Hi
I run a discounter model based pharmacy. Ask me anything
[AMA] I am a pharmacy owner, ask me anything
pharm86 on 07/11/2018 - 20:15
closed Comments
Fred, better the devil you know…
LOTS POS though
LOTS POS is not one I come across frequently. You're lucky you haven't experienced FRED Cloud.
Used FRED cloud once, I agree it is really bad
I remember sending out LOTS POS monthly drug updates many moons ago, along with Surefire Dispensing, and few other DOS oldies. Oh the (bad) memories.
Dispensing systems peaked with AMFAC for DOS
@mingofmongo: I used to work for AMFAC, we used to laugh at it's name, it stood for something Marketing Facility? I think the dispensing software was simply called Dispense 2 or something like that. The DOS version was outdated and we were migrating people to the windows version Surefire Dispensing, albeit very slowly.
Z Software, blows any of the aforementioned out of the water.
It’s like Uber to the Taxi industry. Innovation.
I've never actually heard of Z Software before surprisingly. Does it have all the features of something like Fred and more?
I like to think of it, that they brought all the best features of all the different dispensing softwares into one package, and then added their own features on top. I think most of my collegues say “it just makes sense!” When they use it for the first time haha.
Found them at APP, and recommended to my employer at the time, and we swapped from Fred.
what i dont understand….
We're talking dispense software here :)
….ok….please elaborate…
@Zachary: When you go to the pharmacy and they spend ages typing up on their computers for your script… they're using dispense software. The names I mentioned are different software packages with FRED Dispense being the most common and one of the most (imo) dysfunctional and tedious to use packages out there.
@Clear: Can someone explain why FRED is so popular even though it’s so dysfunctional?
And anyone tried or use Corum clear? Thoughts?
why do they always need to see my drivers liscence and take it out the back? are they scanning/photocopying it?
doesn't matter what I buy either - antihistamines, cold and flu (without pseudoephedrine), even when picking up toothpaste.Haha go to another pharmacy if it isn't for something that isn't related to pseudoephedrine. Plenty of people value your business, might as well take your business to them
i would, but there is only one open in my town by the time I finish work, I just want to know why they are taking it, are they scanning it and sending to some register - will it have implications if they send it off saying I am in the chemist too much (usually about once every month or so).
No idea mate, all I can say is, legally they would only need it if you were getting pseudoephedrine
@pharm86: Oh I'm not disputing that point - just that it might not be as simple as just refusing to provide it; they might be refused service and end up having to go elsewhere. Whether the inconvenience would be worth it, I've no idea.
@HighAndDry: I hear these stories (and have heard many about my competitors) and cant stop feeling some people actually want to go out of business
@HighAndDry: I think OP is from NSW, so what he says is correct.
Note in QLD and a few other states, require driver license for S3s, the behind the counter stuff, like antihistamines etc
@SharkChu: They do not; in qld they only need the patients details (name address etc). No where in the health drugs and poisons act does it specify you need a driver's license for s3 products
Have you tried just asking them why they need it for buying toothpaste?
How much money needed to own a shop?
Mine was around 2 mil, all I had to come up with though was the 20% deposit. Make sure you only do this in pharmacies that are already profitable
Make sure you only do this in pharmacies that are already profitable
Define profitable (to you)?
Income > Expenses
So $400,000 deposit. Do you mean you need 400K saved up or 400K borrowed from the bank?
What does deposit mean to you? I know it's an AMA but was that question even necessary?
Lol bbqwer you got some nerve still hanging around!
Are you part of a chain? If not, how do you feel about Chemist Warehouse? What about other chains?
I am, CW is a large player I the industry. Personally I like the discounter business model (I wouldn't be involved in a shop that is a discounter if I didnt). Banner groups are also quite important but some are definitely better than others. If you go to someone like a Terry White Chempro (another big player) you pay higher prices and the only one who benefits is the landlord. I've seen TW pharmacies pay around 6-700k in rent.
Is your involvement with the discounter as a franchisee?
Yes, great group to be involved in too. Still not huge but growing
What do you like about the business model?
