Future of Pharmacy

Things to consider when starting a career in

community practice

David Holdford, RPh, MS, PhD

Professor, School of Pharmacy
Virginia Commonwealth University
There are few guarantees in life
Every choice you make is a gamble
Your chances improve by understanding
the healthcare market and major trends
influencing it
Knowledge helps you distinguish
opportunities from threats
 Personal &
professional
growth
Opportunities
Work that
doesn’t feel like
What is my work
future in
community
pharmacy?
Obsolescence

Threats

Drudgery
Is this how you
want to feel about
your pharmacy
career?
Isn’t this more
like it?
You may not be able to change the
future, but you can prepare yourself to
adapt to it
This presentation will…

Describe major trends influencing community pharmacy practice in the

US and Worldwide

Identify potential futures for community pharmacists

Suggest strategies to thrive in a dynamic pharmacy business environment

Where we are today
Community Pharmacy Practice is under pressure

The current business model is facing…

Shrinking dispensing fees

Lower product reimbursement

Higher performance expectations

Reasons for pressure on community pharmacy

Tightening healthcare budgets

Greater competition

Evolving channels of distribution and finance

Changes in consumer demand

 JAMA November 13, 2013 Volume 310, Number 18, pg 1951

Date of download: 7/1/2017 Copyright © 2013 American Medical Associa

All rights reserved.
 Copyright © 2013 American Medical Associa
All rights reserved.
18 cents of every dollar in
JAMA November 13, 2013 Volume 310, Number 18, pg 1951

America is spent on healthcare

instead of transportation,
education, food, housing,
leisure, and other consumption.

Date of download: 7/1/2017

Only 7 cents was spent in 1970.
 JAMA November 13, 2013 Volume 310, Number 18, pg 1951

healthcare.
cents of every dollar on
world spends more than 12
No other industrial country in the

Date of download: 7/1/2017 Copyright © 2013 American Medical Associa

All rights reserved.
 JAMA November 13, 2013 Volume 310, Number 18, pg 1951

outcomes.
And they get better health

Date of download: 7/1/2017 Copyright © 2013 American Medical Associa

All rights reserved.
 ?
HEALTH CARE REFORM
Reasons

Tightening healthcare budgets

Greater competition

Evolving channels of distribution and finance

Changes in consumer demand

CVS, Walgreens, & Express Scripts
account for almost half of all prescription
revenues in 2017
The top 15 companies account for 72% of market

Source: DrugChannel.net
The big companies keep getting bigger.

Small chains and independents have to work hard to

keep up with the big players.
And new pharmacy businesses keep
trying to disrupt the market
www.pillpack.com
Reasons

Tightening healthcare budgets

Greater competition

Evolving channels of distribution and finance

Changes in consumer demand

Telepharmacy

https://www.scriptpro.com/blog/2014/10/08/hrsa-awards-grants-for-telepharmacy-and-more-in-rural-areas/
ATM Dispensing & Robots

Instymeds.com http://www.rethinkrobotics.com/baxter/
Moby is a solar-powered store on wheels. It uses artificial intelligence, drone delivery, is open 24 hours, and needs no staff.

Pharmacy?
Reasons

Tightening healthcare budgets

Greater competition

Evolving channels of distribution and finance

Changes in consumer demand

Positive Trends
The aging population
Unmet demand for primary care
practitioners = more opportunities
Healthcare is moving from
hospitals to the community
Specialty drugs are becoming a
larger portion of spending
Adherence and persistence with
medications is still a problem
Interprofessional care is more
accepted
Uninsured and underinsured is
likely to increase with most recent
healthcare reform proposals
Margins eroding on generics
Consolidation in the healthcare
industry
Negative Trends
Trend toward limited pharmacy
networks
Possible futures
 Relational

Indenture
Retail
d
Hub
Servitude
Production Line Empowerment
Approach to Service Approach to Service

Pharmacy Gig
Phactory Economy

Transactional
 Relational

Indenture
Retail
d
Hub
Servitude
Production Line Empowerment
Approach to Service Approach to Service

Pharmacy Gig
The future is based upon
Phactory Economy probabilities. These are 4 futures
proposed in the literature. One,
none, or several of these may
come to pass.
The question is, “Which one are
Transactional you preparing for?”
Indentured Servitude: Pharmacists are trapped in
contracts serving their PBM Overlords
Pharmacy Phactory Pharmacists work in assembly line
conditions like mail order--dispensing
drugs, not providing healthcare
The Gig Economy – Pharmacists work PRN
Pharmacists get individual gigs using a website or mobile app that helps to match
them with customers or temporary employers. Gigs are of limited duration. They
can be very brief or months long like with a employment service contract.

