API to reduce discounts
February 3, 2014
Peter Robinson, chairman
of Australian Pharmaceutical
Industries Limited (API), has
outlined the impacts hitting
pharmacies and the consequent
effect on wholesalers in his address
to shareholders at the Annual
General Meeting last Thursday.
Robinson said that a broadly felt
impact of the current operating
environment will be further
reductions in customers’ discounts.
API’s investment in the Priceline
Pharmacy brand and Priceline
Pharmacy network has been
an important positive driver of
income in a “highly challenging
environment,” he said.
“Whilst the price cuts from the
disclosure rules may have saved
the PBS $5 billion, they have
also reduced the pharmaceutical
wholesalers’ revenue by
approximately $450 million
calendar 2013 and we
calculate a further $575
million, to date, in decline
for the 2014 calendar year,”
he summarised.
In spite of these income
challenges, API returned a
statutory net profit after
tax of $24.3m, representing after
adjustment for non-regular items, a
net profit up 9.6% on the previous
year.
Retail sales for Priceline and
Priceline Pharmacy stores,
excluding dispensary sales, were up
9.0% on the corresponding period
last year.
With 370 Priceline Pharmacy
stores in the network and 4.3
million Priceline Sister Club
members, the retail strategy has
delivered a strong result given the
environment, said Robinson.
Ongoing attention will be given to
building the other API brands: Soul
Pattinson, Pharmacist Advice and
Club Premium, all of which grew
through 2013.
The online store is also
anticipated to play an important
role in 2014, he added.
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