This is Part 2 in a series that we have elected to focus on the pharmaceutical industry as it pertains to describing the pharmaceutical industry, the supply of drugs and the development of some intelligent measures focused on providing Canadians a healthcare system that is one of the best in the world. Care has been taken to make certain the information shared is accurate, the opinions are those of the author and do not reflect the opinions, or the philosophies of staff or management. The series is provided to inform and stimulate discussion among Canadians who are concerned about our drug supply system; how we use this valuable tool and how we manage the consumption of this therapeutic tool. Access to healthcare for all Canadians is a philosophy that people in other parts of the globe have identified as characteristically Canadian not so different than those other Canadian attributes such as our game is hockey; the maple leaf and our reputation for being “those nice, polite people living in the frozen north”.
We’re Only 42 Million
Our previous post introduced the problems Canada is experiencing with many, long standing shortages of prescription drugs, with a description of the many elements involved in the development of the current shortage that we continue to experience. Now we add to this already complicated supply formula the demands of the Canadian consumer who continue to look for cheaper alternatives to existing drugs, better drug coverage via provincial or private drug plans and access to new, innovative drugs. These are slowly becoming incompatible desires as we continue to experience these drug shortages and now, a new phenomenon – the discontinuing of drugs in Canada, at least partly due to the lack of a profitable market as being experienced by some of the current drug manufacturers. It’s not uncommon to have a manufacturer remind us that Canada is in fact a small market at only 42 million people.
To understand drug coverage in the large sense, you need to understand how pharmacists are remunerated and how pharmacies earn their revenues. These are separate and distinct mechanisms, which will certainly surprise a good number of readers. No, pharmacists are not paid by some level of government, provincial or federal. Nor are pharmacies paid by any government. Pharmacies are companies, free enterprise entities that operate to create profits. These profits had better exceed expenses or shareholders and investors in that business are going to be very displeased. And if it’s Joe or Josephine Pharmacist who has scraped together all their earnings, borrowed money from Dad and maybe a brother or two, there better be some profit in that business or there will be no repayment of those loans and no return on the investment either. Those dollars put together by the enterprising pharmacist who goes into business with the idea of putting his or her ideas and philosophies to work and to earn a decent living for himself and his family. Okay, maybe there are those few individuals who are actually of the mind to build a business empire by creating a chain of community pharmacies across the land. They are out there but for now, let’s just consider the prior model and assume that the pharmacist who owns his/her own pharmacy is what we’ll keep in mind for purposes of this explanation.
Until about 1983, the independently owned pharmacy with a few larger privately owned chains, dominated the pharmacy landscape. Then in 1983, a change in legislation occurred, which previously said (and I am summarizing), that only a pharmacist could own a pharmacy and if it had a corporate structure as many then did, 51% of the shares had to be owned by the pharmacist. The critical change was that a pharmacist no longer had to have controlling ownership and in fact, a pharmacist didn’t even have to be a part of the corporate administration.
Big Box Pharmacy
With that change, the door was opened to any company such as the larger grocery chains, Walmart, Zellers, even a supposedly wholesale company like Costco, could own and run a pharmacy. Of course, if any company was to have a pharmacy department they had to have a licensed pharmacist to supervise and usually manage that department, and also had to abide by the same laws as did the independently owned pharmacy, which was set out then by the Alberta Pharmaceutical Association (APhA) in Alberta. Each province has its own licensing and standards body, which are now called a “College of Pharmacists”, except in Quebec where it is termed a “Guild” but with the same responsibilities. The organization responsible for advocating for the pharmacist is a separate organization, which in Alberta is called the Alberta Pharmacists Association (RxA).
Consumers Are King
Not sure who first coined this phrase, maybe it was Sam Walton of Wal-Mart fame, but you can be certain it was a retailer who promoted this philosophy of customer service. No different than the “customer is always right”, “the customer is number 1” and many, many statements like these that promote the importance of meeting the needs of the customer and that nothing else is important. This is what small and large retail has been built on since at least the American Revolution.
What with the market now filled with large corporate behemoths such as Walmart and Safeway and Shoppers’ Drug Mart the consumer certainly is now King! What with all the choices, the competition, the combined pressures from manufacturers to consume more and more product and the power of mass merchandising giants like those mentioned, who get bigger and bigger every year. Don’t think this doesn’t include prescription medications along with all the non-prescription medications, the health and beauty items and all manner of sundries, hardware, consumer electronics, computers, and the list goes on. The consumer has never seen it so good!
Oh, there are a few independently owned pharmacies such as ourselves, still in the mix but statistically, the independent pharmacy has lost ground to the corporate stores, in some jurisdictions they have been decimated – brought down to zero. In the U.S., where they experience market changes at least ten years ahead of Canada, the independent pharmacy in many centers have become a thing of the past. Even those stores that represented multi-generation ownership – many are gone, what with the introduction of the Walgreens, Rite-Aid and Wal-Mart, just to name a few. They have successfully created a new generation of “consumers” where the price is king and customer service only if you can find an associate! And healthcare, well maybe not so much, after all there’s the internet and you know you can find any kind of information on the World Wide Web. So who needs a close relationship with a healthcare professional or two?
But that’s a completely different story.