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Initiating a Pharmacy Business

Written by Peter Barron

Peter Barron has served as a change agent in the professional practice of pharmacy in New Zealand. He believes that pharmaceuticals are a cornerstone of healthcare, and he is passionate about ensuring that patients are receiving all of the benefits that modern medicines have to offer. He gains satisfaction from helping patients understand their medications and solve problems. He also helps patients understand the role of vitamins and minerals in preventing complications and ensuring good health. Peter is also involved in the profession at the community level through involvement in the Otago District Health Board, the South Island Pharmacists Association, and the Dunedin Intravenous Organisation. While he is a strong advocate of patient care and advancement of pharmacy practice, Peter is also a pioneer and innovator, introducing new models of pharmacy practice into New Zealand by opening a chain of pharmacies. He shared these thoughts about pharmacy in New Zealand, purchasing his first pharmacy, and expanding into the online realm of pharmaceuticals in this column with DELTA Rx:

Please describe the overall “climate of pharmacy” in New Zealand – perception, economic issues, challenges unique to the profession.
New Zealand has a system of 21 District Health Boards (DHB) who distribute most of the health funding for their local population. The representatives on these boards are publicly elected; I am one such representative for the Otago District Health Board. We provide health services—community and hospital—to about 180,000 people with an annual budget of around $NZ500 million ($US290 million).

It is critical to understand that New Zealand (NZ) essentially has a fully socialized medicine supply system, meaning every NZ citizen is entitled to “free” medicines funded via the government through taxation. New Zealand has a pharmaceutical management agency called Pharmac who has been successful in negotiating with pharmaceutical manufacturers to keep costs reasonable. The downside of this system is a lack of choice for patients and health care providers, and reluctance from manufacturers to bring new products into the market.

While many in our profession feel that pharmacy has not been treated well by the DHBs, I do not share this view. Our problem as a profession is that our view of what we do and the view of the customer and the payer are different. Most pharmacists perceive that the payer doesn’t understand the profession, and that this is their problem and not ours. My experience, however, in communicating with others has taught me that if the person receiving the message doesn’t understand the message, it is your responsibility to deliver the message in a more effective manner.

The reality is that we are never going to be paid more for simple dispensing. The DHBs are willing to pay for value-added services and are giving our profession room to expand. The challenge facing most of my colleagues is accepting the fact that they must be willing to change the way they practice rather than cling to the past. The changes that must happen will also be driven by the international shortage of pharmacists. As a profession, we will simply have to work smarter; this is why pharmacy automation is so vital to our future.

Identify and describe the issues and thought process that led you to consider and purchase your first pharmacy, and the implementation of your online pharmacy.
It has become clear to me over many years that while community pharmacists dream of working differently, the reality is that as soon as we walk into our pharmacy, we are at the beck and call of our customers. We start the day, week, or year with innovative and enthusiastic plans and then simply spend our day with our head down and “bum-up” dealing with our patients’ day-to-day issues. Unlike almost every other profession, we take little control over our workplace—we are reactive rather than proactive.

For many years I dreamt of the pharmacy profession evolving to work differently. In a moment of frustration, I decided that if the profession wouldn’t change, I should establish a team and create a pharmacy environment where they could serve as leaders within the profession. I persuaded a group of my academic colleagues at the School of Pharmacy, University of Otago, to throw in some money so that we could purchase a pharmacy that I would manage.

Having bought the pharmacy, I decided that we needed a marketing campaign. The “experts” wouldn’t or couldn’t create what I wanted so I decided I would write my own material and voice it. A local radio station suggested we broadcast a 30 minute, live radio show each week, and so the Radio Pharmacist ( was born. The program delivers authoritative health information in a simple manner and covers a broad range of topics including head lice, migraines, cholesterol, melatonin, and many others. Radio remains a powerful vehicle; I have become well known as the Radio Pharmacist and established a strong listening audience.

Having achieved our early goals it was time to spread our wings and buy more pharmacies. This included recruiting a number of my more entrepreneurial former students who didn’t have much capital but needed jobs and a future. Having established a small chain of pharmacies with the Radio Pharmacist voicing all of the advertisements and desiring to move strongly into natural medicines, it seemed sensible that we needed some vertical integration to increase our offering to both our walk-in customers and to attract new on-line customers especially in the rural areas. In parallel with this development we purchased New Zealand’s original on-line pharmacy or as a promotion vehicle and to add value to our business.

Has the endeavor been successful?
We are still in the early phases of the project and I am sure that we can do better. The key point is that the site is established and live. The next steps are to build on what we have accomplished so far.

My Radio Pharmacist show is posted on the website and is referred to frequently by listeners who have missed the show live or who want to listen again can do so. This has been very useful as often listeners will phone one of our pharmacies and ask about something that I spoke about last week or the week before.

What do you see as the ongoing challenges and how can they be overcome?
With this type of website you are putting yourself and your reputation on the line. Keeping the site current is a key to credibility. The information presented must also be simple and easy to understand. Effective time management is a constant challenge. The Radio Pharmacist is only part of what I do, yet it could easily consume all of my time. Management skills are critical when trying to accomplish multiple tasks.

While quality patient care is the ultimate goal of your pharmacy practice, what is the primary goal of the business and what are some of the next steps involved in its growth and development?
The focus has to be to profitability and to add value to our associated businesses. We have already effectively used associated in-store advertising as a means of successfully attracting advertising dollars from our key suppliers. With the huge increase in public internet use, there is the need for credible, trustworthy information. There is increasing evidence that the public is searching the internet for health and drug information, and then turning to pharmacists or their websites to verify the information before they purchase. One of the goals is for to be one of those trusted reference sites.

Does your web site allow you as a pharmacist to join a globalized economy? How?
Absolutely, customers now have choices and options. The website allows individuals anywhere in the world to seek truly independent advice from sources of their choosing. Eighty percent of the business that we do on are with clients from the United States (US). Customers realize there is huge price differential within the international pharmaceutical industry. Some identical products cost up to 6 times more in the US than in countries like New Zealand for the same manufacturer’s products, and customers are alert to this.

Do you have any concluding comments on developing a business?
It’s critical to use multiple sources to reach out to potential customers. The use of radio, website, and multiple stores has allowed our business to grow and flourish, and there are other sources that can also help to increase profitability.