Winter Quarterly 2009b

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Transcript of Winter Quarterly 2009b

Winter 2009

Whats inside2 Message from the CEO 3 2009 Fall Business Conference 4 Featured Stores 5 Annual Medicine Centre Fall Meeting 6 uniPHARM Happenings 7 uniPHARM Upcoming Events 8 2010 Fall Business Conference

The Wholesaler PerspectiveYou may be surprised to learn that in excess of 96% of all pharmaceuticals in British Columbia are distributed through the wholesale distribution system. This is one of the highest rates in the entire country. You may not think of the wholesale distribution system as part of your daily routine but heres a snippet of how pharmaceutical wholesale distribution works: Wholesalersarelicensedandregulatedby HealthCanada Wholesalersprocureproductsdirectly fromhundredsofauthorizedsuppliers Wholesalerstakeownershipofproducts untilsoldtopharmacies Wholesalersmanagereturnsandrecalls, provideimmediatecreditandinsome casesholdreturnedyetunexpired productsforthepharmacysupplychain Wholesalersprovidedetailedreportingof allsalesactivitytomanufacturers Pharmaciesbenefitfromconsolidated ordering,shipments,invoicingand paymentfromoneortwowholesalers ratherthanthroughhundredsof manufacturers

When a brand pharmaceutical product becomes genericized, even if the generic is priced at 70% of the brand, uniPHARM loses distribution revenue because of the lower price and because of the lower distribution rates that we receive on generic products versus brand-name products. As you can imagine when the generic is priced at 50% or less than the brand product the distribution revenue falls even further. While the distribution revenue continues to decline, costs for distribution continued to escalate. We are continually forced to amend our distribution processes and make physical changes to our facilities to meet ever-changing Health Canada requirements for GMP. Additionally, we are seeing fuel surcharges, other increased freight costs and rising costs for supplies. The current method of remuneration for wholesalers, being an up charge on the cost of goods, does not allow us as a distributor to pass increased costs onto our customers. You continue to receive the same low up charge that you always receive even though we continue to incur rising costs. Reductions in generic pricing without a compensatory financial mechanism for the wholesalers will reduce wholesaler margins below threshold and could result in service reductions across BC and Alberta. In the future think about the great service you get from uniPHARM and know that as a shareholder you are receiving amazing value from this organization. We are protecting your investment by implementing a variety of measures to increase operational efficiency resulting in reduced operating costs despite the pressures as outlined above.

uniPHARM Wholesale Drugs Board of Directors Ron Gracan President Vince Zuccaro Secretary/Treasurer Michael Allen Director Greg Andreen Director Russell Beales Director John Forster-Coull Director Todd Gehring Director

Theres no question that currently were living in difficult times with respect to pharmacy distribution in Canada. Recent government action in Ontario and Alberta has set the stage for several other provincial governments to act in a similar manner with regards to pharmacy remuneration. This has a direct effect on distribution revenue because most revenue at the distribution level is derived as a percentage of the base cost of the product.

CEOs message

TheHolidaySeasonisfast approachingandthatmeansweare intothelastcoupleofmonthsofour currentfiscalyear,whichendsJanuary 31,2010.Thusfarithasbeenayear filledwithmanyupsanddowns.There areplentyofhighlightsandafew disappointments.Thehighlights includeapositivefinancialpicturefor uniPHARM,growthinourshareholder baseinAlberta,manyexciting programenhancementsandsome amazingopportunitiesforpharmacists withanever-expandingscopeof practice.Thedisappointmentsmainly stemfromthelossofafewkeystores thatweresoldormovedtoanother programandtheeconomic interventionweareseeingfrom variousprovincialgovernmentsright acrossthecountry. Wehaveworkedveryhardthisyearto becomeevenmoreoperationally efficientthanwehavebeeninthe past.Theseeffortshavepaidoffwith reducedoperatingexpensesresulting inamuchbetterearningspicturethan thesameperiodayearago.In particular,wehavereducedthe morgueinventorylevelsconsiderably andreducedouraccountsreceivable reservethroughbettercollections.