Low rent, efficient processes and buying power means lower prices for the end consumer benefits and they come to me instead of the other guy. Especially when we dont compromise our service level and professional services
@pharm86: Why do you pay less rent? I work in property strategy for a major institution, usually major brands command better rental deals as they “bring” customers to centres, or more reliable brands for more secure leases etc
- Do you sell yoyo's or capguns
- Do you make more money from prescriptions or from non-prescriptions
- How much do you pay your pharmacist?
- No
- My split is 40:60, 40% dispensary and 60% front of shop
- I pay them a fair wage, I actually pay me dispensary manager more than I pay myself. 90k
Is your dispensary manager a pharmacist, or a technician?
Pharmacist
@pharm86: Is your dispensary manager required to work outside of normal business hours in order to make this salary (eg weekends)?
Do you employ any pharmacy interns?
Don't have any experience of the industry - but 90K for a manager who's a pharmacist seems… low?
A pharmacist manager's salary can start from about 70k, so 90k is decent/good.
The industry isn't the same anymore after CW's introduction in 2008. If there's a CW in your suburb, your local corner pharmacy is probably barely scraping by.
How generous of you paying your dispensary manager more….but wait the less you pay yourself then the more your profits are anyway :)
I have to split that though :) my wages I dont
Has your profitability increased or decreased over time? What about the outlook? Are you concerned with supermarkets getting in on the act?
Ours have actually increased across the group. Supermarkets are generally more expensive than we are so the savvy shopper would still shop with us. I am more worried about Amazon tbh
Wouldn't the savvy business owner (especially one in discount pharma/retail holdings) commence either sell off, diversification of their investments or attempt a new business plan to combat a threat like Amazon? Why are you 'worried'? Adapt your business model!
Worried because they are really good at online retail. Coles and woolies are worried why wouldn't I be?
@pharm86: I don’t think colesworth need to worry, I order chips by the dozen and still wait two weeks to get it. And when it comes I still have to go to post office to get it. It also never saved me a trip to the supermarket. So now the convinence of online shopping has increase my trips to the shops (PO+coles) oh the irony.
Some say that pharmacist is nothing more than a glorified retail sales assistant. What are your thoughts?
I totally agree with this viewpoint. Why I left the industry.
Respectfully, I would have to say if that is the case the industry is better off. Plenty of people who are proud of what they do, there is no room for anyone who does not have passion and pride for what they do.
Theres two sides of community pharmacy, and unfortunately the retail model based is driven to dominate the market, and as a result only prove Dr Ackermanns' point of community pharmacy and the downhill direction it is headed.
It's a shame I couldn't share the passion and pride to compete on price wars and drive profits to the down to the point where fellow pharmacists are paid 30/hr knowing there's another pharmacist out that will stick labels on bottles for less.@charzy: I pay my pharmacists much better than 30, I believe they add enough value to warrant over 40 and that is what they are paid.
What is wrong with the price wars though? Is it wrong to give the customer a fair price on their prescription medications while providing them with the same advice and service level? I get that traditional pharmacies cant do this because they have a higher rent etc, but who other than the landlord would benefit from those higher prices?
Let's face it, the older model is dead/dying and need to innovate quickly. Otherwise discounters like myself would not be doing so well
@pharm86: 40/hr is standard pay nowadays for experienced pharmacists. However the untold story is that pharmacists were also paid on average 40/hr ten years ago. Every profession incrases their employee wage through CPI or some sort of pay increase to cater for inflation. It's pretty sad that experience/knowledge and skills to doesn't dictate a pharmacists pay, and even worse to know their livelihood is earning them less over time, for more work/required skills considering the introduction of hmr, vaccinations, compulsory CPD etc within the last ten years.
Price wars force their businesses to decrease price, rely on volume and ultimately cut expenses to obtain an advantage(profitwise). Once they eliminate their competitors, it's only natural to increase prices. I refer to this phenomenon as pharmacist genocide/end game monopoly. It's already seen in America when pharmacy was deregulated and now only Walmart and big players control the community pharmacy scene.
