Collaborative pharmacy agreements: innovative business partnerships for improved growth and better health outcomes

Samuel Keitaanpaa

Samuel Keitanpaa represented Charles Darwin University at the Y20 Summit.

Abstract

Paradoxical differences between the business of pharmacy in Australia and internationally offers the opportunity for construction of programs which can be beneficial to both groups. There is the potential for pharmacies in Australia to partner with and mentor pharmacies internationally to up skill workers, improve business management skills and improve the way that international pharmacies provide primary health care. The formation of these relationships would require international partnership to address the existing issues of international intellectual property laws, trade regulations and existing health infrastructure and policies. Appropriate funding models and oversight would offer a new area for pharmacies in Australia to receive additional revenue as well as promote that ability for pharmacists to provide services outside of the fee-for-supply models. This will help meet national health policy objectives, enhance structural reform of national and international health policy as well as meet the focuses of the 2016 G20 summit.

Policy Recommendations

This project recommends the creation of collaborative partnerships between Australian pharmacies and target pharmacies internationally. This would involve:

-        Collaboration between governments to identify areas of policy or structure of health policy which need reform to facilitate greater collaboration on health issues internationally and promote the role of the pharmacist in primary health and medication use.

-        Streamlining importation of Australian Medicines for pharmacies under this project in order to service the communities with high quality medicines at a reduced cost and curb the decline in medicine exports from Australia.

-        Proper regulation and oversight processes to ensure the quality of the program and that KPI’s are being met on both ends of the agreements.

Introduction

Historically the role of the pharmacist has been one which focused on the compounding and supply of medicines and this role has now become integrated into health systems and policies across the world. In many countries the role of the pharmacist has moved away from simply a supply model to recognising the role of the pharmacist in delivery of primary health services such as health education, medication management and delivery of clinical services such as vaccination and medication reviews. This change is also occurring in Australia but the pharmacy industry is concurrently experiencing decreased revenue from federal government policies to decease the annual cost of medicines to the wider community (Quilty). Internationally, pharmacies in some areas, particularly in impoverished and rural communities, still function on a business model only focused on the supply of medicines which limits the potential benefit of a pharmacist to these communities (Hassali, Azhar, Hussain). Similarly, decreased regulation and oversight of pharmacies in these areas also leads to higher rates of counterfeit medications and improper medicines use (Fang, Ossola). This article describes the potential for the development of relationships between pharmacies in Australia and internationally to benefit both industries and to improve the level of care that can be given to each community.

Pharmacy in Australia

Provision of high quality primary healthcare is a primary objective of Australia’s health care policies and pharmacists play a major role in this as they are the most accessible health professional and the only one who does not charge a fee for service. Changes to reduce the cost of Pharmaceutical Benefit Scheme (PBS) medicines to the federal budget are expected to save $3.6 Billion over the next five years (Australian Department of Health). This represents a significant decrease in the revenue of community pharmacies as supply of PBS medicines have historically been the cornerstone of these business and a majority of their revenue. Initiatives to move away from the reliance on PBS medicines for income and towards reimbursement for services are being introduced but progress is slow and uptake is hindered by the low return on these services and the decreased revenue already affecting pharmacies (Annabel). Similarly, the Australian medicines industry has seen a 30% decrease over the previous financial year which has been primarily attributed to decreased demand for Australian manufactured medicines both in Australia and internationally (Medicines Australia).

The National Medicines Policy (2000) sets the objectives for medicines usage in Australia and requires all stakeholders to work towards ensuring the safe and effective use of high quality medicines and the viability of a responsible medicines industry (Commonwealth of Australia). Novel initiatives need to be investigated to support pharmacies to move towards new business models which reduce the reliance on PBS medication revenue and promote primary health care and medicine management in the community. Similarly, programs are needed which increase the competitiveness of Australian medicines and promote their use nationally and overseas.

Pharmacy Internationally

Pharmacies in impoverished areas internationally are faced with the opposing problems. In some countries the role of the pharmacist is not as well recognised as in Australia and the people operating these business may also not have the same level of training and regulation as pharmacists in Australia (Fang, Azhar, Hassali). The medicines supplied through these pharmacies may not be as highly regulated and have less oversight on their quality at the time of sale (Ossola). The viability of low cost generic medicines may also be reduced due to intellectual property laws in these countries (Shetty, Penfold). This could decrease the ability of these business to provide the same high level of medication management, advice and primary health care that is seen in Australian pharmacies.

