Is pharmacy the final frontier for supermarkets?

Pharmacy retailing is the last frontier for large supermarket chains. Flickr

Australia’s two major supermarket retailers, Coles and Woolworths, already have vested interests in fuel, convenience, liquor, hardware, hotels, apparel, general merchandise and technology. While they continue to battle each other for a share of the household food shopping dollar, pharmacy appears the final opportunity to grow their business.

Yet, due to current legislative restrictions, Australian supermarkets are unable to follow global retail models like, Asda, Tesco, Sainsbury’s (UK), Walmart, Publix, Wegman’s (US) or French retailer, Carrefour, all of which have pharmacies inside most of their stores.

Prior to 2000, under the stewardship of Roger Corbett, Woolworths lobbied strongly for the opportunity to branch into pharmacy retailing. The 1999 Australian Parliamentary Inquiry into the retail sector recommended supermarkets should not expand into providing pharmacy services.

The committee noted that the role community pharmacists played in public health was unique and that the expansion by supermarkets into the dispensing of pharmaceutical products should be discouraged. The committee considered Australia’s system of community pharmacy to be one of the best in the world and hence, should not be changed.

In November 2005, then Health Minister Tony Abbott, advised that any push from supermarkets, to allow pharmacies to operate within their sites would be blocked - a ban Woolworths had been fighting to overturn. In 2007 current Health Minister, Nicola Roxon denied claims by online news outlet Crikey that Labor had agreements with Woolworths to allow the retailer to operative pharmacies or dispensaries in their supermarkets. The current fifth Community Pharmacy Agreement supported a continuation of inhibiting pharmacy co-location within supermarkets.

It is evident that supermarkets are still very interested in aligning with global retail trends and providing pharmaceutical services in their stores. With the current agreement in place until mid-2015, it is expected we will once again observe strong lobbying from both retailers.

Pharmacy appears as the last opportunity for the supermarket giants to jump on. They already have vested interests in liquor, fuel, hardware, technology, clothing, stationery, insurance, financial services and are actively moving into health. Big W’s move into optometry is a case in point. As a result, supermarkets have engaged significant market research to improve and grow this category. Australian shoppers today would already be seeing new aisle layouts, point-of-sale and signage implemented to make it easier for shoppers to select medicinal products.

Time for another look?

Is it time to re-evaluate at these restrictions on supermarkets? Would the inclusion of pharmacy consulting rooms in supermarkets provide the community a viable, affordable and more sustainable network of pharmacy dispensing services?

US supermarket retailers Giant, Publix Supermarkets, Stop n’ Shop and Wegman’s were the first to announce a program offering generic versions of various antibiotics free of charge for patients with prescriptions. They said, “We hope this program will offer added convenience and value to our customers during these challenging economic times.”

Would adopting a global retail operations framework, improve flexibility to respond to the community need for pharmacy services?

Consider US food retailers, Wegman’s or Giant, that offer consulting rooms, service counters, drive through windows and automated telephone services that allow customers to order prescriptions around the clock. Or, UK retailers Sainsbury’s and Asda, that offer online ordering of prescription and over-the-counter pharmaceuticals, automated dispensaries and virtual kiosks to remotely communicate with pharmacists.

So would pharmacy services, enveloped within supermarkets, improve local access for rural and remote regions and communities?

With a network of over 2000 supermarkets across Australia and extensive logistics and supply chain capabilities, could these retailers offer remote communities access to health education and benefits that urban dwellers take for granted. Could economies of scale reduce supply chain costs, leading to cheaper medicines for such communities and reduce pharmaceutical costs to governments? Such legitimate questions are worth asking.

Could our supermarkets alleviate the pressure on GPs, medical centres and hospital waiting rooms, by adopting a UK/US model? In Australia, from July 1, 2012, pharmacists will be able to re-issue regularly prescribed medicines, such as birth control and cholesterol lowering medications.* This will mean patients will not need to keep going back to GP to get repeat prescriptions. Will such a move present an opportunity for supermarkets?

Although considered a controversial idea, could we see suitably trained nurses or pharmacy assistants operating in supermarket consulting rooms, offering diabetes blood tests, inoculations, travel vaccinations, dietary advice and general health checks, such a blood pressure tests. In UK supermarket Asda offers £7 flu shots. Would such a move reduce waiting times in medical centres and hospitals and provide doctors, nurses and other medical professionals more time to treat the seriously ill?

Further, could such private enterprise provide funds for capital projects at a much larger scale ever seen, removing this cost from governments and indirectly all Australian tax payers?

A precautionary note

It is important to recognise that community pharmacy plays an important role in the Australian healthcare system. There are approximately 5000 pharmacy-owned community pharmacists in Australia, employing over 12,000 university-qualified pharmacists and approximately 30,000 trained pharmacy assistants.

A recent Pharmacy Guild of Australia survey found that 62% of surveyed Australians sought information about medicines or the treatment of a minor illness from a community pharmacist in the past year.

Further research has also discovered that quality advice, fully trained pharmacy assistants and trust is the single most important competitive advantage pharmacy has to offer.

The atomised interaction with a supermarket checkout operator will not be - and is not suggested to be - a suitable alternative for the continuing personal relationship of care, patients share with their pharmacist, or doctor. I would suggest the Australia consumer would never accept such an ideal.

Importantly, healthcare is not a commodity. It cannot be bought and sold like a can of baked beans or a bottle of milk. Choice among different brands is problematic enough for customers shopping for consumer goods and services. Unlike low involvement goods, when purchasing over the counter medicines, the customers demand for quality advice and trust is vitally important.

When the consumer is ill, what matters most is the relationship of trust that can enable them to negotiate the imbalance of knowledge and expertise in their encounters with pharmacists and doctors. Unless a carefully considered model is developed, we will never see pharmacies in supermarkets.

*The original article incorrectly said pharmacists would be able to re-issue blood pressure medication. This reference has been removed to correct the error.