MONROE — Pharm A Save Monroe, by how the public knows it, ceased this week when it transferred its prescription files to Rite Aid.
The divesture happened Dec. 12.
Signs that scripts would transfer to Rite Aid went up last week.
Customers such as Connie McColley were devastated. Her family filled prescriptions with Pharm A Save Monroe for 17 years because of the quality of service.
"It's family, you come in, they know your name," McColley said, and the pharmacists take the time to answer questions, no matter how minor they are.
What happens next is not crystal clear.
An owner at the business said the company will be staying independent but could not share more. A person claiming to be an attorney for the business who a reporter was put on the phone with said last week they'll continue serving customers beyond Dec. 13 and that "any rumors (the business) is closing are false." He refused to give his full name.
The business also sells durable medical supplies such as walkers, canes and chairs.
Kari VanderHouwen, who today owns and operates the separate Pharm A Save in Granite Falls and Duvall Family Drugs, grew up with Pharm A Save Monroe. Her dad Keith built up the business, and she was a kid in the back stockroom.
Family is deeply threaded in the store.
Her dad sold Pharm A Save Monroe to four employees in 2008.Two bowed out over time.
It's a tough market.
"Every independent pharmacy is struggling," VanderHouwen said.
Pharmacies are seeing their ranks slim. In Washington state, there have been an average of 13 pharmacy closures each year in the past three years, the Washington State Pharmacy Association's CEO Jenny Arnold said.
VanderHouwen can tick off recent closures from memory.
Darrington's only pharmacy closed this summer, sending its files to another independent, the Arlington Pharmacy. In recent years, Camano Island lost its independent pharmacy, Mark's. In 2020, Marysville's Hilton Pharmacy got out of the pharmacy business, pivoting to just gifts.
Independent pharmacies today have basically two exit routes: Sell the prescription files, or sell to another independent, VanderHouwen said.
Why is it tough?
Those in the industry say it's the vast power wielded by middleman companies known as pharmacy benefit managers (PBMs). The PBMs negotiate purchase prices with drugmakers and reimbursement rates for drugs, and also can affect which pharmacies are "in-network" at an insurance plan.
Three Big PBMs have more than three-fourths of the market share in processing prescription claims billed to insurance, according to the Drug Channels Institute.
Who owns them are a national health conglomerate, a health insurer and a health insurer: CVS’ Caremark, Cigna’s ExpressScripts and UnitedHealth’s OptumRx.
(Aetna health insurance is another subsidiary of CVS.)
About half of all the state’s residents are on an employer’s health insurance plan, and practically all employer plans use a PBM, according to Kaiser Family Foundation 2022 data.
Costs tightened in the past 15 to 20 years, VanderHouwen said. She bought Duvall Family Drugs in 1993.
PBMs have become more restrictive on what’s paid out, paying less each year to pharmacies, Arnold said. Yet, she said, what patients pay for prescriptions are increasing.
The controls are one piece to what’s eroded business. Access requirements are another: Microsoft’s health plan, for example, changed to requiring employees use
mail-in medication services that cut local pharmacies out.
“It’s that the PBMs have anti-competitive behavior,” Arnold said, “whether it’s their mail-order” requirements or other limitations.
Drug makers have sizable profit margins, but drug stores have slim ones.
The co-pay a patient pays at the counter doesn’t all stay with the pharmacy, Arnold said, because some of the money goes back to the PBM and much of the payment goes to purchase the medication.
The candies, gifts and other front-of-store merchandise make 10 to 20 percent of sales. Filling prescriptions is what keeps a drug store open, VanderHouwen said.
Arnold said that generally, pharmacies have a 1-2% net profit margin above the cost of medications, but that’s before the costs of staff and taxes.
Any pharmacy closure hurts communities, Arnold said. Pharmacists instruct how to use medications and more.
“A healthful community ties to having a pharmacist there,” she said.
Independent pharmacies such as Pharm A Save Monroe make up about 20 percent of all pharmacies in the state, Arnold said.
In the Legislature
A reform bill to more closely regulate PBMs, state Sen. Patty Kuderer’s Senate Bill 5213, may be revived in 2024.
It would prohibit PBMs from making requirements that people must use mail-order medication services, would prohibit allowing PBMs from excluding newly opened pharmacies from their networks, would require parity on what patients pay for co-pays and other fees from all sources of prescriptions (mail order or not), and would prohibit requiring a patient to pay more for a medication than what the PBM pays the pharmacy.
The reforms take the state’s existing laws and apply them to all PBM processes for health plans, and give the state Office of the Insurance Commissioner umbrella authority over PBMs.
Until state law is updated, there is not parity for how PBMs work with certain employer plans because state laws currently exclude them.
“Anyone who wants to help keep their pharmacies open should contact their senators,” Arnold said.
Roots
The pharmacy had served Monroe residents prescriptions for 115 years. For years, it was the only one in town.
In 1909, the Camp-Riley Drug Company opened on Main Street. For some of its history, Camp-Riley franchised itself as a Rexall Drugs. Dr. Camp was Walter Camp, who was Mayor Grace Kirwan's father.
Gordon Tjerne, David Campbell and Ray Bolton bought it from Camp in 1949, a store history written by Pharm A Save says. Tjerne retired in 1979, and in 1982 succeeded Kirwan as Monroe's mayor for 14 years.
Keith VanderHouwen, who is still alive, bought Campbell's share in 1964 and grew the business.
Camp-Riley consolidated to be the Tri-Valley Pharmacy in the Monroe Shopping Center on east Main Street where Grocery Outlet is the biggest store. Years ago, it used to have Safeway, Ben Franklin Crafts, a shoe cobbler and a hairstylist, Kari VanderHouwen remembers.
Keith VanderHouwen established the Pharm A Save brand in the mid-1980s. He added a Snohomish Community Pharm A Save on Avenue D, which he sold to Bartell Drugs, VanderHouwen said.
The Granite Falls Pharm A Save is not affected by Pharm A Save Monroe and is here to stay, VanderHouwen said. She's been having to clear up to her customers that the two stores have separate owners.
VanderHouwen said she does plan to hire pharmacy employees from the Monroe store, though.
It is, after all, a family.
