Bi-Mart shutdown puts pressure on two remaining Madras pharmacies, Hometown Drug and Safeway
When the Madras Bi-Mart pharmacy closed overnight, an avalanche of prescriptions overwhelmed the Hometown Drugs team. “I stayed here until midnight,” explains store owner Jeanne Mendazona. She arrives two hours before the store opens, stays after it closes, and works when it is closed on Sundays. “No lunches. No breaks. I’m dead tired,” she said. Since the Bi-Mart Pharmacy closed in November, Hometown Drugs’ workload has increased from 1,600 prescriptions per week to 2,500 prescriptions per week. Bi-Mart records are not yet electronic. Instead, his team should go through two 2-inch-thick three-ring binders with the patient’s document. “I have to hire more people, but I can’t afford it, even with the influx of prescriptions.” It bothers Mendazona that she cannot provide the level of service that she wants to her customers. âBefore, I could fill most prescriptions in 15 minutes. Now clients have to wait for hours.â Mendazona and her husband have owned Madras Hometown Drugs for 25 years and they are determined to keep it open, but she says several factors are killing small town pharmacies.
The big ones are crowding out independent pharmacies
The closure of Bi-Mart and the sale of its accounts to Walgreens marks a further consolidation of the retail pharmacy business. The big guys – CVS, Walgreens, Walmart, Cigna, UnitedHealth Group, Kroger and Rite Aid – are crowding out independent pharmacies.
In a letter to the Federal Trade Commission, Sen. Ron Wyden (D-Oregon) noted that seven national drugstore chains accounted for 72% of prescription revenue. On the other hand, writes Wyden, from 2003 to 2018, more than 1,200 independent rural pharmacies closed. The changing structure of the pharmacy market excludes small pharmacies. Large companies are teaming up with Pharmacy Benefits Managers who pay pharmacies when they dispense drugs. PBMs control what they pay at pharmacies, and independent pharmacies must pay fees to participate in preferred networks or to access claims databases that large national retailers already have access to. These fees are part of the reasons Bi-Mart sold its pharmacy business. âThe combination of direct and indirect compensation costs and (Oregon) corporate activity tax contributed to the reason Bi-Mart was forced out of the pharmacy industry,â said Don Leber, vice president of marketing for Bi-Mart, âto make sure we could continue to operate our 80 Bi-Mart stores.
Fees are increasing exponentially for independent stores.
The DIR fees mentioned by Leber increased by 91,500% from 2010 to 2019. The fees have not only doubled, tripled or quadrupled, they have increased exponentially. âAt first, the fees were insignificant,â explains Mendazona. “Now they were paying $ 200,000 a year.”
“People see how expensive the drugs are and they think we are making a lot of money. If people saw my results, they would be shocked.” -Jeanne Mendazona, Hometown Drugs
Add to that the CAT Oregon adopted in 2019. So far, the CAT has raised $ 1.36 billion for the Student Success Fund. Most businesses pass the cost of the tax on to the consumer, but pharmacies do not. PBMs reimburse pharmacies for the drugs they dispense. Period. The tax goes out of the box for Hometown Pharmacy. âPeople see how expensive drugs are and they think we’re making a lot of money,â says Mendazona. “If people saw my results, they would be shocked.” She adds that she has not personally received a salary from the company for two years.
Shortage of workers
Even though she could afford to hire people, âpharmacists are expensive,â Mendazona says, and she can’t find people to hire. Safeway is grappling with the same problem. “The country is currently facing a shortage of technicians and, without a doubt, all pharmacies have been affected,” said Safeway spokeswoman Jill McGinnis. “We hope our customers continue to be patient with us as we strive to fill vacancies.”
More than counting pills
âPeople think we’re just counting the pills,â Mendazona says, âbut we make sure the pills don’t kill you.â Counseling and record keeping are sometimes more important than the drugs pharmacists dispense, she says. “This is something you don’t get with a mail order pharmacy.” Mendazona is concerned about her customers who cannot hear well or who do not have smartphones and who will miss the personal services provided by independent pharmacies.
Challenge the system
Bi-Mart closing 56 pharmacies in the Northwest caught the attention of Senator Wyden. He asks the FTC to study whether consolidation of drugstore chains and health plans is making the market less competitive. Addressing specifically the DIR fees, Wyden says, âI am concerned that these fees may have a disproportionate impact on the financial viability of independent pharmacies, as they neither have the market power to push back, nor the scale to absorb the costs. . State Senator Lynn Findley plans to introduce a bill to exempt retail pharmacies from CAT in Oregon. Mendazona wants a level playing field. She wants people to reach out to their legislators to encourage them to make changes to the system. âI want to be paid to practice pharmacy,â she says, ânot just for the pills we distributeâ.
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