Source: Pharmacy Business News (November 1, 2001 issue)

An overwhelming majority of pharmacists in the United States object to drug companies advertising prescription medicines direct to consumers, according to the latest "Pharmacy Business News" Trends Survey. However, they also believe that Government will pave the way for more of it in the next 5 years.

A vast majority of pharmacist (83%) are adament that pharmaceutical companies should not be allowed to promote Prescription Only Medicines through direct-to-consumer (DTC) advertising, according to "Pharmacy Business News's" Quarterly Business Survey for the second quarter. Only 10% said they had no objections to DTC advertising, while 17% remained undecided.

Pharmacists on the west coast held an even stronger view on the subject, with 96% objecting to DTC advertising. In the Midwest, the number was 90% and on the east coast 85% objected. The results come shortly after the American Pharmaceutical Industry (API) announced they were planning to hold talks with the American Medical Association (AMA) on the matter (PBN July 29, p32).

The survey also showed that almost three quarters of the panel were convinced that DTC promotions would effect the pattern of medicine usage. Only 16 per cent felt it would have little affect. Rather than helping patients to engage in an informed discussion with their physician regarding their medication, 80% of surveyed pharmacists believe that DTC would lead to increased confusion. Only 16% said it would not. And 90% believe it would encourage patients to ask their physician to switch their medication. 6% saw no indication for this.

Only a small minority (21 per cent) believed that DTC would provide patents with a useful source for health information, an argument regularly used by it's proponents. A vast majority of the panel (71% ) felt it would not. However, just under half of the panel (46%) also think that the Government is going to allow some greater form of DTC advertising within the next five years. Another 22% did not know and 31% are sure the Government will limit DTC ads as is currently done.

Meanwhile, a large number of pharmacists have not yet embraced internet technology at work. The most common use of the internet was to send and receive e-mails, which around half (47%) of the panel did. Using the internet for other business related means was rare. 82% of the panel said they had never used the internet at work to place an order with their wholesaler. Almost two-thirds (61%) had not searched the world-wide-web for health or medical information.

News and business information fared slightly better with only 55% stating that they had not used the internet for this particular purpose at work. Cautious appears to be the word summing up pharmacists' mood ahead of the RPM (resale price maintenance) hearing in December.

Sixty-three per cent believed that the courts will support the Fair Trade commission's view and that RPM on medicines will be scrapped. Thirty-four per cent said it would stay. Pharmacists in the southwest were the most pessimistic (92 per cent), while their eastern counterparts were almost evenly split on the subject, with 54 per cent saying RPM will go.

The second quarter saw significant rises in sales, with 47 per cent of the panel recording an increase. Only 17 per cent saw their sales drop, leaving a balance of plus 30 (up from plus 17 during the first quarter). Those in the south did particularly well (a balance of plus 42), while Midwestern pharmacists did not appear to benefit from the retail boost, recording a balance of zero. The number of NHS prescriptions continued to grow, with 71 per cent of surveyed pharmacists recording an increased volume.

Only 7 per cent saw the number of scripts decrease. Script increases were particularly common in the Northeast, where 87 per cent reported an increase and no-one saw a fall. Sales of OTC medicines continued to do well, with 59 per cent stating that sales were up, compared with 7 per cent who experienced a drop.

The survey also showed, that despite warnings to reduce levels of generic products prior to the introduction of reference pricing, 42 per cent did increase the value of their stocks. Pharmacists in the West and south led the way in this respect, with 52 per cent reporting increased stock values. Overall 14 per cent of the panel had reduced their stock and another 42 per cent made no changes.

Small outlets with less than $350,000 in turnover showed above average percentage in increases of stock values (57 per cent). There was slightly better news with regards to profit margins. While they clearly did remain a concern, the usually negative balance improved by six points. Thirty-seven per cent said they had seen their profit margins decrease, while 7 per cent recorded an improvement.

Sales in cosmetics seemed to recover to a certain extent, with 19 per cent of the panel recording improved sales. As is hardly surprising, it was predominantly in the larger stores, with a turnover of more than $500,000 that cosmetics were starting to do better. One third of pharmacists still saw decreasing cosmetic sales, leaving a balance of minus 15 (up from minus 24).

Pharmacists seemed to remain confident in the face of adversity, with 35 per cent saying they felt more positive regarding their future. Only 15% felt things would get more difficult for them, while almost half of the panel thought there would be no change. As is usually the case, the panel where slightly more optimistic about their own future than that of retail pharmacy as a whole.

As for the longer term, the panel was not quite as optimistic. Asked about their business prospects over the next 12 months, 30 per cent felt optimistic, just 2 per cent more than those being more pessimistic. The usual suspects -- babycare, toiletries and fragrances -- continued to perform badly. Not surprisingly, sales of analgesics and vitamins also seemed to be slowing down.

Photo-processing saw an upward trend, with 41 per cent saying that sales were increasing, and only 12 per cent witnessing a drop.With 42 per cent stating that there had been no change, the positive balance for photo-processing more than doubled to plus 29, up from plus13. A quarter of the surveyed pharmacists had been approached with regards to selling their business. The percentage was particularly high (50 per cent) for business with a turnover of more than one million dollars. Sixty per cent of all the pharmacists approached had decided to reject the offer.