Opening Statement by Shane O’Sullivan, Chief Executive of
Healthwave at the Joint Oireachtas Committee on Health and
Children, 5th March, 2015
1. Opening Comments
I thank the Chairman and the members of the Joint Oireachtas Committee
for this opportunity to discuss Healthwave and our experiences of
innovating in the pharmacy industry in Ireland.
2. Background
Healthwave was founded in 2013 with a simple goal: to provide universal
access to the best value in medication and care.
Healthwave is a retail pharmacy business that caters for all state drug
schemes as well as private patients who pay in full for their medication.
Since our launch in 2013, we already have 10,000 customers from all
over Ireland who regularly travel the length and breadth of the country to
benefit from our service, care and value proposition.
The private pharmacy sector in Ireland has traditionally been extremely
opaque, with pricing information near impossible to come by. The most
basic change we made when launching Healthwave in 2013 was to
publish our prescription medication prices for anyone to see. The fact that
complaints were made by pharmacy owners to the regulator on foot of
this action is testament to the reluctance of the industry to inform
patients. Thankfully, the pharmacy regulator has moved to support this
transparency and in 2014 published guidance encouraging other
pharmacies to follow suit. [1]
Just last week I received a receipt from an elderly gentleman. He had
been charged €100.29 at another pharmacy for two boxes of olanzapine,
a drug for mood disorder. Our price: €19.08. (figure 3) He will save
80%, or almost €1000 per year.
People don’t have that kind a money to throw around.
From my own personal experience working as a community pharmacist
in various stores across the country, I witnessed first hand, patients
ceasing medication due to cost.
It was these stories that led me to launch Healthwave and with it, a new
model of pharmacy, one with universal access to transparent pricing and
an unrivalled level of care and convenience.
In our first year, we saved our patients over 1 million euro. Not only did
we save the consumer hundreds of thousands of euro, but we have also
saved the State significant expenditure on medication as a result.
It is worth recognising that the state plays no role in the prices
pharmacies charge private patients. However, I hope to demonstrate that
by reducing medication costs and improving adherence in private
patients, the state ultimatley benefits with substantial savings.
3. A new subscription model of pharmacy – HealthPass
As stated, within 18 months, we had over 10,000 customers from all over
Ireland subscribing to our HealthPass service, which is a new business
model in the Irish pharmacy sector. We operate this business model to
provide the best care and value to the consumer. For a small annual
subscription fee (€25), customers become members of HealthPass and
enjoy a number of benefits.
• Access an average 50% savings on their monthly prescription
medicines
• Free home delivery nationwide
• Free house calls from our mobile pharmacist team
Our retail prices for medicines are substantially lower than other Irish
pharmacies and are closer to those seen in Northern Ireland. How do we
do this?
Very simply, we provide the best value medication in 2 ways:
1. We take a lower margin on medications and pass better pricing
onto consumers.
2. We dispense a high proportion of generic medication;
Healthwave sources its drugs from the same Irish wholesalers as other
pharmacies.
Generic medications are identical versions of a branded medicine that are
released once the branded medicines’ patent expires. Generic medicines
are both cheaper to source and to supply.
According to the most recent ESRI report [2], generic usage in Ireland is
low relative to other member states at around 50%. Healthwave’s generic
usage currently stands at 90%.
The Health (Pricing and Supply of Medical Goods) Act (2013) [3]
introduced the concept of “interchangeable medicines” which was a huge
leap forward in enabling pharmacists to reduce the cost of their patients’
prescriptions.
Some real life customer examples:
A patient on cardiovascular medications attending a pharmacy in
Ranelagh and paying the maximum €144 per month reduced their bill to
€49.78 with Healthwave.
A breast cancer patient was paying €94.55 in a large pharmacy chain for
anastrozole and calcium supplement. Her bill reduced to €19.08 at
Healthwave.
*Receipts supporting these examples are included for the committee’s
information. (figure 1)
*prices quoted for Healthwave include membership fee of €2.08 per
month
4. Mobile pharmacist & home delivery
Patient safety is at the heart of everything we do at Healthwave. Current
legislation requires a face-to-face consultation between a pharmacist and
a patient. While this makes sense from a patient safety point of, a trip to
the pharmacy is not a simple task for many citizens. We introduced
mobile pharmacist to our members free of charge in February this year.
Using our software systems, our team of pharmacists can conduct their
consultations in patients’ homes with remote access to any clinical
information they may require.
Anyone, anywhere can now access affordable medication.
In 2014 we also launched Ireland’s first nationwide home delivery
service. Safety is our priority with this service again. Our technology
enables us track medications from the moment they leave our store to the
time the patient signs for their delivery. We have now delivered
medication to every county in Ireland.
5. Our ethos - we are focused on health, not beauty
Traditional pharmacies rely heavily on beauty & cosmetic products to
bolster their revenues. At Healthwave, we kept our focus simple: we are a
healthcare company. We improve health through unrivalled care.
Our product offering is focused on wellbeing and the three key
categories: nutrition, skincare and medicines. By removing the cosmetic
component of the pharmacy, an area with premium display areas and high
value inventory, we were able to reduce our overheads considerably.
