British crisis.
    I also highlighted some extensive comments made by a British pharmacist turned barrister, Mr Graham Southall-Edwards. The following is an extract and a quote (by Graham Southall-Edwards in inverted commas) from my original article:

    " What continues to surprise me is that these large companies have never been externally regulated. Of course, there are internal checks and balances, but there is no mechanism to ensure that their activities further the profession of pharmacy. They are often run by "risk averse" individuals who, on their own, could never keep going for long. The senior management in these companies and their line managers therefore seek to secure themselves by endless rules, manuals, procedures, superintendent's bulletins, pharmacy log books, and general restraints on the exercise of personal professional freedom. It is what a well-known, successful, experienced pharmacist friend of mine has termed the 'protocol for blowing the nose'. Not an environment to experience job satisfaction."

    What Mr Southall-Edwards is talking about is a critical loss of professional discretion and an almost total loss of professional development, because the only "external regulator" to these corporations is the shareholder, to which all is sacrificed.
    A similar situation occurs in the US, as reported by Pharmacy Week, the publication of American Health System pharmacists. From a poll of their own members taken on the 16th October 2001, they asked the question:
    "Have you ever had your professional judgment challenged or overridden by management for the sake of 'customer service'."
    The 'Yes' response was 68.8 percent, and the 'No' response was 31.3 percent, with a total of 64 respondents.

    Now in the extract above I refer to one of the more demoralising prospects that can eventuate from a globalisation of pharmacy by non-pharmacist controlled corporates i.e the loss of professional discretion.
    Graham Southall-Edwards, on the other hand, talks about an extension of this process where professionalism is destroyed by a manipulated process remarkably similar to Quality Care Accreditation in Australia.
    This reference to the endless rules, manuals, procedures etc is a complaint that I hear fairly frequently, and in fact, one of our writers in this edition (John Skyllas) asks the question as to whether Quality Care Accreditation is worth it.
    Having had to endure similar demands within the NSW hospital system, I am also ambiguous as to my feelings.
    On one hand, in my consulting practice, I used to develop similar survey procedures with my clients, but using a "bottom-up" approach i.e explaining and agreeing with staff all procedures and asking them to suggest something better, or refine the process.
    Quality Care is a "top-down" inflexible process, and you never feel you have the opportunity to own the process.
    What is sensibly needed is a method to negotiate alternative procedures that can be tailored to individual business environments, or appoint a consultant (internal or external) to come through on a repetitive basis and do most of the work for you.
    Quality Care Accreditation comes at a cost, and the $7500 offered in offset is not going to cover anywhere near the ongoing expense involved.

    In my original article referenced above, I made a suggestion that Mr Southall-Edwards might be able to provide a useful service for Australian pharmacists. At that time I was unable to provide contact details.
    However, he has contacted me recently and offered the following for publication:

    G. Southall-Edwards MA(Law).,LLM., M.R.Pharm.S
    E-Mail: barrister@netway.at
    Telephone +447968529253

    By coincidence, he advises he will be in Sydney for a client UK company over February, so if you would like to make contact, set up an appointment through the above.
    I am sure he will be kept very busy in the current UK climate.

    In concluding this article I suggest that UK pharmacists should contact the Pharmacy Guild of Australia for advice on how best to combat this threat by political means. The New Zealand Pharmacy Guild could also offer some first hand experience.
    My personal advice is to fight like hell, preserve your professionalism at all costs, and keep out the excesses of globalisation for as long as you can.
    I sincerely hope that Australian pharmacy can hold out, if and when it is our turn (again) to fight off the predators.
    All I can say is that we must underrate our success as business people, because everyone wants to own us world-wide.


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