The time for growth is now
Former National President of the Pharmacy Guild of Australia, community pharmacy group owner.
With over 25 years in the sector as both a pharmacy owner and highly respected industry champion, George Tambassis has an unparalleled overview of Australia’s pharmacy landscape and first-hand insight into how community pharmacies can succeed in a time of seismic change. We caught up with George to talk about how disruption and evolving customer demands are bringing new challenges as well as huge growth opportunities for all pharmacies, from small, single practices to large groups.
The future of Australian pharmacy is bright
George believes the sector is buoyant and confident of its future thanks to a number of factors, not least pharmacy’s superb response to Covid-19. The pandemic naturally caused a lot of people to return to Australia’s 5,000-plus pharmacies and appreciate their value to their communities with fresh eyes, he explains.
“The Australian Government is finally working out that the public can get valuable services from pharmacies without having to wait for a prescription.”
Pivotal sector changes
Pharmacy is also in a good place thanks to a better deal with government. Under his leadership as its longest-serving president, the Pharmacy Guild of Australia (the Guild) signed the pivotal seventh community pharmacy agreement (7CPA) with the federal government in 2020. This five-year deal introduced a dispensing guarantee for the first time, which has given pharmacies secure knowledge of their remuneration until 2025. The government also made some key decisions that will open up the pharmacy sector and bring new opportunities for growth. Crucially, pharmacies will be allowed to supply and administer all Covid vaccines going forward, including the new bivalent vaccines from Pfizer and Moderna that target multiple variants.
“The Australian Government is finally working out that the public can get valuable services from pharmacies without having to wait for a prescription,” George explains. “In Queensland and New South Wales, we have trials allowing pharmacies to prescribe and administer medicines that used to be only in the doctor’s domain.”
Evolving customer demands and competition bring new challenges. The market has changed radically for community pharmacists. They used to be able to rely on a loyal, fixed customer base, but now people are more transient and tend to shop around. Pharmacies today must have the skills, technology and knowledge to collaborate with customers and other health professionals, too. “Doctors writing prescriptions used to tell the pharmacist what to do,” George says. “But now they encourage us to collaborate and ask questions to get the best solution for the patient.”
Meanwhile, domestic and global competition is growing, with national pharmacy groups expanding while online giants like Amazon take market share in the supply chain. There’s more potential competition on the horizon, too. Supermarket groups in Australia, for example, aren’t currently allowed to own pharmacies by law, but this could change in future – something the Guild is keeping a close eye on.
The way pharmacies respond to change will be critical. “You’re only good as the last patient or customer that you’ve served.” George explains, meaning pharmacies must maintain high standards of care and take the opportunity to grow their services. "If your KPIs are at a high level, you’ve got nothing to worry about, but if you’re not open long enough, or you’re not delivering the services customers want, you’ll be in trouble.”
Disruption opening new growth
Change always presents new opportunities, and George is confident that pharmacies face a bright future if they pursue the nine key growth pathways that the Guild identified in its Community Pharmacy 2025 Strategic Plan:
- Provide broader health services such as medication management.
- Offer services from various health professionals in community hubs.
- Introduce digital technologies across all services.
- Leverage physical distribution networks to offer more products.
- Use automation to reduce manual processes.
- Collaborate with health providers and other sector partners.
- Provide in-home medication and other services.
- Make efficiencies in back-office operations.
- Employ brands to add value to products and services.
The big opportunity
The big opportunity is service expansion. While there are always opportunities to grow through innovation and entrepreneurship, in George’s analysis “the really big opportunity is the scope for practice expansions.” Many more vaccines being administered in pharmacies, for example, will be a huge opportunity for the sector to expand its services, but only if pharmacies are ready for the extra demands. More training will be needed to make sure that businesses have all the skills required, as well as investment in new facilities like private consulting rooms.
“The UK is a few years ahead in terms of the services and prescription-free medications that pharmacies can offer, but that’s changing,” George explains. “The Australian Government is finally waking up to what community pharmacies can do.”
Access to capital
Capital is always a critical success factor for a small business, particularly when they want to expand their services, make acquisitions or renovate their facilities. But this could be the biggest potential growth limitation for community pharmacies, George believes, particularly if they can’t get enough funding from a traditional lender like their bank. This could be compounded by a lack of specialist business knowledge. “Finding the right capital is a hard-core business decision,” George explains. “Most pharmacists are pretty good at employing other pharmacists, but they don’t have much experience of raising capital. You only learn that on the job.”
“It’s really important that pharmacies can move quickly to seize opportunities,” George says, which is something that was illustrated powerfully during the Covid pandemic. After sustained lobbying from industry bodies, the Australian Government allowed pharmacies to administer Covid vaccinations from June 2021. This meant that pharmacy businesses across the country suddenly had to be ready to accommodate a huge increase in customers. “Unless you’re quick and nimble, you could miss out on this kind of opportunity,” George warns.
Seize opportunity with the right working capital
The key benefits of TradeBridge finance are its simple application and quick approval process. This is crucial for pharmacies, George says, because a quick decision gives them the freedom to move fast when opportunities appear. “Things can happen so quickly when you’re in a small business. You have to be able to seize opportunities when they present themselves,” he explains. “I’m going through the process with TradeBridge right now. It literally took just 14 days to get the finance approved, and I’m not necessarily the quickest!”
A new funding model
George heard about TradeBridge when he was looking for capital to finance a renovation in his pharmacy group. Trusted colleague Ian Strachan (owner of UK pharmacy group Strachan’s Chemist), recommended TradeBridge because he has been a client for many years. The company is a leading, specialist provider of pharmacy finance in the UK, but “what they offer is something new and unique for pharmacy in Australia,” George explains. “The more I learn about the way this funding model works, the more comfortable I get.”
“The most important thing they look at is your income from the PBS (Pharmaceutical Benefits Scheme),” he continues. “Once they’ve checked that, it doesn’t matter how big or small you are, it’s a multiple of that number that governs how much you can get.” In his analysis, this would be useful for pharmacies of all sizes but “could really level the playing field for smaller operators who have fewer financial options than bigger players.”
“What TradeBridge offer is something new and unique for pharmacy in Australia. The more I learn about the way this funding model works, the more comfortable I get.”