The effects of 60-day dispensing changes

The latest Alita SalesTracker results

The change to 60-day dispensing will be one of the biggest changes to pharmacies in decades. Should it go ahead, the impact will be felt by the whole industry, but what does the average pharmacy think these impacts will be? This month our Alita Sales Tracker survey asked our pharmacy customers how big they felt the impact would be on their pharmacy and what areas of the business this would affect.

We have also put together some strategies for our Brands and Pharmacies that may assist in reducing some of the impacts of the changes.

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We firstly asked our Pharmacy customers what effect the proposed change to 60-day dispensing will have on their business:
• 74% of pharmacies said the changes would have a large effect on their business
• 7% said it would have a small effect on the business and
• 19% were not sure

80% of pharmacies therefore believe the proposed changes will influence their business and 20% were unsure.  No Pharmacy took the option to say it would have no effect.

What are the areas in the Pharmacy the changes may effect?

What effect will the changes have on pharmacies? The Pharmacies were given the following options and they could choose more than one:

  • Charge for previously free services
  • Reduce Opening hours
  • Reduce Staff or staff hours
  • Redirect funds to dispensary purchases
  • Reduce purchases from the front of shop
  • Add Consulting rooms

The #1 area in the Pharmacy it will effect – Reduced trading hours

Reducing trading hours was the number one likely change identified in our survey, and this supports what is being talked about in social media from the wider pharmacy community that trading hours will likely be cut.

With most offering extended trading hours as a service to their community, Pharmacies with extended trading hours are usually not profitable or less profitable during these extended hours compared to regular trading hours. Additional costs like penalty rates plus reduced customer traffic usually makes late nights and Sunday service marginal at the best of times.

So, with the proposed reduction in income overall due to 60-day dispensing, it is not surprising that extended trading hours will likely be one the first areas to be cut.

The #2 area in the Pharmacy it will effect – Reduced Staff/Staff hours

65% of Pharmacies nominated reducing trading hours as the number two likely change in our survey with charging for previously free services not far behind. Here is the breakdown of these top two results.

• 50% of those that added a second change nominated reducing staff hours.
• 35% of pharmacists feel they will need to charge for previously free services.

Staff costs are one of the main costs of any business. When trying to maintain profitability in the face of lost revenue, it is not surprising that the industry will try and reduce costs in this area.

The Guild’s estimate of $170K loss to the bottom line of the average pharmacy has to be recouped somewhere. The reduced trading hours will automatically reduce staff hours but it may not be enough and there are strong indications that further redundancies, especially of casual staff will be likely.

The #3 area in the Pharmacy it will effect – Change in buying quantity or product mix

40% of pharmacies nominated a third change, focused exclusively on redirecting funds to dispensary purchases and the resulting reduction in front of shop purchases.

Concerns around the cashflow that will likely be needed to fund an increase in stock holdings for those drugs slated for 60-day dispensing would be driving these responses.

Strategies to lessen the 60-day dispensing impact

To help Pharmacies and Brands through the challenges that 60-day dispensing will bring, we have put together a range of strategies to consider for both Brands and Pharmacies.

They include strategies that Pharmacies could consider (if they are not already doing so) to maintain income whilst reducing trading hours, staff and potentially rationalising product ranges. Plus specific strategies that Brands can employ to assist Pharmacies in mitigating the effects of 60-day dispensing.

Want to Learn More?

If you’d like to learn more about how Alita Sales can partner with your Brand please contact us.

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Fax: 02 9979 4091

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