The efficiency challenge
Pharmacies, wholesalers and manufacturers are all looking forÂ greater efficiency, says Alliance Healthcareâ€™s Jeremy Main
The Falsified Medicines Directive, set to be implemented in the UK from February 2019, is a major project for pharmaceutical wholesalers. The legislation will see 2D barcodes added to all medicines packs so they can be verified at all stages of the supply system â€“ from manufacture to the wholesaler and when dispensed from the pharmacy. While 2019 seems far off, thereâ€™s a lot to be done in a short space of time, says Jeremy Main, managing director of Alliance Healthcare. â€œFMD is on the doorstep,â€ he tells P3â€™s Carolyn Scott, and work has begun to prepare for it.
â€œWeâ€™re putting a lot of resource and time into getting geared up for this. As you know, IT and changes to processes all take a long time. But the thing for me is that itâ€™s all really close.â€
Other changes are happening that will add to the workload. â€œAn even larger piece of work for us is the introduction of Good Distribution Practice (GDP), the European legislation making sure that we comply with good distribution. It certainly is a time of significant structural change.â€
What does this all mean from a wholesaling point of view? â€œWe know what we need to do in wholesaling,â€ he says. â€œIn simple terms, we have to record the batches of products coming in and leaving. So we can identify a batch that weâ€™ve received in the warehouse and locate a product within that. We will also be doing more visual checks, making sure at goods-in that the product has not been tampered with. This all makes sure that weâ€™ve got verified product and that we are shipping verified product to the pharmacy.â€
Achieving end-to-end verification, by adding extra technology and new processes to all of Alliance Healthcareâ€™s 13 service centres, will be â€œa significant investmentâ€, he says. And does Alliance Healthcare have to commit that investment themselves? â€œYes, absolutely, as will all the other wholesalers.â€ As it stands, there is no funding from the DH to support the project.
While exactly how the verification process will work in community pharmacy is not yet fully clear, work is already underway to get thingsÂ ready for the UK database of products that will allow verification of the authenticity of packs in communication with the European master database - â€œthe hubâ€.Â
â€œRight now the NMVO (National Medicines Verification Organisation), Securmed UK, is considering bids from the IT service providers who will provide the UK database. Their systems will interface with wherever the packs with the 2D barcode are in the supply system: to check them in and check them out,â€ says Mr Main. At the same time, manufacturers will be working on adjusting their manufacturing process to incorporate a 2D barcode on medicine packs.
The industry should be working together, now, to respond to FMD without delay, he says. â€œWe canâ€™t bury our heads in the sand; FMD is embedded in UK law; itâ€™s going to happen â€“ everyone needs to work together to find good industry-wide solutions. We donâ€™t have a lot of problems with counterfeiting in the UK, but there are a huge amount of potential weaknesses within the global supply chain, so itâ€™s an important initiative.â€
Efficiency across the industry
Funding pressures across all parts of the supply chain â€“ for manufacturers and pharmacies, for example, mean that wholesalers are under pressure too, says Mr Main.
â€œWe know that manufacturers are looking for a more efficient and lower cost supply chain, and pharmacies are also going to be looking at ways to maximise their profitability and cash flow. The pressure on us will be to be more efficient â€“ and to make the warehouses as efficient as possible.â€
The whole healthcare marketplace is changing, he says. â€œThereâ€™s strong growth in speciality medicines and there are new distribution models for those emerging. The Carter Review will have a significant effect on working with hospitals and other models, such as homecare, are growing, but they bring their own challenges. I do think itâ€™s all going to become more fragmented and more diverse.â€
â€œFrom the wholesaler point of view, I thinkÂ that we have a challenging three to five years,Â driven by structural changes within pharmacyÂ and the wider healthcare market.â€
Is there a future forÂ hub and spoke?
The current system of supply is a â€œgreat modelâ€, says Mr Main, that is â€œquick, efficient and straightforwardâ€, and hub and spoke is more complex. But we will continue to see technological and digital advances, he predicts.
â€œHowever, in reality, the technology to roll out hub and spoke on a large scale isnâ€™t there yet and would require a great deal of investment. Does it really bring efficiency? I donâ€™t think itâ€™s a panacea to making pharmacy really efficient and taking repeats out of the system.â€
Homecare is growing, says Mr Main. â€œItâ€™s a very good business model for people with long-term conditions and can really improve their quality of life. Of course, the biggest thing is that it takes people out of hospitals. I think we will start to see more people being treated at home, and patients wanting to be at home, with early discharge and nursing support.â€
Will this exclude community pharmacy from this area of medicines supply? â€œIâ€™d say itâ€™s important for pharmacy to be engaged in as many of these activities as you can. For example, not all homecare patients want to receive their medicines at home. Patients on an HIV regime, who are well, will most likely want to pick up their medicines in a pharmacy. Rather than saying homecare always excludes pharmacy, itâ€™s better to keep pharmacy in the mix where possible.â€
Medicines supply is currently â€œrelatively stableâ€ in the UK, he says, with limited shortages, but there is ongoing pressure on pricing.
â€œI think there will be price pressure on generics, where the bulk of the market is, despite this being a competitive market place with prices the lowest or some of the lowest in Europe. You can buy some generics at 8p per pack,â€ he comments.
There has to be a market where manufacturers can make money, he argues, pointing to consolidation in the generics market. â€œThe danger is that if some molecules become too cheap then some of the major manufacturers may think that itâ€™s not worthwhile having them in the market. That could cause shortages or prices to fluctuate.â€
Focus on pharmacy
What do pharmacists need to keep an eye on as the healthcare market evolves? â€œMy main advice would be to look around and maximise the support available to you. Thereâ€™s a lot of support in the market from different providers, so find it and engage with that. Thereâ€™s the old adage: â€˜some people watch change happen, some people make change happen and some people wonder what happenedâ€™.â€ For example, Alliance Healthcare has invested a lot into Alphega Pharmacy, he says.
The company is looking to enhance its relationship with customers.
â€œWeâ€™re working to get a focus on being closer to the customer: to continue to enhance the customer experience, and we have quite a few wheels turning in the business to make doing business with us easier, for example getting a better experience when you phone in to customer services.Â
â€œWe are going to invest to enable us to support our customers better.â€
Alliance Healthcare and Alphega Pharmacy will also be contributing loudly to raising the profile of community pharmacy and the wider industry, he says.
â€œThis is a really vibrant and important industry that can add huge value to the health economy. Somehow we have to find a way to project the importance of what everybody does in this industry â€“ whether thatâ€™s in the supply chain getting medicines to pharmacies or pharmacists dispensing medicines.
â€œWe have to get across that this is a really important industry. If we donâ€™t, then investment will go elsewhere or they will continue to chip away, putting people under more pressure. We have to break out of that cycle.â€
Alliance Healthcare in action at Chessington
One of Alliance Healthcareâ€™s larger service centres, in Chessington, south London, has 97 vans making deliveries twice a day to pharmacies, hospitals, dispensing doctors and private clinics. â€œFrom Chessington, we deliver 6,500 orders or more in a day and 80,000 orders nationwide,â€ says Geoff Waring, service centre manager.
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