NHS reforms - good news for some
Norman Niven’s medical packaging firm Protomed is expected to reach an all-time high this year
Many doctors, medical professionals and lobby groups have been voicing their concerns over the government's controversial health reforms, which will hand increasing power to the private sector. But change offers opportunity and one person keeping a close eye on the situation is pharmacist Norman Niven, who ackowledges the NHS, which costs the economy £90 billion a year, will inevitably become replaced by private services, heralding significant financial opportunities for the pharmaceutical industry in particular.
A former BUPA director, Mr Niven, 56, is the founder of early-stage medical packaging company Protomed. He says: "Buying healthcare will become as common place as buying any other commodity. The country is being challenged to defy the laws of economics. Even with the greatest will in the world, it's impossible to maintain the status quo while spending significantly less. There will be changes in the NHS which will catalyse a tsunami of reorganisation and offer massive opportunities for private health companies.
"This is the nudge pharmacists need to raise their game - a chance to revolutionise the pharmacy business model to make sure they don't just survive the next three years, but grow. There's a chance for pharmacists to future-proof themselves by becoming less reliant on income from the NHS. The sooner they do that, the greater slice of the private supplier pie they can capture."
Mr Niven, who lives in Cheadle, Manchester, and has spent his entire 30-year career in the healthcare sector, believes that by shifting their income away from the NHS, pharmacists should aim to gain 50 per cent of their revenue from fee-for-service means by 2016.
In an attempt to cut the massive budget deficit, a major reorganisation of the NHS is likely to see the abolition of primary care trusts as GPs take over responsibility for £80 billion NHS budget. More than 50,000 doctors, nurses, midwives and other NHS staff are reportedly due to lose their jobs.
"This will be known as the decade when health reforms polarised the UK population," adds Mr Niven. "Patients on lower incomes will have to accept waiting longer for NHS treatment and an even more limited 'menu' of options to choose from. Those with money to spend will enjoy a greater choice. Sadly, as the private healthcare providers flourish, the NHS will become a last resort."
Yet Mr Niven is unlikely to be too concerned. His company supplies both the NHS and private sector by helping care homes, hospitals and members of the community administer medication more efficiently. It is expected to reach "an all time high" in the next 12 months.
Protomed's flagship product is Biodose, an advanced medication management system. It is a form of packaging which enables pharmacists to supply prescriptions - in liquid and tablet form -- in personalised, pre-portioned sealed pots or trays. Mr Niven believes the device could save the NHS "hundreds of millions of pounds.
"Drug wastage in the UK is a massive problem and all of a sudden, it's becoming a very live issue as the health service looks for ways to cut budgets. We probably waste around £3 billion of our budget every year on patients who don't take their medication correctly, and out of these patients, many will have poorer health outcomes and have to go into hospital. So the overall cost is actually very substantial. We are now in an environment where resources are increasingly limited. Anything that can be used to make the available money stretch further is extremely important."
There are around 35,000 people using Biodose in the UK. It is exported to countries including Germany, Switzerland, Belgium, north America and Canada.
And it seems Mr Niven is not alone in seeing the potential. Protomed has received close to £2 million worth of investment from some of the industry's most accomplished players. Tony Heywood, the former CEO of Four Seasons Health Care, the leading operator of UK care homes, is one of 17 individuals to hold a stake in the Cheshire-based firm, which founded in 2007 is valued at an estimated £7.5 million. And County Durham's Quantum Pharmaceutical recently invested £1.5million for a minority holding. Hardly surprising considering the global pharmaceutical industry is estimated to reach $1.1 trillion by 2014.
"There is already a quiet business revolution under way in the UK which will put the pioneering pharmacies well ahead of their competitors both here and in Europe. The future for these pioneers is telehealth, telepharm and telecare - enabling the relatives or carers of patients to monitor, by mobile phone or text message alerts, that the patient is taking their prescription effectively. This means patients will recover quicker, cutting the national drugs bill by £4 million a year."
But he warns that pharmacists need to be careful about the commercial avenues they venture into. "As in any sector, uniqueness commands a premium. Growth has to be planned and funded and overtrading can be a problem. Also, those pharmacies that decide to wait until the market is more established will find it very difficult to jump on the bandwagon."
The changing market will unquestionably have an effect on the pharmaceutical sector, which has traditionally been deemed a safe haven for companies and investors. "Over the past three years we have seen that nothing is a safe haven," says Mr Niven. "If you want to put money into a really safe haven then you should put it into care of elderly. We are all getting older and as we get older, we need more medication and healthcare support. So, if you're money is in there, you really can't go far wrong."
Mr Niven studied pharmacy at Birmingham University before opening his first pharmacy in Stockport in 1985. He set up Surgichem five years later, developing the UK's leading medication management system Nomad. Surgichem was later bought by Bupa and he became a director of Bupa Care Services. In 2003, he left Bupa to focus on Protomed.