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Features
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5/19/2011
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The Big Interview: Jeremy Main
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In an exclusive interview Alliance Healthcare managing director Jeremy Main tells Shailesh Solanki that, more than ever before, pharmacy must be forward-looking...
You've worked in the FMCG (fast moving consumer goods) market with Mars and Holsten. What attracted you to the pharmaceutical industry?
It was a completely new industry, having been involved in brands. It was an opportunity to stretch my mind and enter something new. It is an industry where you're helping patients and making a contribution. In FMCG, you're selling people more beer and Mars bars! The pharmaceutical business is more fulfilling from that point of view. But having been in the industry, it's a fantastic industry. It's got lots of good, caring people and it's an ever-changing industry as well. It's always stimulating because there's always something happening, whether it's regulatory or in the supply chain, you never lose interest.
Is this a time of great opportunity or great uncertainty for community pharmacy?
I always see things as a period of great opportunity for pharmacy. It's always challenging for community pharmacy, going right back to 2005 and the original new contract and that big change. The market place is constantly evolving. It is tough economically but community pharmacy is in a great position to seize opportunities. Community and independent pharmacy is entrepreneurial. It's led by people with real passion, care and commitment in the community and there's some great opportunities coming into scope. The point is, though, to change your business model, to evolve. You've got to embrace change, not resist change. There's the whole reshaping of the NHS but there's great opportunity there.
Do you think the independents are resistant to change?
Independent pharmacies are very good at what they do – interact with patients, dispense medicines, ensure patients are looked after. I sometimes think the challenge is seeing the bigger picture of what's going on and being prepared to be forward-looking and not say 'we like it the way it is and we don't want change.' You have to change in every business. You've got to adapt your business accordingly and lots of independents have done that. They've embraced the whole service agenda, they've got the right skill mix in the pharmacy, they've taken training their staff seriously, they've looked for independent niche opportunities, whether in services or products, and they've tried to deliver excellent customer service. My advice is that you've got to run your business really well and ensure you're getting the right income from the right areas.
Do you have any concerns about the way in which the Government is going about implementing the health reforms?
I do. The changes for the NHS are very directional and strategic. The things that concerns me is the lack of executional detail over how it's going to happen. I recently read in the paper that, with PCTs being taken away, they've put aside a £1 billion redundancy payment for all the executives who will be made redundant, but most of them will be re-employed again within a different structure! It's causing unnecessary upheaval. One of the big things is PCTs stopping commissioning services. Pharmacists have had issues over the commissioning of services from PCTs, the inconsistency, the lack of funds, and so on, and now it seems that's going to increase even more before GP consortia and the new structure is in place. The concern is that you're going to have a period of real upheaval and uncertainty. I think this is the 15th major change in the NHS – it's a massive organisation.You're not just changing a small business.
Do you see a conflict of interest once the GP consortia start commissioning services?
There could well be. There's two elements which are big. One is the GP consortia commissioning and spending the £80 billion (health budget), with a lot more power placed in the hands of GPs. I'm not sure GPs have the skills to be commissioners as well as practioners and I think they're concerned about that themselves. You're asking them to play a double role. The other thing is the concept of 'any willing provider' coming into that space. What that seems to indicate is that you can commission a service to anybody within a framework, provided they can deliver at the right quality and right cost. For me, that feels like it opens up the market a lot more. There's all sorts of providers – new entrants from overseas, entrepreneurial start-ups, more on the internet. The critical thing is that pharmacy needs to be more on the front foot with the pathfinders. They need to step forward and demonstrate their expertise.
Do community pharmacists actually know how to engage with GP consortia or are they largely clueless about how to going about doing that?
There is no process in place at the moment to do that. The execution of detail about how to engage is not really there but as those things become clear, community pharmacy needs to be on the front foot. The problem is when you sit back. My point would be to urge pharmacists to get to know who to contact, who's who in the area, who are the directors in public health, get out there, network, put yourselves in front of them. We still don't know what the geography will look like and it'll be a question of being flexible and being ready to do it.
From your experience of the pharmaceutical industry, do you feel that pharmacists have the appetite to actively engage?
A lot of independent pharmacists do and some don't. It's like anything in life – some people make change happen, some people watch change happen and some people wonder what happened! It's about being proactive and engaging. It's like our business. The business model changed and we had to reinvent our company to deal with the changing world. We had to move from a traditional wholesale model to a much more sophisticated business. At the time a lot of people said 'this can't happen”, but they were living in the past.
“Category M is a bit of an old story. I always think it's a bit of a surprise when everybody throws up their hands about Category M. If the Government is clawing money back, it's because pharmacy has had too much”
Pharmacy is finally represented on the NHS Future Forum but there is no guarantee it will be represented on health and well-being boards. Is this worrying for pharmacy?
