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Pharmacists' profit margin 'is six per cent'

The average net profit margin of a community pharmacy is 6%, a new survey shows. This includes profits arising from non-medicine retail activities such as the sale of cosmetics.

The savings associated with pharmacy services to the community which are not directly remunerated is estimated at €460 million, with the Exchequer being the principal beneficiary, said Ms Rachel Morgan, Director in PricewaterhouseCoopers.
“We are saving the Exchequer millions of euro in avoiding unnecessary GP and A&E visits,” said Ms Liz Hoctor, President of the Irish Pharmacy Union.

“There are many ways pharmacists can help with cost containment. For example, the appropriate use of generic medications and effective patient education and self-management of chronic diseases are crucial. By working collaboratively with GPs in the community, pharmacists could also provide a means for more cost-effective delivery of patient care without any need to compromise on the quality of the service,” said Mr Dennis K. Helling, who is Clinical Professor at the School of Pharmacy in University of Colorado, Denver. Dr Martin Henman, from the School of Pharmacy and Pharmaceutical Sciences at Trinity College Dublin, identified three areas for development:
* prescription medicines use and disease management;
* the use of non-prescription medicines; and
* public health awareness campaigns.
The report looked at pharmacy services, the number and location of pharmacies and specifics in relation to ownership structure, turnover, overhead costs, profit margins and an analysis of medicine demand and expenditure on pharmacy services. Liz Hoctor, President of the IPU said, “For the past 18 months, pharmacists have being battling with the HSE to protect services for our patients and try and maintain a viable profession. This report supports our argument that pharmacists are in the frontline of delivering primary healthcare and the importance of the job performed by pharmacists. Not alone do we have the confidence of patients who visit us in huge numbers every day but we welcome the report’s findings which dispel many of the misleading characterisations of our profession, especially in relation to profit margins.”

“There are many small pharmacies providing vital health services to patients, which would be less than the average profit margin and their future should not be jeopardised,” Hoctor said. “Community pharmacists are among the most accessible healthcare providers in Ireland. Irish people have greater access to pharmacies than many other Europeans with one pharmacy for every 2,853 people compared with a European average of one pharmacy for every 3,315 people.”

The seminar also heard from Mr John Crawford, Healthcare Solutions Manager of IBM General Business who gave an overview of healthcare systems both at home and abroad, including Canada and Switzerland. Mr Crawford told delegates that despite the efforts of competent and dedicated healthcare professionals, many healthcare systems are heading into crisis because of unrelenting pressures related to cost, quality and access/choice. “Without major changes, healthcare systems in many countries will become unsustainable in the next decade,” Crawford said.

“Countries that successfully transform their health services will focus on value and creating better options for the promotion of healthy lifestyles. They will focus on a move from treating patients in secondary care (hospitals) to primary care, including through pharmacies and GP surgeries.”

Mr Crawford said: “The way forward is to prioritise expenditure, providing cost-effective care and rewarding those who provide high quality, cost-effective services, which promote wellness and healthy lifestyles. New levels of accountability, tough decisions and collaborative hard work on the part of all stakeholders will be required to transform healthcare systems into a national asset,” he said.

Posted in Public Health on 02 February 2009
Tags: pharmacy