When one gig is over, pharmacist must find another. Sometimes, full time pay
requires juggling multiple jobs at once.

https://www.bls.gov/careeroutlook/2016/article/what-is-the-gig-economy.htm
Gig example: Working at home at low pay & unpredictable
hours serving customers at ATM dispensing machines
Retail Hub

Source: PwC Health Research Institute, “The coming

Wellness
products &
services

plug-and-play health ecosystem,” 2015.

Diagnostics & Medication
point-of-care Therapy
testing Management

Coordinating
Managing
with health
insurance &
care
financing
providers
Retail Hub

Source: PwC Health Research Institute, “The coming

Wellness
products &
services

plug-and-play health ecosystem,” 2015.

Diagnostics & Medication
point-of-care Therapy
testing Management

Community pharmacists are at

the center of a retail ecosystem
of health care, diagnostics,
wellness, and financing. Coordinating
Managing
with health
insurance &
care
financing
providers
 Source: PwC Health Research Institute, “The coming
Retail Hub
In this future, pharmacies provide a platform or “health hub” that serves

plug-and-play health ecosystem,” 2015.

customers. The retail pharmacy hub can link employers, local health system,
pharmaceutical companies, diagnostics companies, insurers, and other
healthcare stakeholders to help patients get and/or stay well.
 In very large markets as hubs
Community pharmacies can compete

Source: PwC Health Research Institute, “The coming

plug-and-play health ecosystem,” 2015.
Retail Pharmacies have an advantage

They are…

• Convenient

• Efficient

• Technologically advanced

• Omnichannel

• Have highly trained healthcare experts on site

But they need to change
Doing the same old thing will likely lead to a bleak future for the profession
 Pharmacy chains like CVS and Walgreens are moving toward a hub model
http://investors.cvshealth.com
Future for Pharmacists in
Community Pharmacy
Opportunities in community
pharmacy hinge in part on the
answer to the following question…
Will technology or other
substitutes replace
pharmacists?
Answer:
Probably some, but not all
The median salary of community
pharmacists in the US in 2016 is
$120,000
Not counting benefits

https://www.bls.gov/oes/current/oes291051.htm
High performing community pharmacists
will generate value that exceeds their
cost of employment…
…On complex tasks that humans are better at doing

https://www.bls.gov/oes/current/oes291051.htm
Low performing pharmacists who do not
add value are likely to be replaced by
lower cost substitutes like robots
empxtrack.com
empxtrack.com
Technology is more likely to replace
average & below average
pharmacists
Pharmacists who fail to add value to healthcare are
at risk
Are you planning on being an above
average pharmacist?
If so, what is your plan?
What skills will you need to actively
participate in the new community
pharmacy market environment?
 Clinical Skills
More skills are
needed
Pharmaco- Practice
genomics Management

These are some of the skills

that are likely to be important
Epidemiology Oral & Written
for successful pharmacists in & Pharmaco-
Skills &
Communi-
economics cations
the future Training
Needed in
pharmacy

Assess & Add

Diagnostics to Evidence
Base

Automation & Working in

Technology Teams
The future is uncertain
Pharmacy students and pharmacists can increase their opportunities by observing
major trends and adapting to them

Adapting requires learning things like

• how to build business plans and

• marketing pharmacist services

References
https://
www.pwc.com/us/en/health-industries/health-research-institute/publications/pharm
acy-of-the-future.html

https://www.atkearney.com/health/ideas-insights/article/-/
asset_publisher/LCcgOeS4t85g/content/the-future-of-community-pharmacy-in-eng
land/10192
(note: the article focuses on England but the insights are equally applicable to the
US)

http://
drugtopics.modernmedicine.com/drug-topics/news/future-community-pharmacy?p
age=full