Pharmacy Practice Module 3

  • PEST analysis helps leverage internal strengths for a competitive advantage.

  • PEST stands for Political, Economic, Social, and Technological.

  • First step in PEST analysis: Define the subject you're trying to achieve.

Clearly Defined Subject:

  • Analyze overall business plan (strategic vs. marketing).

  • Launch a new product.

Identifying Factors:

  • Dig deeper into PEST factors.

  • Example: Political factors - focus on specific policies directly impacting pharmacy practice, like minor ailment prescribing guidelines.

Data Collection and Analysis:

  • Collect and analyze data on relevant sub-factors which will lead you to be able to

  • Identify Opportunities and Threats.

PEST Factors in Detail:
Political:

  • Laws (federal, provincial), regulations, legislations.

  • Drug policies are relevant (e.g., avoid stocking drugs not provincially covered).

Economic:

  • Economic growth, inflation rates, interest rates are very relevent.

  • Impact of drug patent expiration on generics market (e.g., including more generics).

Social:

  • Population growth, age distribution (seniors vs. families).

  • Work attitudes and cultural factors.

Technological:

  • Healthcare technology, devices, vaccines, technological procedures.

  • Example: E-prescribing and its implications for pharmacy technology.

External vs. Internal Factors:

  • PEST focuses on identifying external factors impacting internal factors.

  • Understand external environment to identify opportunities for competitive advantage.

Opportunities and Threats Examples:
Political:

  • Opportunity: Expanded scope of practice (professional billing opportunities).

  • Threat: Pharmacist discomfort with prescribing for minor ailments.

Economic:

  • Opportunity: Professional fees and services.

  • Threat: Public/private plans cutting reimbursements due to economic constraints.

Social:

  • Opportunity: Continued demand for pharmacist consultation.

  • Threat: Other healthcare professionals feeling pharmacists are "imposing."

Technology:

  • Opportunity: E-prescribing.

  • Threat: Pharmacy lacking financial resources for new technology.

Strategic Planning:

  • Defining where you're going, how you're getting there, and when you're getting there.

  • First Step: Scan/Analyze the environment.

Environmental Analysis:

  • Physical location accessibility (subway, parking, wheelchair access).

  • Competitors: Number, distance, services offered.

  • Demographics: Age, income level.

Market Segment vs. Market Niche:

  • Market segment: Umbrella term (e.g., younger population).

  • Market niche: More specialized (e.g., LGBTQ+ college students).

  • Example 2: Market segment: senior population; Market niche: seniors with a specific rare disease.

Interpreting Data - SWOT Analysis:

  • S: Strengths - Unique business characteristics.

  • W: Weaknesses - Areas for improvement.

  • O: Opportunities - External factors to capitalize on.

  • T: Threats - External factors that could harm the business.

Example Pharmacy targeting seniors:

  • Strengths: Multilingual staff, wheelchair accessibility, pharmacists with geriatric care specialization.

  • Weaknesses: Lack of funds for new technology, insufficient trained staff.

  • Threats: Competition from chain pharmacies, changes in regulations.

  • Opportunities: Nearby doctor's office/senior home for collaboration.

Setting SMART Goals:

  • Specific: Answers Who, What, Where, When, Why.

  • Measurable: Criteria for tracking changes and results.

  • Achievable: Resources and skills available.

  • Realistic: Motivation to achieve; makes sense for the business.

  • Time-bound: Reasonable timeframe.

Financial Statements:

  • Provide a picture of how your business is doing over a period of time.

  • At least look at your financial statements once a year, at least on a yearly basis.

Key Financial Statements:

  • Balance Sheet: Snapshot (static).

  • Income Statement: Dynamic (video).

  • Cash Flow Statement.

  • Financial statements are reviewed by owner, investor, creditors, pharmacy owners.

Balance Sheet:

  • Snapshot of financial position at a specific time.

  • Components: Assets, Liabilities, Shareholder Equity.

Shareholder Equity:

  • Equity = Assets - Liabilities

  • Net worth of the company from the owner's perspective.

  • Retained Earnings: Earnings reinvested into the company.

  • Dividends: Payments to owners/shareholders.

Assets:

  • Things you own

Current Assets:

  • Can become cash short term.

  • Cash.

  • Accounts Receivable (money owed to you which might include, money from, patient, or from private insurances).

  • Inventory (stock).

Liabilities:

  • Money you owe others. Current Liabilities: Accounts Payable (money you still owe to wholesalers, to suppliers, etc.), Salaries.

Fixed Liabilities:

  • Bonds Payable:

    • Long-term liability representing money owed to bondholders/investors.

    • Bonds Borrowed: money that requires principle amount plus interest paid upon maturity date.

Income Statement:

  • Dynamic view of financial activity over time.

Key Components:

  • Revenues.

  • Cost of Goods Sold (COGS).

  • Gross Profit.

  • Operating Expenses.

  • Net Income/Loss (Net Income = Total Revenue - Expenses).

Cash Flow Statement:

  • Inflows and outflows of cash.

  • How pharmacy generates and uses cash.

Financial Ratio Analysis:

  • Understanding the company's performance and the higher the ratio, the better.

  • Profitability Ratios: The ability to generate profit.

Gross Profit Margin:

  • \frac{Revenue - COGS}{Revenue}

  • Expressed as a percentage.

Net Profit Margin:

  • \frac{Net Income}{Revenue}

  • Expressed as a percentage.

Return on Assets:

  • Ability to generate profits using assets.

  • \frac{Net Income}{Average Total Assets}

Return on Equity:

  • Ability to generate profits using equity.

  • \frac{Net Income}{Average Owner's Equity}

Liquidity Ratios:

  • Ability to meet short-term debts/liabilities and telling you how the company can convert the assets to cash to easily pay off bills.

Current Ratio:

  • \frac{Current Assets}{Current Liabilities}

Quick Ratio:

  • \frac{Current Assets - Inventory - Prepaid Expenses}{Current Liabilities}

  • More focused assessment of immediate ability to pay bills.

Turnover Ratios:

  • Number of times inventory is sold in a year.

  • \frac{COGS}{Average Inventory}

  • Low indicates inefficiency; High is good, but too high risks drug shortages.

Average for prescription drugs is 12 while front store are 4 - 6

SMART goal acronym:

  • Specific.

  • Measureable.

  • Achievable.

  • Realistic.

  • Time Bound.

Inventory Management:

*Managing the Equipment and system of the establishment.
*Monitoring and recording Temperature. Range should be in 2 and 8.
*Having backup plans in fridge for medication.

Different Ways to Manage and Control the Inventory.

Visual Method:

  • Manually checking shelves, which is very inefficient.

Periodic:

  • Physical stock count every month or every few months.

  • Not very efficient.

Perpetual Method:

  • The most efficient.

  • Using automated system that provides ongoing count of stock, suggest order quantities on minimum and maximum data. (Bar coding).

Other Types of Tips for Inventory Management.

  • Managing Claimed prescription is super popular in stores with many people.

Policies Review of supplier policies.

Controlling the stock to minimize losses and thefts.

  • Implementation of cameras and alarms (if financial aid is provided.)

  • locks.

  • mirrors.

  • Clear Lunch bad.
    (Relocating the Inventory from the counter to under the counter to minimize theft.)

The responsibility of inventory destruction is by the pharmacist.

The witness must be a pharmacidt, or a practitioner, or the intern, technician
Report losses to health Canada in 10 days.

Difference between missions and visions
The manager makes sure of protecting patient safety and meeting the standards of professional practices.
COA make sure to evaluate stores policies and procedure for legal implementation. Designated Manager