Beyond the dispensary: why pharmacy services will drive the future for pharmacies

by | 20/12/21 | Insights


Pharmacies have almost always been synonymous with access to goods, but that reality is changing as customer habits, market conditions, government policy and the nature of healthcare itself shifts. 


The last two years of living under Covid have wreaked havoc on businesses all across the world and various economies, and pharmacies have not been spared either. According to The Pharmaceutical Journal, more than 450 community pharmacies shuttered between 2020-2021 due to funding freezes and stiff competition from other retailers, online and offline. These statistics have emerged despite the fact that the pharmacy has (arguably) never been more important for communities across the region: 

In late 2019, the United Kingdom’s NHS created its NHS Community Pharmacist Consultation Service (CPCS) to bring pharmacies deeper into their fold. Within three months, over 114,000 patients with minor illnesses were referred to their local pharmacy, allowing them to skip the tedium of a trip to their GP or A&E—just a sliver of the estimated 307 million appointments in the NHS’s estimation. 


The dispensary hits a wall


According to Kevin Murphy—a spokesperson for Wellbeing Pharmacies, a member of the Association of Independent Multiple Pharmacies (AIMP)—cuts to pharmacy funding in the United Kingdom and rising inflation have drastically impacted the profits businesses could earn through their traditional business as a dispensary. 

Murphy pointed to the rising threat of online pharmacies which, back in 2015, were already beginning to gain traction on brick-and-mortar businesses. The Covid-19 pandemic acted as an accelerant for this trend, fast-forwarding the digitization of customer retail by as much as 7 years in the UK, based on research by McKinsey. Physical pharmacies also have to contend with the added costs of limited, expensive retail spaces, thus giving their digital counterparts an edge. 

Beyond the pharmacy industry, competition is also cropping up in the form of non-medical retailers who are edging in on pharmacies’ turf by leveraging their significant buying power, shelf space and logistics to offer the same products. In the United States, pharmacies face stiff competition from non-pharmacy businesses like Target, Walmart and Amazon. Perhaps most telling is tech giant Amazon’s introduction of its own pharmaceutical arm which bundles sales of prescriptions with two-day shipping service for Prime members. 

Furthermore, the space to grow through retail is shrinking. Customers increasingly prize convenience, choice and access—segments which physical pharmacies cannot compete on because of limited operating hours and staffing. 

Taken altogether, these statistics and the declining profit margins for pharmacies point to the increasingly-apparent reality that pure dispensing—the work of distributing and selling medicines—is not enough to sustain a business into the future. 

“We knew we were going to have to change how we operate our business, we can’t keep operating to fulfil prescriptions in the same way we always have,” Murphy said at the 2021 Pharmacy Show. “We have to change.” 

For the pharmacy of the future, growth will come from non-dispensary services, the “value-added services” that make a pharmacy more than just a middleman between customers and medicine makers. Non-dispensary services give community pharmacies an edge by transforming their business into hubs for community health and wellbeing—what Claire Anderson, president of the Royal Pharmaceutical Society, calls a “more clinical, patient-facing profession.” 


Pharmacy Services opens a path for the future 


Even before Covid hit the world, pharmacies were filling a crucial gap in the healthcare system. Community pharmacists are able to offer medical advice to customers on not just prescriptions, but also advice for care that would otherwise be inaccessible without the time-intensive visits to a GP or hospital. Furthermore, pharmacists are also deeply embedded fixtures in their local community, making them highly attuned to the particular issues faced by their patients. 

The fact of the matter is that pharmacies cannot compete with digital or big-box chains because they have to manage higher overhead costs and limited inventory space—but they do have an advantage when it comes to medical expertise.  

Pharmacists are trained medical professionals. Through non-dispensary pharmacy services, they can differentiate themselves by providing important, tailored insights and information which regular store clerks or a simple website is unable to. They understand their communities, have the necessary skills, and—crucially—are licensed to offer medical support. 

Non-dispensary pharmacy services also allow pharmacies to make full use of their outlet space, much of which would remain idle if they remain focused on retail sales. The US chain CVS Health recently announced a decision to reduce the amount of floor space dedicated to merchandise to make way for the expansion of their Minute Clinics, where customers can access services like testing for sleep apnea, and wellness programmes like yoga classes.

For example, community pharmacies are currently able to administer vaccination shots for the flu, hepatitis and Covid, among others. Pharmacists also offer medical advice on nutrition, allergies, prescriptions and a range of minor medical issues. Some also offer services like eye and sexual health screening, opening a gateway for patients to access more complex care later on. Across Ireland, pharmacies such as McCauley’s and Meagher’s are stepping up to help their communities through prescription delivery services to ensure patients can still access medications in a safe way. 

Pharmacies can leverage omnichannel strategies to create innovative ways to reach their patients, such as digitised appointments for vaccines, or telehealth or chat apps. These platforms open up new ways for patients to reach pharmacists outside the constraints of opening hours and physical locations, and broaden the number of services that can be offered. 

With omnichannel solutions, some pharmacies could even offer support to “long Covid” patients, those who suffer from symptoms of the illness long after the initial acute stages. Many of these long-haulers are not able to access care through the traditional healthcare system. Pharmacists, on the other hand, are readily accessible in their physical spaces or through telehealth solutions. They can act as an invaluable resource to help patients manage their symptoms, and navigate the complex, ever-changing landscape of new medications for this poorly-understood illness. 

The popularity of non-dispensary services has already yielded plenty of positive evidence. In the US, nearly half (48%) of retail pharmacy customers have used at least one health and wellness service provided by their pharmacy this year, up 5 percentage points from 2019. During the height of the pandemic, a growing number of patients said they consider pharmacists their “most important healthcare professional,” a point underscored by efforts to deputise skilled pharmacists to roll out flu and Covid vaccinations. 


The future is service-led 


Pharmacies have long been understood primarily as retail-led spaces, but this is not a sustainable future. Stiff competition, limited funding, and a changing healthcare landscape will make many of those old models obsolete in the near future. Most importantly, customers want the ability to access healthcare with convenience, and pharmacies can become that crucial step in an overburdened system.

Boost your business with services

HasHealth offers pharmacies the tools they need to take appointments online, send out pre-appointment health questionnaires, manage customer records, and more. Book a call to learn how we can help you deliver a better customer experience.

Images from Laurynas Mereckas, Dima Mukhin, andTbel Abuseridze. 

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