By Nathan Wiltshire
The new Community Pharmacy Contractual Framework has no doubt prompted a mixed response from contractors, from those who welcome the longer-term certainty and a move towards a more services-based contract to those who are in no doubt that this new contract is yet another slap in the face for community pharmacy.
The arguments in support of this juxtaposition are well rehearsed and will no doubt continue for some time to come.
We welcome the move towards a more service-based contract. Who could argue that community pharmacy is not well placed to support the wider primary care network and better support patients in an effective way that improves outcomes?
But it is also important to remain focused on those areas of your business that continue to have a significant impact on the financial performance and sustainability of your operation.
When reviewing the new five -year funding contract for the year 2020/21, approximately 11 per cent of the £2.59bn fixed sum relates to unallocated funding for future clinical services and the Pharmacy Quality Scheme, this is in contrast to the 31 per cent that relates to the target retained margin.
Purchase margin is the margin made when pharmacies are able to purchase medicines for NHS patients at prices below those at which the NHS reimburses them for those medicines.
If you want to improve your decision-making process, these days, gut instinct is no longer enough, especially if you want to remain a competitive and sustainable pharmacy business.
Most organisations realise that data should lie at the heart of an organisation’s decision making, particularly when it comes to purchasing and pharmacy is no different.
Maximising this margin requires contractors to be as informed as possible with regards to their commercial arrangements with wholesalers.
We have talked for some time now about the opacity in the UK medicines supply market, which is unique, at best unhelpful to the pharmacy contractor and at worst, intentionally misleading.
There is a growing trend and desire from contractors to see a more transparent and open market, where pricing is netted down based upon members individual and bespoke commercial terms that they have with the wholesalers, particularly when an automated buying platform such as e-CASS is being used.
We are pleased to see acknowledgement from our chosen wholesale partners that recognises this shift in expectation and in turn ensures that e-CASS deals with net prices only, based upon your personal preferences and your unique commercial terms.
Control, transparency, and purchasing validation have become our watchwords.
Increasingly our role must be to move this agenda forward, at Cambrian Alliance Group, we are uniquely placed to ensure that we shine a light on the complexities of medicines supply and that we not only develop new methods and features to ensure simplicity but also help contractors to maximise their purchasing profits.
In an industry first, e-CASS now reports on the savings that have been achieved and can compare these to other Cambrian Alliance Group members through benchmarking.
The ability to benchmark against other similar-sized pharmacies, will allow members to make changes to their existing supplier selections and also take advantage of an increasingly sophisticated set of features.
We are particularly pleased to be able to announce the launch of our automated threshold monitoring function for contractors.
If you need to ensure targets are achieved and that you maximise buying settings upon achieving these targets, e-CASS will notify you when certain values have been reached, by supplier and by category.
This is of particular importance to support both changes to your settings once targets are met, but also if it looks likely that a target will be missed.
This development comes as part of a suite of new features, made available by the new self-service web-based version of e-CASS.
Other features include the ability for contractors to manage their own supplier settings directly as well as a new feature that supports permissions-based ordering for owners who may not always be in their shop.
Simon Dukes, CEO of the PSNC, has recently talked of the importance for pharmacy of building capacity in order to deliver on the new contract.
Using technology to undertake your purchasing is not just the right decision because it will improve margins, but it will also save vast amounts of time.
A recent survey has suggested that 43 per cent of contractors are spending an hour a day on sourcing medicine, this is valuable time that can better spent elsewhere.
At a time when we have seen unprecedented and record levels of price concessions granted, the volatility in the market has never been greater.
Simple features, such as the ability to block all orders over tariff have become a must.
At Cambrian Alliance Group we have always been confident about our supplier pricing and this tool gives us a further opportunity to be completely transparent with our members and give them the assurance they need that with e-CASS they are buying better.
Nathan Wiltshire is Group Chief Executive at Cambrian Alliance Group
This article also appears in the December/January issue of Pharmacy Business.