Another side effect of reducing your business expenses is usually 2 major factors, rent and staff management. Landlords increase their rent by CPI normally and know that location is important for retail businesses (discounters are smart about this, they are rarely within a Westfields or shopping mall), so your only alternative is to lower staff cost. This why many young registered pharmacists are employed/abused at discounters which then lead to the formation of a pharmacist employer union aka PPA in the last few years.
Traditional pharmacies do not differ only by their location/rent cost as you imply. Their model revolves around services. Yes their products are priced higher, however they are service driven and not volume driven and to compensate spending time with the customer, they reduce volume output.
I agree that the traditional model is dying and not working as more consumers become money savvy. However the retail model is not the way. For one it doesn't embrace or showcase what pharmacists do and thus the term 'glorified shopkeeper' was coined. Secondly you'll reap profit due to your competitors demise, however it'll only reinforce the previous health Minister and RACPG are portraying pharmacy and eventually lead towards deregulation. Inevitably all community pharmacies will be rebranded as pharmaworths/pharmacoles one day. The Guild can only lobby so much as long as the 'would you like fries with that' mentality stays.It's only a matter of time because Uber follows this model and now the Taxi service has been deregulated and their 500k taxi licenses are worth peanuts now.
There's nothing special about a normal person and a taxi driver for these services, so what's so special between a pharmacist proprietor who adopts a discounting retail strategy and a businessman who adopts a discounting retail strategy?
You speak of innovation. There is nothing innovative about using an existing profit driven model within a regulated industry as a vehicle.
If you had passion and pride as a pharmacist, you should be working in hospitals where your skills and knowledge is put to use everyday, not to stick labels on boxes.
P.s. Pharmacist dropped from 2nd to 3rd and lost two points in last year's Mckenzie survey for the first time in ~10 years.@charzy: Price wars only work if customers don't think extra service or skills are worth the additional price.
Ultimately it's customers who decide what happens - maybe those charging more just weren't providing enough value?
@HighAndDry: It's not that the pharmacist isn't providing enough value; it's that the customers need for those skills/knowledge have decreased. The majority of people will go to DrGoogle, or OZB AMA to find their advice, then go to the cheapest pharmacy. Or they will go to their local pharmacy to ask for advice, say they'll think about it, then head down the street to the discount chemist.
It's similar to the 'get measured and try your shoe size in store, then buy online' mentality. And this sort of transaction works best for a discounter's model; scripts in scripts out, no need to spend time on counselling etc.Yes it's the customers who decides what happens, and unfortunately the customer's perception of pharmacies have changed especially with the younger, more tech savvy generation that encourages the above behaviour.
A handful of local non branded community pharmacies have survived, you'll find them in the ageing population, or in rural areas where there is no direct competition. The major difference between an ageing population and the emerging younger demographics is the use of technology/easy access to information; essentially nullifying a pharmacist's knowledge/skill set, and even preventing a visit to the doctors in some cases.
There's talk about moving pharmacists into GP surgeries where their skillset would be greatly beneficial in conjunction with a GP's service, and not having to rely on retail sails to survive. Now that's a more innovative model if you ask me.
It's not that the pharmacist isn't providing enough value; it's that the customers need for those skills/knowledge have decreased.
That's really the same thing - if people don't need [thing], the value of [thing] has dropped.
and unfortunately the customer's perception of pharmacies have changed
Then the 'community pharmacies' you say are "better" have failed to market themselves properly and convince customers that what they provide are actually valuable.
the use of technology/easy access to information; essentially nullifying a pharmacist's knowledge/skill set, and even preventing a visit to the doctors in some cases.
This is…. asinine. Tech savvyness and 'access to information' absolutely do not serve as a substitute for professional skills, knowledge and experience. If this were the case, tradespeople wouldn't exist, neither would accountants, lawyers, doctors, etc.
Now that's a more innovative model if you ask me.
Only if you believe in your premise which is kind of bunk. Discount chemists have a few obvious competitive advantages which do not revolve around decreasing services (and this is from a complete outsider's perspective - so it should be obvious to you too): Volume - I don't see queues very often in small pharmacies, meaning the staff (and other fixed costs) are basically idle for a lot of the time. Higher volume means each staff member is more productive and efficient. Lower fixed costs - Because of the more competitive prices, they can be located away from prime retail locations as people will be willing to go further, meaning lower rents and other fixed costs.
