Originally from our sister publication, CanadianHealthcareNetwork.ca.
Just a year after the Ontario government gave the green light to remote dispensing machines, the fate of the controversial technology is up in the air with the bankruptcy of PharmaTrust.
PCAS Patient Care Automation Services Inc., PharmaTrust Corp and Pharma Trust Med Services Inc. filed for bankruptcy on June 7, 2012 and the first meeting of creditors will be held later this month.
Four years ago, great fanfare accompanied PharmaTrust’s introduction of the MedCentre automated pharmacy dispensing system in a pilot project at Sunnybrook Hospital in Toronto.
And all the ducks started lining up to support the potential proliferation of the machines, particularly in hospitals and remote areas.
Ontario’s Bill 179, passed in December 2009, contained provisions to enable prescriptions to be filled by a machine without the physical presence of a pharmacist.
The regulations allowing dispensing machines to operate throughout the province came in March 2011 and six months later the Ontario College of Pharmacists (OCP) granted the first approval for a pharmacist-controlled, user-interactive remote dispensing unit.
Then in the fall of 2011, PharmaTrust got a $300,000 fund from the National Research Council of Canada’s Industrial Research Assistance Program (NRC-IRAP) to develop a personal medical management system called MedHome.
But by March 2012, all was not well at PharmaTrust. According to court bankruptcy filings that month, the technology companies were in the “pre-revenue stage” and had run out of start-up capital. Attempts to raise further money through private placement of common shares and convertible debentures were unsuccessful and the company had trouble meeting payroll and overhead costs.
At the time, the company hoped for a restructuring or sale of assets and sought protection. Despite potential deals in the works with U.S. pharmacy chains contemplating buying MedCentres, PharmaTrust was forced into bankruptcy in June.
What went wrong? Amr Bannis, president of TCE Group Inc., which makes and markets automated non-dispensing pharmacy kiosks, suggests that one of PharmaTrust’s problems was the inability to get buy-in of pharmacists or customers.
“Pharmacies in Canada are more service oriented and so the market isn’t yet ready for dispensing machines,” he says. “Pharmacists don’t like them because they see these machines as threatening to their livelihood.”
Another possible factor is that PharmaTrust’s automated dispensing machines couldn’t deliver on the promised savings to the healthcare system.
“These machines have a high cost of operation at a time when the government is reducing spending,” says Bannis, adding that although the MedCentres were touted as a service solution for remote areas, small communities don’t generate enough prescriptions to cover the cost of buying and running the machine
Despite PharmaTrust’s losses, however, Bannis doesn’t believe it means the end of automated pharmacy machines. “The rise of automation will continue,” he says.