I do find that worrying. We need to make sure that pharmacy is represented. The pharmacy bodies, like Pharmacy Voice and the rest, really need to push for involvement. Ideally, you would have a director for pharmacy and medicines but that's still undecided. But Alliance Boots in total is working with some of the other bodies and healthcare professionals to make sure we get our place there. We're lobbying, through Alliance Boots, the Department of Health and all the major bodies, making sure we put forward pharmacy as we always do. We're very active.
Does community pharmacy suffer from a lack of strong leadership?
Pharmacy needs to have really strong and charismatic leadership. I'm optimistic that pharmacy voice will deliver that. What is important is that the different messages are pulled together into one because we know that's how the GPs do it. What Pharmacy Voice have to ensure is that there's not an NPA view, a CCA view and an AIMp view, but that there's one view. That needs to be done in a charismatic and powerful way. There are various opportunities to develop that. The trouble is we spend too long analysing the issues and talking about the same old things. Let's take the supply chain and some of the issues around quota products. What's happened over the last two years is that everybody has sat around blaming each other. Pharmacists have blamed wholesalers, wholesalers have blamed manufacturers, manufacturers have said there's no problem, and it's just gone round and round in circles. We need to understand the problem, put in place the solution through the BAPW and various trade bodies and move on to more positive things. Because while everybody's still looking at that, they're not looking at (pharmacy's future under the reforms) and pushing it forward.
Are there too many pharmacy bodies pulling in different directions?
I don't think there's anything intrinsically wrong with having a number of pharmacy bodies. The NPA provides support, it has rich information and data and does its insurance and supports independent pharmacy. The PSNC is there to do another job, negotiate the funding with the Government and AIMp and so on have a role to play. It's vital they all consolidate with one very clear message about what pharmacy can do within the context of the new world and that it's very charismatically put forward so people hear the message. Pharmacy Voice represents retail pharmacy. That does concern me. The whole industry needs to pull together. We've got to come together and stop blaming each other and knocking our industry. Our supply chain, for example, is the best in the world. Twice-a-day delivery. Pharmacists get great support and a great supply chain but all they ever do is complain about the things that go wrong. That model, of course, could be completely changed.
Is the much-maligned Category M clawback heaping more pressure on to community pharmacy?
Category M is a bit of an old story for me. It's part of the then funding agreement between pharmacy and the Government and the rallying call was that Category M was designed to ensure the contract purchase profit was controlled and maintained in the right way. I always think it's a bit of a surprise when everybody throws up their hands about Category M because the reality is that it's a set mechanism. If the Government is clawing money back, it's because pharmacy has had too much. It's a balancing act. It's about anticipating and running your business and understanding the dynamics of what you're going to make from different products and different categories. I do though appreciate it is hard for many independents to plan a long way ahead on this and better communication further in advance, even if it was only an indication, would be very useful.
Tell us briefly how Alliance remodelled its business
In 2007 the implementation of Pfizer contracts precipitated a complete change in the market place. Some 80% of ethical manufacturers have gone to a new supply chain model, whether that's reduced wholesale, agency or DTP, and the reality is that the volumes have grown and we've had to manage our business in a more efficient way. We've had to retain the quality of service, twice-a-day delivery, good customer service and meet the needs of manufacturers who want to do things differently in the supply chain. We've had to be flexible, make sure our cost base is right, adjust various parts of our business to stay competitive. Five years ago manufacturers weren't interested in the UK supply chain. Now they are, so we've got to satisfy both pharmacists and manufacturers. We've now got a full manufacturer team working in partnership with all the suppliers. Five years ago we wouldn't have had that. We used to serve about 6,000 customers and went on to serve 15,000 customers. We made a huge infrastructure investment in the business, more fleet, more people, we opened our new service centre in Exeter and completely restructured the capacity of our business.
There was anger among independents when Alliance merged with Boots. Has that anger subsided?
That's something that happened in the past. Why would you want to look back on it? Nothing really changed. We maintained our business model, our people are the same, our commitment to service is the same and we treat independent customers and support them in the same way. There was some anger regarding Boots because they were seen as a sort of enemy. But Celesio have Lloyds. What is the difference? Much of this industry is vertically integrated.
Tell us about Alliance's link-up with Alphega and how that will benefit pharmacy
What we're trying to do is provide comprehensive support for independent pharmacists who want to grow their business. It's a virtual head office and involves everything a pharmacy head office will provide for you – category discount, a very strong retail promotional plan which can be pan-European or local to the UK, product promotions and all components to running your business, including staff training, human resources, financial planning and business mentor support. We've found that the Alphega pharmacies perform better and we want to continue to grow it. It’s a great potential opportunity for independent pharmacists.
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