6. We place a large focus on technology
We have invested heavily in software development, which allows us to
streamline and improve many outdated and legacy processes. From
inventory management, to remotely accessible patient records for our
mobile pharmacists, technology is at the core of our business. We will
continue to invest heavily in both products and job creation in this area.
7. How Healthwave is helping the state
Ireland operates a state subsidised drug scheme called the Drugs Payment
Scheme whereby the maximum any individual or household will pay for
medicines in any calendar month is capped. The current cap is €144.
Once the cap is reached, the state funds the excess.
By reducing the cost of prescriptions Healthwave has brought many
patients below the current Drugs Payment scheme threshold.
The most recent PCRS report shows that 25% of persons eligible for the
Drugs Payments Scheme reached the monthly threshold resulting in a
claim the the HSE. [4] In our first year only 1% of our members hit the
€144 limit.
One patient had been paying the maximum €144 per month for pain
medication “Lyrica” in a national pharmacy chain. Healthwave reduced
her bill to €64.85, a saving both her and the state.
*A receipt supporting this example is attached for the committee’s
information. (figure 2)
8. Non-adherence and it’s cost to the state
Medication adherence is a measure of whether a patient is taking their
prescribed drugs as per the doctor’s instructions.
The World Health Organisation (WHO) estimates that medication
adherence rates for chronic conditions in developed countries are at 50%.
[5]In other words, half of prescribed medications are not taken.
Non-adherence leads to increased costs in the health system. Problems
with patient adherence to medication were shown to be responsible for
33.3% (range 20.9% to 41.7%) of preventable drug-related admissions to
hospital. [6]
In patients with chronic disease such as hypertension and
hypercholesterolaemia, non-adherence can increase the risk of stroke four
fold and the risk of death three fold. [7]
In the UK it is estimated these admissions alone cost the NHS up to £200
million per year. [8]
Two key factors affecting adherence are cost and convenience.
It is estimated that the cost of drugs can reduce adherence by between 10
and 20%. [6]
Healthwave has lowered the cost of medications by an average of 50%.
We have customers from as far as Donegal and Dingle accessing
medication they otherwise could not afford.
The ease of access to a pharmacy can also negatively impact adherence
with studies estimating that patients living in highly rural areas were 64%
less likely to visit a pharmacy than those in close proximity to one. [10]
One patient from Artane in Dublin travelled by bus across the city to
personally thank our team. The week before she read about our service
she had decided to stop taking her blood pressure and cholesterol tablets
in order to pay her ESB bills. However, with Healthwave’s prices she can
now afford both.
With our mobile pharmacist and home delivery service, we will ensure
this lady, and all of our other members have an uninterrupted supply of
these vital medicines without the worry or multiple bus journeys.
9. Closing
In closing, the pharmacy industry is one which has seen little innovation
in 30 years. Healthwave is demonstrating that the cost of medicines can
be dramatically reduced and adherence improved through business model
innovation and technology .
Thank you for your time. I will be happy to answer the Committees
questions on these and other issues, in greater detail, during the course of
the meeting.
Appendix:
Figure 1
Figure 2:
Figure 3:
References:
[1] Pharmaceutical Society of Ireland. (2014, April) [Online].
http://www.thepsi.ie/gns/pharmacypractice/PracticeUpdates/PricingTransparency.aspx
[2] ESRI, "Ireland: Pharmaceutical Prices, Prescribing Practices & Usage of
Generics in a Comparitive Context," 2013.
[3] Department of Health. (2013) Health (Pricing and Supply of Medical Goods) Act
2013. [Online]. http://www.irishstatutebook.ie/2013/en/act/pub/0014/
[4] PCRS. (2012) Statistical Analysis of Claims and Payments 2012. [Online].
http://www.hse.ie/eng/staff/PCRS/PCRS_Publications/PCRSannreport12.pdf
[5] World Health Organisation. (2003) Adherence to long term therapies - evidence
for action. [Online].
http://www.who.int/chp/knowledge/publications/adherence_introduction.pdf
[6] Doreen Matsui, "Medication adherence issues in patients: focus on cost,"
Clinical Audit, 2013.
[7] Avery AJ, Slavenburg S, et al. Howard RL, "Which drugs cause preventable
admissions to hospital? A systematic review. ," Br J Clin Pharmacol, vol. 62, no.
2, pp. 136-147, 2007.
[8] Ali S, Na B, Whooley MA. Gehi AK, "Self-reported medication adherence and
cardiovascular events in patients with stable coronary heart disease: the heart and
soul studyS," Arch Intern Med, vol. 167, no. 16, pp. 1798-1803, 2007.
[9] National Institute for Health and Clinical Excellence. (2009) Costing statement:
Medicines adherence: involving patients in decisions about prescribed medicines
and supporting adherence. [Online].
https://www.nice.org.uk/guidance/cg76/resources/medicines-adherence-costingstatement2
[10] Jamie Pearce, Tony Blakely, and Karen Witten Rosemary Hiscock, "Is
Neighborhood Access to Health Care Provision Associated with IndividualLevel Utilization and Satisfaction?," Health Research and Educational Trust,
2008.