The use of generic medicines underpins the financial viability of supplying medicines to people faced with socioeconomic hardships (Rana). The World Health Organisation (WHO) has partnered with several countries to establish a standard for generic medicines and Australia’s Therapeutic Goods Administration (TGA) has rigorous testing and reporting that must be undertaken before a generic product may be sold. There have been reports of generic medicines supplied to some countries being found to be of lower quality and containing less, or none, of the primary ingredient than stated(Mathur, Ossola). Some countries also face the issue of the affordability of generics in general (Houston, Fang). While generic medicines are intended to be produced at a lower cost, due to the primary research and development already being undertaken by the originator company, there are examples where the pricing of generic medicines has been inflated (Houston). This creates an environment where pharmacies, especially those in impoverished areas, could be utilising generic medicines which will not have the intended clinical effect.

Structure of the project

Collaborative agreements

This project suggests the creation of collaborative relationships between pharmacies in Australia and those in other countries, particularly in areas of high need. In Australia this would require the selection of pharmacies to participate in the program through mechanisms such as a tender process. As mentioned previously one of the main risks to pharmacy in Australia is the decreased financial viability of the business given the reduction in revenue from PBS medicines. Ideal pharmacies would be those who operate in a community where there are few alternative pharmacies to access, such as rural Australia, or where increasing the capacity of a pharmacy to deliver alternative services would benefit the community, such as an area with high need for public health campaigns such as a town with a high rate of obesity or smoking. The federal government can create fiscal measures (such as direct funding or tax incentives) to allow the pharmacy to employ more staff to support the partner pharmacy internationally. The ancillary benefit is that any additional workload that these staff can facilitate would improve the capacity for the pharmacy to undertake other services for their community, many of which offer increases revenue options to further support the business.

Internationally the project requires countries to target areas at most need for improved pharmacy services. This could be a community where there is little support from a pharmacist or primary health service or one where there is significant chronic or preventable disease burden where primary health intervention and support would improve morbidity. The target area may require the establishment of a new pharmacy or could have an existing pharmacy which requires more support to assist the community. Given the widespread uptake of IT, much of the communication and support can be done via email, skype or through teleconferences, services which are increasing in accessibility to even the most remote areas.

Streamlining medicine usage

The second key barrier is to facilitate medicine supply under existing intellectual property laws. The project proposes the supply of Australian generic medicines to ensure quality and affordability of medicines for the target community as well as to better support the Australian medicines industry. Intellectual Property (IP) laws regarding the use of generic medicines can vary between countries but many are based off the World Trade Organisation’s (WTO) Trade-Related Aspects of Intellectual Property Rights (TRIPS) agreement which lays out a framework for protection of intellectual property such as proprietary molecules. While the TRIPS agreement does not specifically outline how countries should structure their intellectual property laws, signatories are expected to follow the intention and spirit of the agreement (World Trade Organization). This is significant as while the TRIPS agreement outlines the need for protection of commercial interest when dealing with IP such as medicines, it also stipulates that the needs of the public must also be considered. Furthermore, there are ‘flexibilities’ which are built into the TRIPS agreement to allow for legislation which recognises the need to balance the rights of the IP holder with the needs of the public.

Another area of the TRIPS agreement which also supports this is the permissibility of ‘grey’ importation or ‘parallel imports’. This is where a trademarked product is exported from a country where the IP owner has a patent to a country where the IP owner does not have a patent (World Trade Organization). The TRIPS agreement does not prohibit parallel imports and states that the signatory members can choose how parallel imports fits in to their own national policies. Combined with flexibility provisions this may provide a framework for nations to create legislation to allow for limited importation of lower cost, high quality Australian generic medicines under the collaborative agreements. This in turn would promote competition internationally as local manufactures would be under pressure to improve the manufacturing processes and pricing of their generics to match the expected quality that consumers under the project would then have from future suppliers.

Creating performance indicators

Creation of performance indications is an integral part of ensuring that the project is meeting desired outcomes and involves recognising the different focuses of international health policies. Australia’s health policy places great value on primary health care and access to care overall and is part of a planned health economy where as other countries such as the United States of America follow a market driven health economy where the demand for services influences their supply and there is less involvement from the government. While one system cannot be said to be better than the other, collaborative projects which recognise the business aspects of health care as well as the need for targeted support can give better understanding of the strengths of both systems and promote structural reform to benefit the health economy and improve health outcomes.

