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Pharmacy2U: Daniel Lee and Julian Harrison

Massive expansion is just what the doctor ordered for the world's largest dedicated internet pharmacy

You've had an idea that could revolutionise an industry. The only trouble is, it's illegal. That's exactly what Daniel Lee and Julian Harrison faced when setting up Pharmacy2U, the UK's first internet and mail order pharmacy. And incredibly, they've overturned the legislation forbidding their business from trading.

Back in 1999, sending medicines through the mail was strictly prohibited, but Lee, whose family business was retail pharmacy, and Harrison, a management consultant at Andersen, were sure there was a market there. “I'd been looking into e-pharmacy around the world,” says Harrison.

“We felt we could make a reasonable case to the Royal Pharmaceutical Society of Great Britain (RPSGB) that it could be done in a very professional way. So we built strong business processes to show we could use data powerfully to create an auditable system without the need to see patients face-to-face.”

Convinced they could overturn the 30-year-old regulations, Lee and Harrison launched Pharmacy2U. “We weren't able to get approval to do things before we started up, as that's not how it works,” adds Harrison.

“The RPSGB doesn't approve pharmacies, it regulates. But once we'd launched, they came to visit us and were impressed with the controls and processes, checks and balances that we'd put in place.”

In 2000, the RPSGB amended its Code of Ethics to allow for this business model, and Pharmacy2U was one of the first to be awarded an NHS mail order contract. It's now the UK's largest dedicated internet and mail order pharmacy, safely dispensing private and NHS prescriptions and selling 3,000 over-the-counter products online.

The founders have taken on around £4m in venture capital and private investment to develop the mail order platform, while introducing new processes, such as the electronic requesting of repeat prescriptions.

In 2001, it was chosen by the government to lead a two-year NHS pilot project to develop an electronic prescription system to monitor what's being prescribed and dispensed, replacing the paper-based version.

The government is now looking to roll the system out across the 10,000-strong network of general practitioners, 6,000 of which Pharmacy2U can link to directly. “At the moment, we've got about 250 surgeries connected to our software, and we're hoping to roll that out to around 6,000 over the next two to three years. It's a huge business opportunity,” says Lee. And he's not wrong; the NHS prescription market is worth £10bn.

While this expansion will unlock a massive revenue stream, the founders predict all the major retailers will start to move into this space. Many of them, such as Boots, are already there.

In the meantime, the company is still performing exceptionally well. Pharmacy2U has been profitable since 2003, growth has been 30% year-on-year, and this year's revenue will be £11.5m. Once the electronic prescription system is finally rolled out, there'll be no stopping them.


(will not be published)