The deal comes less than two weeks after the Medical Board of Australia issued revised telehealth guidelines.
Wesfarmers is preparing to fork out about $135m to become the new owner of telehealth business InstantScripts.
The move launches the company headlong into a battle with Australia’s other retail behemoth Woolworths to see who will own Australia’s emerging private telehealth and direct to consumer virtual care market.
News of the deal comes just weeks after the Medical Board of Australia released new national telehealth guidelines – the first revision in a decade.
The retail giant will acquire InstantScripts through its wholly owned subsidiary Australian Pharmaceutical Industries (API) and plans to integrate the business into the Wesfarmers Health division.
Late last year, Woolworths paid a reported $20m for online pharmacy wholesaler and retailer SuperPharmacy, after failing itself to acquire API a year before.
Both Woolworths and Wesfarmers own substantive synergistic assets around each evolving telehealth play including consumer data companies.
Although Wesfarmers is now wholly divested of any interest in supermarket giant Coles, it has substantive consumer data on customers from the likes of Bunnings, Kmart, Officeworks and One Digital.
Both companies have been aggressively trying to build their telehealth and direct to consumer virtual health businesses ahead of a much mooted entry by Amazon into the pharmacy and telehealth space in Australia.
While Amazon is yet to confirm details, it is not expected to be far away, based on Amazon strategy in the US.
Wesfarmers Health managing director Emily Amos said the proposed acquisition would add a substantial presence for the company in the growing telehealth sector, aligning with its broader focus on digital health.
“Over recent years telehealth has emerged as an important service, complementing the care delivered through GP practices, pharmacies and other allied health providers,” Ms Amos said in a statement.
“Our goal is to make Australians’ health, beauty and wellness experiences simpler, more affordable and easier to access.
“InstantScripts provides flexible services that are available at short notice and outside of normal consultation hours and is accessible to patients in remote areas and those who have difficulty visiting a GP.”
Ms Amos said that InstantScripts was complementary to the existing Wesfarmers Health portfolio and that the acquisition would provide opportunities to leverage its existing pharmacy and skincare networks.
Notably, InstantScripts, which provides both asynchronous and synchronous telehealth services, has a presence in nearly half of the countries pharmacies, a distribution channel which will no doubt expand by the number of Priceline pharmacies that don’t feature InstantScripts as a part of its services.
“Wesfarmers Health plans to invest in the continuing growth of InstantScripts and the expansion of digital health services for patients,” she said.
“The InstantScripts clinical governance framework is well structured and we welcome the opportunity to apply Wesfarmers Health’s expertise and relationships to further strengthen and improve clinical outcomes for our patients.”
InstantScripts chief operating officer Richard Skimin said he was excited to lead the business under its new ownership structure.
“Our continuous improvements in clinical governance provide the right foundations for further growth,” he said.
InstantScripts was founded in Melbourne in 2018 by Dr Asher Freilich and Maxim Shklyar and has become a major player in the Australian telehealth space.
Wesfarmers founded its health division in March 2022 after it acquired API in a takeover worth more than $760m.
The company is a wholesale distributor of pharmaceutical goods, offering retail support services to pharmacies through its Priceline Pharmacy franchises and banner brands. API also owns non-pharmacy Priceline stores, the Sister Club loyalty program and Clear Skincare clinics.
The revised telehealth guidelines were released by the MBA on 31 May and aim to “close the gap that’s sprung up between online prescribing business models and good medical practice”.
Key changes to the guidelines include:
- Telehealth consultations will continue as an important feature of healthcare in Australia.
- Real-time doctor-patient consultations remain key to safe prescribing.
- Prescribing via questionnaire-based asynchronous web-based tools in the absence of a real-time patient-doctor consultation is not considered good practice.
MBA chair Dr Anne Tonkin said in a statement that telehealth was “here to stay”.
“It plays an important role in healthcare in Australia and has opened great opportunities to improve access to and delivery of care, including to rural and remote patients and people living with disadvantage,” she said.
The board said prescribing or providing healthcare for a patient without a real-time direct consultation, whether in-person, via video or telephone, was not good practice and “not supported by the board”.
The practice is no longer supported by any of the four major doctor indemnity insurers now, each refusing coverage for any doctors involved in asynchronous prescribing.
The MBA ruling covers “asynchronous requests for medication communicated by text, email, live-chat or online that do not take place in the context of a real-time continuous consultation and are based on the patient completing a health questionnaire, when the practitioner has never spoken with the patient.”
Dr Tonkin said the board carefully considered the feedback from customers of asynchronous prescribing companies who argued that their programs were convenient especially for patients who couldn’t get GP appointments.
“But prescribing medication should not occur in isolation,” she said.
“Consultations enable a doctor to ask follow-up questions that help identify the best treatment for a patient, including when they have previously been given a script by another doctor.”
The updated guidelines and submissions to the Board’s consultation are published on the MBA’s website.