TheuniPHARMshareholderbasenow sitsat153with99shareholdersinBC Workwascompletedinmid-October

ontheinstallationofanewHVAC systemintheRichmondwarehouse. Thisprojectwasundertakenasa resultofHealthCanadarequirements formorestringenttemperature control,especiallyonambient temperatureOTCandpharmaceutical products.ThenextmajorHealth Canadarelatedprojectwillbethe ColdChaincomplianceservices TheHST(HarmonizedSalesTax)that includingmappingthewarehouse comesintoeffectinBConJuly1,2010 withthermalequipment. willaffectourbusinessandweare Wehavemadeverygoodprogresson currentlyanalyzingallthefacetsof mostoftheeightstrategicobjectives thistaxchange.Generally,taxwill inourthreeyearstrategicplan.Our increaseto12%onmoreitems(sold firstquarterlyreviewwasheldinlate andpurchased);howeverthe Companywillreceiveinputtaxcredits September.Atthattimesome oncertainpurchases.Systemchanges timelinesforcertainprojectswere willbemadeandnewtaxlineswillbe revisedtoaccommodateother Companydemands.Inparticular, addedtoinvoices. ourCustomerSatisfactionand Forthefourthconsecutiveyearwe EmployeeSatisfactioninitiativesare haveparticipatedintheCanadas50 forgingahead. BestManagedCompanies Onbehalfofallstaffmembersandthe competition.Our2009submission BoardofDirectorsofuniPHARM wascompletedandsubmittedon WholesaleDrugsLtd.wewishyou October23,2009.OnNovember5th andyourfamilyaveryHappyHoliday uniPHARMwasrecognizedasa regionalfinalist.TheCompanys Seasonandahealthyandprosperous NewYearin2010.Wethankyoufor submissionhasbeenforwardedfor yourcontinuedsupport.Asalwaysitis nationaljudgingwiththe announcementofthe2009successful aprivilegetoworkonyourbehalf. companiesbeingmadeinlate February2010. and54shareholdersinAlberta.This putsusinaverystrongpositionto growcommitmentandsolidifyour positioninBCandAlbertaasleaders andadvocatesforindependent pharmacy.Weareseeingsalesgrowth fromexistingstoresandtheoverall projectedsalesforthisfiscalyear exceed$183million.DerekDesrosiers,CEO

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2009 uniPHARM Fall Business ConferenceThe 2009 uniPHARM Fall Business Conference was held from October 7-11 in San Diego. Everyone enjoyed their time in this beautiful city, whether taking time out to explore some of its amazing attractions on their own or enjoying the many group events and activities. Carol was the official greeter at the airport and made sure that everyone arrived on time. From there the group was met by Melissa and Robin from Prime in San Diego. The Business Conference included a welcome reception on the top floor of the Diamond View Tower which allowed the group to experience breathtaking views of the San Diego city skyline, San Diego Bay, and Coronado. The group also enjoyed a San Diego port of call experience on the luxurious California Princess which included a champagne breakfast, the USS Midway (now a floating museum), and Coronado Island. On the island, the group had a chance to experience a walking, bicycle, or segway tour or just relaxing and enjoying the sites that the island had to offer. There was a lot of excitement about the Signature Sponsored Event on October 9,

Champagne Breakfast

details of which were kept under wraps until that evening. Guests were treated to an exciting and entertaining night, as they cooked for their peers during the uniPHARM Culinary Challenge! The conference ended with a gala dinner at Mr. As. This establishment offered the finest cuisine, attentive staff and a view of San Diegos beautiful sunset. Check out the back page of the quarterly to find out more information on the next business conference.

es Where ther

smoke, ther

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Putting the finish ing touches on de ssert for

the culinary chall

enge

Enjoying the cruise aboard the California Princess

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The New Regency #6Twenty-seven years ago Peter Cook graduated from UBC. Three years later he was the manager of the Regency #6 pharmacy on Burrard Street, and seven years after that he decided to take the leap and bought the pharmacy from Jim Sharp and Bob Bedard. This year he took a look around and thought his pharmacy had got a little stale. It was time to clean it up and make better use of dispensary space. His new pharmacy has a nursing room ready to grow with additional patient services, a soon-toarrive part-time ostomy nurse and an expanded, gorgeous dispensary.

Summerland Medicine Centre

Congratulations to Summerland Medicine Centre on their 100 years in community pharmacy. Owner, Carol Wertz and her amazing team celebrated this momentous occasion with their community. Joining in the celebration was Summerland Mayor, Janice Perrino along with previous owner Al Fabbi, his wife Ronda, and Bryan Burdock. The day was jam packed with excitement that included some dazzling deals, a prize wheel, THE roof top prize drop, a proclamation from the mayors office, AND a $1600 scooter grand prize.

Proclamation from the Mayor

Roof Top Prize Drop

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Medicine Centre enjoying the BC Lions game on the Friday evening

Annual Medicine Centre Fall Meeting Saturday, November 5th, 2009On the Friday evening before the Medicine Centre fall meeting it was a night with the B.C. Lions, hosted by Medicine Centre. We wont mention the final score in the game; lets just say it was a little disappointing for most. Nonetheless, it was a fun evening with great company. It was off to an earlier start the next morning for the Medicine Centre fall meeting. Revenue Generation was the main focus of the d