The founder of a new ‘hub’ dispensing facility geared towards independents has said his business model can help pharmacies “transform” their offering.

Daniel Lee – who founded online dispenser Pharmacy2U in 1999 before turning to the emerging hub and spoke market – told the Pharmacy Magazine podcast: “For me it’s fundamentally about transforming the dispensing-led operation, reengineered and transformed to one that is clinical services-led.”

The HubRx facility, which is being developed in anticipation of legislation changes the Government wishes to push through, will help pharmacies increase their profits despite contractors’ concerns around giving up their dispensing margin, Mr Lee told Pharmacy Magazine editor Richard Thomas. 

He said many pharmacists can be resistant to change, describing them as “very entrenched in their localities and business model”.

“We’re not saying [hub and spoke] is for everyone, it’s a choice for those pharmacists that want to improve.

“I think burying your head in the sand and feeling you can just rely on dispensing income… is untenable.”

However, he acknowledged that in-pharmacy automation may be a viable option for some: “I wouldn’t say HubRx is the only answer.”

Asked to elaborate on a previous claim that a pharmacy passing 70 per cent of its dispensing volume to HubRx could bring in an extra £52,000 a year, Mr Lee said the gains would be made through efficiencies in staff time and in extra capacity to offer more paid-for NHS and private services: “Most pharmacies aren’t meeting their NMS quotas… there’s money on the table.” 

He said that critics of hub and spoke and his business model have exaggerated the impact it could have on the wider sector, particularly on the £800m worth of retained margin that is allowed in the contractual framework: “I don’t think it will have an impact on retained margin because it’s across 11,500 pharmacies that are in the industry.” 

HubRx will in the first instance seek to sign up a “small number of pharmacies” for whom it will be purchasing medicines, “around 200”.

He said there has been a “really good early response” from independents, with many expressing an interest in signing up if legislation changes are passed and when the HubRx facility in Leeds comes online (“we are expecting handover in summer of this year”).

He said the “unique” aspect of the HubRx model will be the “transparent pricing – that’s passing the purchase margin through to the independent pharmacist,” something he claimed would boost profits and free up capacity. 

Asked whether the model could endanger service provision at spoke pharmacies if the hub encounters difficulties, he answered that if there are glitches or stock shortages at the hub the stoke will be able to “communicate that to the patient so they know what’s happening… that’s the beauty of the model”.