Considering rent and wages are two of the bigger expenses… I don't see why this model is bad. It just seems more competitive.
That's really the same thing - if people don't need [thing], the value of [thing] has dropped.
I miscommunicated that bit; it was under the context that customers do not have the need to obtain services from pharmacists in general as they are now available elsewhere.
Then the 'community pharmacies' you say are "better" have failed to market themselves properly and convince customers that what they provide are actually valuable.
The market has changed due to the perception of pharmacies; they are a place to buy restricted medications, not a place that provides knowledge and services. Yes the 'community pharmacies that I say are better' have failed in marketing, which is why Dr Ackermann is arguing that there shouldn't be a retail incentive behind a pharmacist's/pharmacy's renumeration.
This is…. asinine. Tech savvyness and 'access to information' absolutely do not serve as a substitute for professional skills, knowledge and experience. If this were the case, tradespeople wouldn't exist, neither would accountants, lawyers, doctors, etc.
I do my own taxes through ATO documentation that's available online. I self diagnose minor ailments being an ex-healthcare professional. I do DIY around the house, there's plenty of youtube videos around. Saying that if I need specialised advice or skills, I would go seek those specialists listed. The one shoe fits all approach is not really applicable here.
Only if you believe in your premise which is kind of bunk.
Studies have already been initiated overseas following this model, and is still progressing.
Discount chemists have a few obvious competitive advantages which do not revolve around decreasing services (and this is from a complete outsider's perspective - so it should be obvious to you too): Volume - I don't see queues very often in small pharmacies, meaning the staff (and other fixed costs) are basically idle for a lot of the time. Higher volume means each staff member is more productive and efficient. Lower fixed costs - Because of the more competitive prices, they can be located away from prime retail locations as people will be willing to go further, meaning lower rents and other fixed costs.
We should just deregulate pharmacy then if this is the perspective of the general population (and that's how it is in the US). Everyone would win. Great prices for consumers due to buying power of financial glomerates, massive savings for government who reimburse pharmacies, and thus saving the tax payers monies, and hopefully decent wages for employee pharmacists and they don't need to worry about retail performance and can focus on using their skillset.
The losers? Pharmacy owners.Considering rent and wages are two of the bigger expenses… I don't see why this model is bad. It just seems more competitive.
I didn't say it was bad in a competitive sense, or for a financial means. It's how it sheds a negative light for what Pharmacy has stood for in since its inception.
@charzy: So you say 30ph, then suddenly now 40ph is the norm? Which is it?
If the traditional model added enough value through 'services' not as many of the pharmacies that follow his model would be going broke. Also, need clarification on which services they are. If it is the 6cpa professional services most discounters outperform independants by a long shot.
@pharm86: $30/hr is the norm - as it was 10-15 years ago (pharmacist wages have been declining in real terms). Many are lower than this.
$40/hr, in metro areas, is pretty rare. $40/hr is also a ridiculously low amount for the ceiling of a profession. This should be the norm (it's roughly what you would get if you started at $30/hr 10 years ago and indexed for 3% every year).
This has lead to a significant proportion of the higher achievers of the profession leaving for much greener pastures. This is an industry level problem
Glad you are doing what you feel is right, but it doesn't mean that the issue is not systemic or that another person's experience is invalid.
The 'traditional' model is no longer effective as they were never paid directly for advice or services provided. Arbitrage is also a real thing; buying from a discounter and then going to an independent for advice.
@pharm86: If you really want to be nit picky about the range, 27/hour (newly registered) to 40/hour(experienced 5+ years). I did mention 40/hour was for the experienced pharmacists.
Also, need clarification on which services they are. If it is the 6cpa professional services most discounters outperform independants by a long shot.
I'm not surprised https://www.pharmacynews.com.au/news/chemist-warehouses-meds…
Pharmacists working at Chemist Warehouse stores across the country are being urged not to “take that foot off the ‘MedsCheck accelerator’,” by the group’s management team.
Sure it might not applicable to ALL discounters (and independents), but it's not surprising either to see a handful ruin it for the rest.
