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While Kaup Pharmacy continues to operate other drug stores, the other pharmacies’ phone numbers now forward to Walgreens and flyers at the locations direct customers to nearby Walgreens stores.
Walgreens said in a statement that it bought the prescription files from the drug stores and those files were automatically transferred to nearby Walgreens locations. “We’re happy to welcome patients to Walgreens and provide convenient access to Walgreens’ trusted pharmacy and healthcare services,” the companys stated.
Salem Pharmacy officials could not be reached for comment. A worker in the same office building said the owner retired. The Medicine Shoppe owner could not be reached for comment.
Kaup Pharmacy said in a letter to patients that “we have enjoyed being part of your community and we truly appreciate your patronage these past 11 years,” and said patients had the choice of going to another Kaup location or Kaup would help transfer prescriptions to another pharmacy.
Pharmacies struggle with thin, negative profit margins
The plight of pharmacies has been a hot topic of debate by the Ohio lawmakers, as some pharmacies close or consolidate and others say they are struggling with thin or negative profit margins.
The Ohio Pharmacists Association and several state legislators have pointed the finger at private companies that manage prescription benefits for Ohio Medicaid and other insurers, and are accused of keeping too much of the money they manage, charging pharmacies complicated fees, driving business to their own in-house mail-order pharmacies and not being transparent about how they make their money.
“What’s happening is unbelievable. It’s legalized robbery,” said Kindy Ghussin, pharmacist and former owner of the two locations of Heartland Pharmacy.
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Pharmacy benefit managers are commonly used by insurance companies to negotiate deals on drugs and process pharmacy claims. They charge Ohio Medicaid plans for the cost of drugs and they pay pharmacists for the prescriptions, while keeping and administration fee. They also have additional ways of making money, including fees, rebates and owning their own mail-order pharmacies.
Large pharmacy benefit managers have said they don’t just process claims but also negotiate discounts on otherwise expensive prescription drugs, which they say helps employers and government insurers save money and helps keep prescriptions affordable.
“While drugmakers alone have the power to set and raise prices, PBMs (pharmacy benefit managers) reduce prescription drug costs, while also fairly compensating pharmacies for services they provide,” stated the Pharmaceutical Care Management Association, which represents pharmacy benefit managers.
Data released last year showed for the first time that two pharmacy middlemen retained $223.7 million of the money they billed Medicaid in 2017. CVS Caremark in 2017 kept 8.7% of the payments it received, or $197.3 million. OptumRx kept 9.4%, or $26.4 million.
The same report also said Medicaid saved $145 million under the privatized system compared to the former system where the state insurance program for the poor directly paid fees for services.
Ghussin said what led to Heartland Pharmacy closing and selling to Walgreens was direct and indirect remuneration fees. These fees are from the private companies that manage Medicare drug plans, and are criticized by some pharmacists as a complicated and untransparent system of overpayments and clawbacks that ends up costing them money on pharmacy claims.
Ghussin said this fee system left him thousands of dollars in the negative on claims, which led to Heartland closing and 10 people losing their job. He also operates a separate pharmacy business, KMG Pharmacy in Trotwood, which he said is also at risk.
“I’m praying to God that I don’t have to close that one too,” Ghussin said.
Antonio Ciaccia, lobbyist with the Ohio Pharmacists Association, said while some pharmacies have opened in higher income areas, those numbers can mask the number of pharmacies that closed in poor areas and rural areas with high number of patients paying with lower paying insurers.
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“We’re seeing a lot of retreating from high Medicaid areas,” Ciaccia said.
Ciaccia said this matters for consumers because when a small pharmacy closes, patients lose out because independent pharmacists have a business model designed to give individual attention to their patients health needs.
“That’s why a lot of times patient with more sophisticated disease states and drug therapy regimens, or people that need a little bit more hand holding, are people that just need more will typically seek out an independent pharmacy,” Ciaccia said.
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