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    A drugstore on every corner: Turning points in community pharmacy

     

    More stores, more profits

    Walgreens, Revco, Rite-Aid, CVS, etc. immediately realized that by increasing production they could increase their profits. They began building stores throughout the country. They also would move into a town and buy out the strongest independent pharmacy.

    Soon there would be only one or maybe two independents left in each town. The smaller towns would end up with no independent pharmacies left.

    Most of the pharmacists who were bought out accepted high paying jobs in those chain stores.

    No more detail men

    The laws barring drug manufacturers from advertising were rescinded, and those manufacturers then came up with a new way of promoting their products.

    They no longer hired pharmacists to introduce and explain their new drugs, opting instead to hire young, good-looking ladies.

    These young women did not call on retail stores. They only supplied doctors and their employees with lunches and branded souvenirs while promoting their drugs.

    The coming of DTC

    These new salespeople were not the only way manufacturers promoted their drugs. The drugmakers also began to use television.

    Suddenly viewers were bombarded with drugs promoted over the air. Was it any surprise that they went to their doctors and demanded to have those wonder drugs prescribed for them?

    Payers and profits

    The proliferation of insurance plans and PBMs ensured that manufacturers would make a good profit.

    When the insurance companies and PBMs demanded deeper discounts, manufacturers raised their prices to protect their profits.

    Upping the AWP

    Manufacturers were pleased to realize that they could increase prices regardless of their costs to produce drugs.

    The costs of the television ads were easily covered by the increased average wholesale prices. By increasing these prices, manufacturers generated greater profits for themselves, the insurance companies, and the PBMs. The drugstores were left out.

    The result

    Some manufacturers are now increasing prices to ridiculous levels.

    The insurance companies have to pay these costs, but negotiate enough discounts to offset them.

    To further increase their profits, they also raise the premiums and co-pays required by their plans.

    So in the long run, subscribers have to pay for higher drug costs through increased premiums as well as increased co-pays.

    The way forward

    As a result of these developments, the independent pharmacists who are left are moving toward compounding, niche, and specialty practices in order to maintain profits and to stay in business.

    Truman Lastinger lives in Suwannee, Georgia. “Farming to Pharmacy,” his memoir of a lifetime in rural pharmacy, is available from Amazon and booklogix.com. Contact him at [email protected].

    4 Comments

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    • ChloeMica
      This could be useful! I mean since medical science has been seen as a branch of science it should be payed enough concerns. Creative Peptides
    • MarkBurger
      All true. A great retrospective. And so succinct. Kudos to you, Truman, for bringing us up-to-date on the State Of Pharmacy. The shrinking number of independent pharmacies (due to the inability to make a profit in this crazy world of rebates and shortages and exclusivity of pharmacies to dispense this product or that [Walgreens just fell into bed with Valeant according the "Pharmacist Activist" February newsletter] and the lousy lop-sided contracts with PBMs) is reason enough for us to begin to offer HEALTH CONSULTATIONS, LIFESTYLE COUNSELING, HORMONE TESTING, GENOMIC TESTING, NUTRITIONAL TESTING, MEDICATION MANAGEMENT (with me it usually involves MEDICATION DISCONTINUATION and POLYPHARMACY MANAGEMENT since from 20 to 50% of ALL Rxs are inappropriately prescribed .. conservatively). BUT we need to do this with a better paradigm than the medical profession. We need to do it BETTER. Don't try to fit a patient with a diagnosis ... that's what allopaths do. They can't deal with a patient until they can assign an ICD-10 code (codes) and/or an RSV (procedure code) to a patient. That's not how patients are and it's not how we should treat them. We need to use the FUNCTIONAL MEDICINE / SYSTEMS BIOLOGY approach to patients so that we can offer them a solution (cure?) to their CORE problem, not 'band-aids-over-bullet-holes' approach so endeared to the failed western medicine approach. That's not healthcare, it's "sick care". And, finally, we need to be paid well to do these. Don't take what the PBMs and Government programs offer, we're worth more than that.]Don't do it for free and don't do it like the failed paradigm of the last 50 years. If you follow this advice, your pharmacy will not be in jeopardy. Young pharmacists can start their own business w/o having to play by the Old Rules. If they do so, our profession will have a future. My 2 cents.
    • Anonymous
      This is far from a complete list of things that transpired. Formation of health maintenance organizations with their own, in-house pharmacies or narrowly selective pharmacy participation (usually chains); PBMs and their 'black-box' technology which stole the data from the pharmacies and then used it against them to ratchet down reimbursements; insurance companies who would not allow independent pharmacies to participate. In my locale, Blue Cross had 25% of the local market and would not allow my pharmacy (and other independents) to participate (the chains were allowed in, however) and Kaiser-Permanente had 25% of the market and had their own pharmacies. 50% of our entire market was not allowed to use our services even if they wanted to. These were not the only plans that did not allow us to participate. The ones that did usually had low reimbursement rates. Wide variations in the wholesale pricing of drugs. I belonged to a large buying group (PACE) with over 1,000-2,000 participating pharmacies...but when I closed my pharmacy and went to work for a chain (of 2,000 stores), the pricing was noticeably better at the chain. I went from profitable in 1990 to bankrupt in 1996.
    • Anonymous
      Absolutely true. The demise of the independent began with the loading of State Boards of Pharmacy with employees of the established chains, Eckerd, Walgreen, etc. They worked to prevent laws protecting the actual practice of pharmacy. Gone was the one on one contact with ones clients, but it was fill baby fill. I was first registed in 1963, worked as a retail RPh for several years and then went to work as a "detail" man. The medical environment was wonderful. People actually cared about their patients and customers. You knew them by name and I remember often delivering needed medications at night and on weekends. Retrospectively it was a series of cascades. First the loss of the independent grocer to the big chains. Then the service stations gave way to the filling stations. Individual clothing outlets fell by the wayside. Independent auto dealers were soon to follow being absorbed by the large conglomerate owners such as Auto Nation etc. Those of us closer to the end than the beginning lived through the golden age of America I am glad I did.