Speaking at the recent Terry White Chemists national conference in Melbourne (Aug 9 – 11), former Pharmacy Guild of Australia (QLD) President, and founder of the Terry White Chemists Group, Terry White explained that as the pharmacy profession changes, pharmacies will increasingly be consolidated into large retail groups.

According to Pharmacy News, August 11, 2015, Mr White said, “A national solution requires a national approach, and as we move towards that point, it has become clear that more and more pharmacies will need the support of a national retail brand with the right retail infrastructure to move forward.”

In his address, Mr White utilised the consolidation of Chemplus by Terry White Chemists in May this year as a case study, describing how the move “maximised the benefits of both groups, and enabled the business to build quickly on combined capabilities.”

Mr White’s comments reflect US trends in which large retail pharmacies are increasingly acquiring medical clinics, pharmacy benefit management companies (which process prescriptions for corporations and insurance companies, and negotiate prices with drug manufacturers and retailers), and smaller pharmaceutical retailers.

An article published by The Smart Cube cited how in the US this year alone, up until June 30, 17 deals have either been announced or completed in retail pharmacy or pharmacy benefit management acquisitions. Although this trend is not new, it appears to be growing.

In 2005, a research piece published by the National Centre for Biotechnology Information pointed to this trend, stating “Consolidation of the specialty pharmacy business indicates a repositioning to buy new market channels, reduce costs, and compete in a burgeoning market.”

So far, it’s hard to define any real outcomes from this trend, although US reports suggest consolidation is increasing revenue for pharmacists, and driving employment and annual growth.

It’s hard to predict if and when, as Mr White suggests, pharmacy groups will be consolidated into larger retail groups, and to determine how this will affect pharmacy sales and profit margins.

It is interesting to note, however, that since its acquisition of Chemplus Pty Ltd in May this year, the Terry White Chemists Group is valued at more than $1.2 billion, comprising more than 220 pharmacies Australia-wide.

On August 11, 2015 Pharmacy News quoted CEO of Terry White Chemists, Anthony White, citing within the first full month since consolidation, front-of-shop profits were showing “strong, consistent growth”, with above-market, like-for-like pharmacy growth in retail sales, and were up by 16 per cent in June, 2015.

What are your thoughts – does consolidation represent the future of pharmacy?

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