ASMI President urges pharmacists to partner with non-prescription products sector

08 March 2012

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Pharmacies have been urged to work in closer partnership with the over-the-counter (OTC) and Complementary medicines (CM) sector in order to help pharmacies lift profitability and offset declining returns from their dispensary business.
The President of the Australian Self-Medication Industry (ASMI), Mr Lindsay Forrest, told the APP Conference on the Gold Coast, that some pharmacies were ignoring the earnings potential in the OTC sector, at a time of subdued growth in the prescription medicines business.

"I don't think there would be a single person in this room today unaware of the pressures currently faced by the prescription sector. With the PBS and price reform changes, there are continued pressures on both sales revenues and profits coming from the dispensary," Forrest said.

"However, on the flip-side, non-prescription medicines, or 'front-of-pharmacy' is consistently growing year-on-year, with further opportunities for accelerated growth. The opportunity exists for pharmacy to leverage their 'front-of-store', to boost the growth in revenues and profits coming from OTCs and CMs."

Currently, prescription medicines comprise about 70% of total medicines sales in pharmacy, while non-prescription medicines make up some 30%. Within the $4 billion OTC/CM sector, pharmacy accounts for almost two-thirds of total sales.

"As we look to ensure our industry remains viable and grows, it is in our interest to continue to grow our biggest customer - pharmacy - in a responsible way," he said.
He cited three key opportunities which have the potential to accelerate OTC growth within pharmacy - medicines regulation, Rx-to-OTC switch, and a focus on profit-generating categories.

On medicines regulation, he pointed to the current business reform process at the Therapeutic Goods Administration (TGA), the proposed joint single Trans-Tasman regulatory body, and impending reform of complementary medicines.

"A positive regulatory reform agenda will result in greater speed-to-market, more innovative products and a greater array of evidence-base products in the non-prescription medicine market.

"It is critically important that the industry and pharmacy work together to drive these reforms. Change won't happen or, at best, will be slow unless we harness our collective strengths to drive this," he said.

Forrest said there were enormous opportunities for 'switch', namely from Schedule 4 (S4) prescription medicines to pharmacist-only (S3) and possibly pharmacy-only (S2).
Yet there are relatively few products that have switched recently, largely because the current Schedule 3 is considered a "graveyard" zone by industry, with the most recent switches having no rights to advertise to consumers. This contrasts with the position in New Zealand where advertising is allowed for all S3 products, once switched.
One alternative could be a hybrid model, which sits between the Australian and New Zealand models, with different 'phases' along the pathway to a full switch. It would balance the need for upfront training and familiarisation by pharmacy, with phased consumer education, followed by branded advertising, possibly after one year.
The benefits would include greater certainty for manufacturers and pharmacy, more switches, more product innovation, and better therapies for consumers. Major switch opportunities for pharmacy include oral contraceptives, statins and triptans for migraine.
"This would represent a win for the consumer, a win for pharmacy and a win for industry. It is a concept only at this stage, and would need broad industry and stakeholder consultation, including with pharmacy. But it does represent a starting point for all of us to consider in determining an alternative way forward."
The ASMI President also highlighted the top OTC growth categories as opportunities for pharmacy to attract consumers through increased exposure and professional expertise.
"So all is not doom and gloom when it comes to the future of pharmacy and growth opportunities. By partnering we can turn these opportunities into a reality for pharmacy and industry, thereby ensuring we sustain a responsible and viable consumer healthcare industry for the future."
About ASMI: The Australian Self-Medication Industry (ASMI) is the peak industry body for the Australian self care industry representing consumer healthcare products including over-the-counter medicines and complementary medicines. ASMI's mission is to promote better health through responsible self-care. This means ensuring that safe and effective self-care products are readily available to all Australians at a reasonable cost. ASMI works to encourage responsible use by consumers and an increasing role for cost-effective self-medication products as part of the broad national health strategy.

Media contact: Bob Bowden, Foresight Communications (02) 9241 2811, 0412 753 298