@charzy: My customers are almost all regulars, there are plenty of alternatives places they can go to. They stick with me because I provide great service and great prices. We obviously offer more value to customers compared the independants who do almost no business in the same suburb.
You can tell me that independants provide more 'service' but you have not been able to define this service in a quantifiable way. It obviously isn't the 6cpa programs, so please tell me. What services are these?
My customers are almost all regulars, there are plenty of alternatives places they can go to. They stick with me because I provide great service and great prices. We obviously offer more value to customers compared the independants who do almost no business in the same suburb.
Congratulations I'm so happy for you.
You can tell me that independants provide more 'service' but you have not been able to define this service in a quantifiable way. It obviously isn't the 6cpa programs, so please tell me. What services are these?
I clearly referred to the 6CPA program by referencing the medscheck scandal. However if you want me to define service as quantifiable, let's start with doing one's job properly in a humanely way and not killing people by accidentally giving digoxin over lasix.
Lets have a bit more insight of what happens in the background of a discounting pharmacy(e) It was not unusual for The Chemist Warehouse, Phillip to dispense
between 500-600 prescriptions per day;
(f) On 14 May 2012 when Customer A prescription was incorrectly
filled, she estimated that approximately 60% of prescriptions
dispensed were completed without the patient’s medical history
being checked by a pharmacist;
(h) On the day of the error in Customer A’s prescription, only one
pharmacist was on duty to supervise four dispensary technicians.
That one pharmacist was on dispensing duty for more than six
hours during the day;
(j) When questioned by the Panel, the respondent stated that at the
time of the incident involving Custoemr A, she had held general
registration as a pharmacist for approximately one or two months
and had been an intern for the 12 months prior to that;A 2 month registered pharmacist was overlooking up to 500 scripts a day, overlooking 4 dispensing techs. This is the reality of a discounting model. Sure you can say this isn't my pharmacy, but the business model encourages these work environments.
@charzy: Yes and I can definitely say this is not my pharmacy. We have 2 pharmacists on duty at any time (except weekends) including myself at any time and an intern+ 2 techs. We pride ourself on customer service and providing healthcare. Not all discounter models are born equal; I save 500k on rent compared to a comparable shopping center pharmacy and provide savings to the end consumer. Can I make more cash by skimping on wages on professional staff? Sure. Would be very short sighted of me to do it though
@charzy: I would also pay her more than 40 per hr if she was worth more. I am happy to pay above he market for people who are worth more
@charzy: In a strictly business sense, a good rule of thumb would be paying them roughly 1/5 of what they bring into the business
@pharm86: And how are your KPIs measured? Surely not by how much they counsel and advising the customers? That's the requirement of every pharmacist.
Or is it more for companion selling and push for providing 6PCA claiming which ultimately lines up the owners pockets more than incentive for the employee?@charzy: 6cpa (which I help them with), how many transactions they put through on the register (discourages them from hiding in the dispensary) and 0 customer complaints.
I am not one of those owners who dont turn up/stay in the office all day. That is where my other 30 hours (on top of the 40 regular hours) come in
@mingofmongo: It's very difficult to move from community into hospital unless you know someone inside already, or have previous hospital experience (unless you apply as an intern). There was mention of nepotism in one of the two threads, and it's true that I've seen colleagues in my year move from community to hospital because they were close friends. I've applied to many hospital pharmacies during my stint, and sad to say never got a call back for first round interview.
To answer your question I've changed professions, and I'm much happier where I am now (less stress/better off financially and job satisfaction!), and still career progressing with no ceiling (3 years in, at age 31 so it's never too late!).@charzy: I'm sorry to hear that. I work at a hospital where I'm pleased to say that kind of thing isn't the case - quite the reverse, we have a new training program aimed at new-to-hospital pharmacists. Sorry your experience hasn't been so pleasant.
@mingofmongo: I can understand that there'll be protocols for new to hospital pharmacists once they're in, but what about the initial step where the interviewer vetos the applications? Id assume they'd check for pharmacists with previous experience, and decline the rest unless there was 0 with experience.
Here's a technical one for you…. Fred? Mountaintop? Something else nasty?