Dispelling Pharmacy Hub and Spoke Myths

The Department of Health has announced its decision to extend hub and spoke dispensing so it can take place between different legal entities.

Contrary to popular opinion this isn’t just a way for larger chains with automated hubs to provide smaller chains and independents with “prescription assembly services” Louise Laban, Sales and Marketing Director at Centred Solutions, explains that there is a myriad of hub and spoke dispensing options now available for pharmacies of all sizes.

There is a common misconception that only one model of hub and spoke exists. That’s the model of a huge central hub, which is incredibly expensive to set up and needs vast warehousing space. Based on this it has long been argued that hub and spoke is only an option for the biggest pharmacy groups doing incredibly high volumes. The reality is that this could not be further from the truth. Time and technology has moved on and there is already a whole host of options available with the number of solutions only set to grow further in light of the new legislation changes. At Centred Solutions we have been at the forefront of this technology and during this time we’ve become only too aware of many of the myths surrounding hub and spoke, something that the Department of Health impact assessment did little to dispel last year.

Look at the bigger picture

The first thing we need to do is stop focusing purely on hub and spoke and focus instead on how pharmacies centralise and automate their original pack dispensing for repeat prescriptions. This is something that takes up 70% of the dispensing process in an average pharmacy store. It’s a logistical and administrative process that is ripe for automation and which could save an average store more than four hours every day.

At Centred Solutions we are working with a number of pharmacies who have automated their original pack dispensing process with our FLOWRx technology. None of these pharmacies were among the pharmacy businesses cited in the original DoH impact assessment for the consultation. This impacted the assessment’s view on how accessible a hub and spoke model actually was. Perhaps most concerning were the figures and formulas used as a baseline throughout the assessment which said pharmacy businesses processing less than 250,000 items per week, 12m per year, may lack the scale to invest in their own hub and could instead benefit from proposals to outsource hub operations. In our experience, this is not the case.

Correcting inaccuracies

It’s therefore positive that the Department of Health has since met with the team at Centred Solutions as well as one of our FLOWRx hub customers and acknowledged the evidence we provided in their response to the consultation:

“One view was that there would be greater and faster uptake than predicted, because of other benefits not mentioned and because we had not taken into account the latest technological developments which make the model relevant and beneficial to smaller pharmacies.”

Comments on this theme included:

• as few as 3 spoke pharmacies could benefit from hub and spoke models
• more than 60% of prescriptions could go through the hub
• viable hubs operating now are processing as little as 45,000 prescriptions a month
• set-up costs for hubs and spokes would be lower
• hub turnaround times can be quicker than 2 days

The consultation response goes on to say key points that emerged from these meetings include the fact that a much larger number of pharmacies (of all different sizes) are already using hub and spoke dispensing than is acknowledged in the impact assessment. It also goes on to provide the example of an independent pharmacy group using hub and spoke where pharmacists spend 50% more time with patients in store since adopting the model. The hub dispenses 68,000 items (109,000 packs) per month with 5 staff working full-time and operates on a next day model of dispensing.

The DoH have decided to retain the core of their original assumptions in the impact assessment as it regards this as presenting the middle ground between two opposing positions submitted as part of the consultation. However it is reassuring that they have not discounted our perspective and expertise as they “acknowledge [our] insight is due to a different experience from a technological innovation perspective”. They have also committed to carry out a review of the market on the impact of competition to explore whether our position is emerging as the most likely one.

We hope this review will further illustrate our point. The pharmacies we are working with are already benefitting from cost efficiencies, stock saving, better buying power, increased staff satisfaction and the ability to provide revenue generating services without increasing staffing levels.

Our FLOWRx suite of solutions offers a range of technology that automates the repeat prescription dispensing process and importantly it is affordable, scalable and even movable.

As the assessment pointed out last year, hub pharmacies are likely to have a higher volume of dispensing so are more likely to be able to negotiate better purchasing terms. This is exactly why it is advantageous for pharmacies to establish their own hub, whether that be in group or as a smaller group of pharmacies or independents who come together to set up a joint hub. Outsourcing and using fewer, larger scale hubs could result in charges for independent and smaller multiple pharmacies and there is the potential that the benefits of volume buying will not be passed on to spoke pharmacies.

The more hubs the healthier the market. With the new legislation, hub and spoke dispensing will be possible between two or more pharmacies on a local level without any automation, with assembly or part dispensing carried out manually. There is also the option to go one step further and introduce hub and spoke dispensing between a few higher volume pharmacies with the option to automate.

Pharmacy Automation By Centred Solutions

At Centred Solutions, our advice to pharmacies who are not considering automating their original pack dispensing process would be to act now to champion the change.

Book a free consultation with us today to discuss how you could automate your original pack dispensing process. By starting your conversation today you will be one step ahead when these changes become law in January 2025. Failing to act now means that you risk getting left behind.