Terry Maguire analyses the details of the Hub and Spoke model
Clinical role vs supply function
From the start of my career, the transformation of community pharmacy from a medicine supply service to a clinical/public health service has been a central theme and a key aim. Many colleagues disagreed and some were happy telling me so.
I remember, as a young pharmacist, discussing the benefits of ranitidine over cimetidine at a local pharmacy meeting when a colleague disparagingly commented that all he needed to know about a medicine was its cost.
That was disappointing to hear, even though it got a laugh. For me, at least, it was rational and logical that unless a clinical future was claimed to replace our focus on supply, the societal value of community pharmacy would eventually be questioned. And when government questions the value of a profession or service, it usually means disinvestment. In the late 1970s, the main changes had started to appear. The pharmaceutical industry increasingly did the manufacturing and later the Specials Labs did the awkward stuff, so what would a community pharmacy do when, in time, advances in IT and robotics would allow for greater mechanisation of the supply function? That time has now arrived; so have we made the transition?
Enter clinical/public health services
Where the introduction of clinical services to add value has been glacial, I think we have reached a point in the UK where momentum is picking up and it is now possible to generate decent profit from government-funded clinical services; UTI, EHC, sore throat, smoking cessation, as profit from supplying medicines diminishes.
Health Service challenges, resulting in less access to doctors and hospitals, also offer significant opportunities for private pharmacy services; travel vaccination, weight loss, and ear wax removal are the most lucrative, but there are many more. Younger independent contractors, especially those with low dispensing pharmacies, are already mining these opportunities, generating decent income, building profitable businesses and adding value back to the communities they serve.
The challenge is how this can be done in very busy dispensing pharmacies. Manpower and mechanisation are the solutions, but how? A pharmacy might wish to focus on services but staff become a rate-limiting step claiming, justifiably so, that work capacity and professional responsibilities to ensure safe dispensing limits involvement in service delivery. Hiring additional staff is expensive and might not be financially justified. So we need a technology solution.
Hub and Spoke
Some multiple groups have already made the in house investment in ‘Hub and Spoke’ (H&S) technology. A multiple with 100 pharmacies centralises the medicine assembly process to a central warehouse facility — the Hub. Once assembled, labelled and bagged the medicines are returned to the branch — the Spoke — for supply to the patient.
Before October 2025 in the UK, only multiples with a single limited company could shift the work around the company’s pharmacies. A group of independents could not do this due to legal restriction both in medicines legislation and Health Service legislation. A change to the law last October now allows different companies to take part in a Hub and Spoke arrangement and this will be a game changer in the UK.
Unfocused progress
The application of cutting-edge IT and robotics promised a solution but until now, it has never been realised across the pharmacy network. Less- complex approaches have not been very successful. Investment in a standalone pharmacy robot, for example, has not to my knowledge allowed any pharmacy to downsize its workforce or extend its non-dispensing activities. It just seems to have grown the dispensing aspect of the business; more prescriptions, more MDSs and more time ordering and trying to find prescriptions. It’s understandable that for those genuinely seeking to change, it can be frustrating being dragged down by capacity and workload issues.
H&S has been for a long time a key aspect of how some multiple groups address the problem of capacity and it is now gathering pace as a driver of change across community pharmacy. H&S is being discussed not as an add-on to existing business operations, but as a total rethink of the way pharmacy businesses will operate in the future.
It’s already happening
HubRx and Pharmacy+Health in Leeds offer a vision of how independent contractors might use IT and robotics to get over the operational restrictions inherent in the current supply function, allowing the time and flexibility to take on the more lucrative service provision at scale. The HubRx vision is to roll their service, for a fee, out to independents, who will then focus their business to generate additional profits from NHS and private services.
MediCare Group in N Ireland is investing in a similar operation for its 52 pharmacies. This is a bold investment with significant risk, but I believe it is the right one at the right time. MediCare will use the FlowRx technology building a state-of-the-art Hub in Belfast that will process 3,000 prescription packs an hour (it only works for complete or original packs).
I calculate that the proposed MediCare Hub in Belfast will have at least twice the capacity needed to serve its own pharmacies. That means that long-term, like HubRx in Leeds, MediCare could also offer the service to other contractors at a fee.
I must emphasise that MediCare have not said this, but it would be transformational for the community pharmacy network in N Ireland if they saw this as part of the plan. Independents accessing the Hub would get the necessary capacity to deliver the additional services and establish clinical/public health services at the core of our businesses.
And then there’s the ‘but’
I accept that such a fundamental change to pharmacy day-to-day operation and practice will likely bring unintended consequences, including potentially negative ones, and these will need to be considered and addressed.
The Hub and Spoke development puts an operational layer between contractors and wholesalers and I’m unclear what that will mean. The hub will charge a fee for assembling and returning the bagged medicine. In the Leeds model, this is 50p per item and less than half of the current dispensing fee — 5,000 items a month assembled through this system would cost £2,500 in fees, but would attract £7,000 in dispensing fees, so £4,500 still going to the business and more free time to invest in clinical activities.
Independent pharmacies becoming Spokes in a Hub and Spoke system will certainly reduce stock-holding, which will be a direct benefit to the business initially, but what about margins on medicines supplied in the Hub? I would imagine that those who own and run the Hubs will be operating on the scale of a small wholesaler and therefore benefiting significantly from the margin on medicines supplied. Will the Hub be willing to share this with the Spokes? There is still in the UK a potential to make some margin, especially on generic medicines, and this is not an insignificant part of current profitability, so it will be difficult to give this up.
There is a more fundamental question: Will this model spell the demise of the community pharmacy? If Amazon, for example, were to adopt the Hub and Spoke model, they could very quickly consume businesses and run a supply chain that would not need any physical community pharmacy Spokes. Existing community pharmacies would become virtual postcodes in a H&S warehouse and patients would simply get their medicines delivered to their door. Some might argue that this would require legislation changes, but then that was done for H&S development when it suited government.
Progress only marches forward and now that H&S is with us, it will be even more urgent that pharmacies start investing in a clinical future, otherwise they might soon find that the supply service they held onto so dearly over the years will very soon no longer sustain their businesses. H&S is potentially the biggest driver for change I have seen in my years in pharmacy, so it seems that if I want to remain relevant and continue to exist in my community, it will be more important than ever that I get more clinical, which also means I really need to know more about medicines than their cost.
Terry Maguire owns two pharmacies in Belfast. He is an honorary senior lecturer at the School of Pharmacy, Queen’s University Belfast. His research interests include the contribution of community pharmacy to improving public health.