Desired outcome measures should include aspects which reflects increased access to services, an idea which is universal to both approaches. This would include measures such as medicine uptake, vaccination rates or referrals to doctors or health centres. Alternatively this could be specific output of services such as a set number of hours for public health initiatives or number of medication reviews. To ensure transparency, both partner pharmacies would be subject to reviews by the relevant government to ensure that the project is working towards its intended goals.

Conclusion

There is a need both in Australia and internationally to increase the role of the pharmacist and the quality of the services they can offer. In Australia new services which move away from the reliance on federally funded medicines towards business models which deliver health services will not only increase the health of the community but also significantly reduce the cost of the PBS. Internationally there is a need for higher quality pharmacy services in areas where the use of lower quality medicines is common and where the pharmacist role is one of selling medicines with little support to the consumer. These problems require novel and innovative solutions such as international collaboration between pharmacists to learn from each other and grow their business in a way that supports the goals of their respective government public health policies. While there are some areas such as IP rights and the differing focuses of governments on health, these can be managed through negotiation between trade partners and respecting that improving the health of those that need it the most is not just a benevolent goal but also improves the productivity and health of workforces.

Reference List

Anderson, C., Bates, I., Beck, D., Brock, T. P., Futter, B., Mercer, H., . . . Yonemura, A. (2009). The WHO UNESCO FIP Pharmacy Education Taskforce. Human Resources for Health, 7(1), 45-45. doi: 10.1186/1478-4491-7-45

Annabel, B. (2016). Living in the 'red ocean'. Australian Journal of Pharmacy, 97(1148), 42-43.

Azhar, S., Hassali, M. A., Ibrahim, M. I. M., Ahmad, M., Masood, I., & Shafie, A. A. (2009). The role of pharmacists in developing countries: The current scenario in pakistan. Human Resources for Health, 7(1), 54-54. doi:10.1186/1478-4491-7-54 Retrieved from: http://human-resources-health.biomedcentral.com/articles/10.1186/1478-4491-7-54

Commonwealth of Australia, Australian Institute of Health and Welfare. (2014). Australia’s health 2014. Retrieved from: http://www.aihw.gov.au/publication-detail/?id=60129547205

Commonwealth of Australia, Department of Health. (2000). National Medicines Policy. Retrieved from: http://www.health.gov.au/nationalmedicinespolicy

Hassali, M. A. (2011). Challenges and future directions for public health pharmacy education in developing countries. American Journal of Pharmaceutical Education, 75

Houston, A. R., Beall, R. F., & Attaran, A. (2016). Upstream solutions for price-gouging on critical generic medicines. Journal of Pharmaceutical Policy and Practice, 9(1), 1-3. doi: 10.1186/s40545-016-0064-8

Mathur, A., Bate, R., Jin, G.E. (2014, September 17) India Must Fix Its Drug Quality Problem. Forbes [online].

Retrieved from: http://www.forbes.com/sites/theapothecary/2014/09/17/india-must-fix-its-drug-quality-problem/#1f043a325636

Medicines Australia. (2015). Australian Medicine exports drop by 30 per cent in one year. 

Retrieved from: https://medicinesaustralia.com.au/media-release/australian-medicine-exports-drop-by-30-per-cent-in-one-year/

Penfold, E. (2015, August 6). Explainer: the problem drug patents pose for developing countries. The Conversation. Retrieved from: http://theconversation.com/explainer-the-problem-drug-patents-pose-for-developing-countries-45667

Quilty, D. (2014). Pharmaceuticals, Pharmacists and profits: The Pharmacy Guild perspective. Australian Prescriber, 37(5), 146-147. doi: 10.18773/austprescr.2014.057

Rana, P., & Roy, V. (2015). Generic medicines: issues and relevance for global health. Fundamental & Clinical Pharmacology, 29(6), 529-542. doi: 10.1111/fcp.12155

Shetty, P. (2012, March 21). Novartis challenges India's patent law. Nature News [online].

Retrieved from: http://www.nature.com/news/novartis-challenges-india-s-patent-law-1.10262?referral=true

World Health Organisation. (2016). Essential Medicines and health products: Regulation.

Retrieved from http://www.who.int/medicines/regulation/en/

World Trade Organisation. The Agreement on Trade-Related Aspects of Intellectual Property Rights. Retrieved from; www.wto.org/trips

World Trade Organisation,. Fact Sheet: TRIPS and Pharmaceutical Patents. Obligations and exceptions. Retrieved from; www.wto.org/trip