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Bitter pill: Customers lament loss of small-town pharmacies as reimbursement formulas become unsustainable

As Erica Yurt’s husband battled head and neck cancer, she relied on Mainline Pharmacy in Harrison City to get critical prescriptions for him on time.

The independent pharmacy also stayed open past closing on a Friday to make sure he got the medications he needed.

Now, the Level Green woman fears that individualized service will disappear as Mainline shuts the doors of her local pharmacy at the beginning of March.

Management blamed the impending closure of nine of its 11 stores, including the Harrison City location, on plummeting rates of payment from pharmacy benefit managers, which often reimburse pharmacies far less than the actual cost of medications.

PBMs are third-party companies that serve as intermediaries between drug manufacturers and insurance providers.

In a post on Mainline’s Facebook page, the pharmacy said it lost more than $350,000 on about 17,500 prescriptions filled so far this year because of the low reimbursements from PBMs, making continued operation unsustainable.

Likewise, Leechburg Health Mart co-owner and pharmacist Alex Micklow said ongoing reimbursement issues with insurance companies is one of the main reasons his store closed at the end of January.

“Reimbursements are so bad, we’ve lost $100,000 since Dec. 1, 2023,” said Micklow, who has been in business since 1977. “It’s horrible. This is not what I wanted to do.”


Other options

In a statement, Rite Aid, which will be receiving prescriptions from the nine closing Mainline Pharmacy locations, welcomed new customers and confirmed it would offer Mainline employees positions at its stores.

“We welcome these new customers to Rite Aid and look forward to serving them and helping them achieve whole health for life. All prescription records will be transferred to a nearby Rite Aid location,” the statement said. “Patients should not experience any interruption of services.”

But since the news broke of Mainline’s closure, Ed Christofano, owner of the independent Hayden’s Pharmacy, says his company has been fielding calls from people looking to transfer their prescriptions.

Hayden’s has locations in Youngwood, Mt. Pleasant and Donegal.

“We are seeing patients that demand better service than they’re getting at the retail box stores, and they are staying with a family-owned, independent pharmacy,” Christofano said. “We are seeing transfers. We want to make sure we maintain that personal, quality customer service level that you get from an independent pharmacy that you don’t get from a retail box store.”

At the Medicine Shoppe in Jeannette, owner Jim Beatty says he also has received calls. He was already addressing an influx of customers from when Rite Aid closed several area stores, including a location in Jeannette.

“Being an independent (pharmacy) allows you to provide the level of service you feel people deserve,” Beatty said. “With the closure of Rite Aids in the area, we are kind of getting hit doubly with what’s going on.”

Meanwhile, independent pharmacies are struggling to close the gap between the cost of medicines versus reimbursements from PBMs.

“It’s not a new issue. It’s something that’s been around for a long time. Most people don’t even know what a PBM is, and how it affects the pharmacy and what it does,” Beatty said. “As far as us, we are pretty much evaluating each customer as they come to us. That’s what we’ve done to maintain the business to this point.”

Christofano echoed Beatty’s concerns.

“It’s very heartbreaking to see that the industry, driven by the PBMs, is just going to try to snuff us out,” he said, noting the playing field isn’t even because some major PBMs, such CVS Caremark, are connected to bigger chain pharmacies.

“We are going to do everything we can to try to provide care,” Christofano said. “I’m hoping we see the reform that we need with PBMs to make this happen.”

Klingensmith’s Drug Stores — with seven locations across Leechburg, Kittanning, West Kittanning, Ford City, New Bethlehem, NuMine and Rimersburg — isn’t imminently in danger of closing but is struggling, according to President David Cippel.

Contracts with PBMs were particularly rough this year, he said.

“Our cash is very, very tight. This week, we had to tap our line of credit for a pretty significant amount of cash — the first time we’ve had to do that in over two years,” he said. “We’re focused on trying to keep our head above water and trying to conserve as much cash as we can to pay our bills. And hopefully, we’ll come out on the other side and be able to stay open.”

‘Tremendous loss’

Despite the struggles they face as a business model, many customers specifically seek out independent pharmacies because they want a more personal experience than what they would get at a big-box store, Beatty said.

“It’s kind of interesting because it’s almost what health care has become today. Whether you’re trying to call a doctor’s office or whatever, it’s a challenge,” he said. “We try and do what we can to not be that way.”

With the recent closure of Health Mart pharmacies in Leechburg and Lower Burrell, many customers have transferred to Klingensmith’s, Cippel said.

“We do home delivery, we use our own drivers, and we don’t charge for that. The chains do not do that,” he said. “We pride ourselves in a higher service level, a higher touch, with our patient base.”

Cippel said the stores that have recently closed “did everything right.”

“They know how to operate a pharmacy and treat patients,” he said. “Having this happen, it hurts the communities. Nothing good happens in a small community when the pharmacy closes.”

For Yurt, Mainline’s closure is a “tremendous loss to our little community.”

“We will miss Mainline terribly,” she said. “I have no idea where we will go.”

Customer Debi Svoboda has used Mainline Pharmacy for “close to 40 years.” She was so moved by news of the closure that she brought in a box of cookies on Tuesday for the pharmacists and other staff when she picked up her prescription.

“(I’m) devastated to see them go,” Svoboda said, describing the pharmacy as a “stellar operation. (They’re a) great hometown pharmacy.

“You feel like Norm from ‘Cheers.’ Everyone knows your name.”


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