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MN pharmacies in crisis: Pharmacists push for bill to change prescription payment business model

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“We care about every part of your healthcare and your life. We do our best for that. We do more than medication. We really do,” says Eric Slindee, a retired Harmony pharmacist. More than medicine— that’s what small, independent pharmacies say they offer, but the current business model is driving those pharmacies out of business. Some Minnesota lawmakers believe they have a fix for one of the issues causing the problem.


“The pharmacies that are still in business and are desperate to stay in business say they need this bill,” says State Rep. Tina Liebling of Rochester. The author of HF1752 tells KIMT 1.5 million low income Minnesotans get their insurance through the Medical Assistance Program. The state runs 15% of the program and pharmacy benefit managers, or PBMs, run the rest. “Pharmacies who fill these prescriptions are being way underpaid… So that in many parts of the state where you have a small pharmacy on the corner, and that pharmacist has relationships with the community and the people there count on the pharmacist to get their prescriptions filled and for advice and other support, these pharmacies are being driven out of business,” the democrat comments.



According to Rep. Liebling, the state currently pays pharmacies about $10.17 per prescription, while the PBMs pay as low as $0.10. HF1752 would take out the middle man and make the program solely state-run, which Liebling believes would save the state money, while also giving pharmacists the cash they need to keep their stores running.


The bill had a hearing in a house committee and it’s expected to have one in the senate. It has bipartisan support, with State Rep. Greg Davids of Preston among the republicans who are now co-authors. Rep. Liebling says the goal is to get the bill into the healthcare package and the omnibus bill to increase its chances of being signed into law.


“This bill is key to us surviving and to be able to fight another day and continue on,” says Deborah Keaveny of Keaveny Drug in Winsted. “It’s frightening. In discussions that I have with my MNIndys group, we are all at a tipping point right now. We’ve all figured out how to reinvent ourselves and find profits in other avenues. We have tried to do some cash programs. We try to sell more greeting cards. We try to sell more toilet paper. It just doesn’t make it up.” Keaveny tells KIMT 90% of her sales come from prescriptions, and 42% of her patients would be impacted by this bill.


Keaveny founded a group of independent pharmacies called MNIndys. The group helps each other and pushes legislation benefiting their businesses and patients. She calls the reimbursement practices of the PBMs abusive and unsustainable. She says all independent pharmacies are asking for, is a level playing field. “Let us compete on our merits. Let us compete on our service. We’ll never be able to buy drugs as cheap as the Walmarts, the Walgreens, things like that, and that’s fine. That’s the market. That’s how a free market’s supposed to work. But on a level playing field, if I get to compete with the big boxes on service and taking care of my patients, I will beat them every day. And that’s all we’re asking for, is the opportunity.”


In Southeastern Minnesota alone, 7 cities had a pharmacy in 2006, but don’t have one today. Those cities are Kenyon, Byron, Adams, St. Charles, Harmony, Houston, and Spring Grove. Statewide, the list expands to Arlington, Ashby, Babbitt, Belgrade, Browns Valley, Clara City, Comfrey, Dassel, Hallock, Howard Lake, Lamberton, Le Center, Littlefork, Long Lake, Lonsdale, Maple Plain, Mapleton, Nashwauk, Osakis, Osseo, Renville, Spicer, and Waterville. This is according to data compiled by pharmacist Luke Slindee, who testified in the House’s committee hearing on HF1752.


The storefront of Harmony’s pharmacy sits closed up and empty after decades of business. In the early 1980s, Eric Slindee’s family became involved in the pharmacy, becoming full owners a few years later. By the 2000s, PBMs were created and the reimbursements kept changing. This led to Slindee selling the business 13 years premature of his retirement. “We sold the pharmacy to a small chain when we still had something to sell,” explains Slindee. That chain later sold to another chain, then Sterling Pharmacy closed it permanently last year. The Spring Grove location closed around the same time.


Slindee muses on his time serving up to 6 generations of Harmony families during his career. He’s concerned about towns who have lost pharmacies and the relationship with their community pharmacist, now forced to drive to other towns and forge new relations. Slindee has hope this bill could turn the tides for independently owned pharmacies and bring one back to his small community. “It won’t come back until the reimbursement model gets better so that a newer, younger person can manage to come in and serve Harmony again.”


On Wednesday, Kemper Drug and Gift in Elk River became the latest Southeastern Minnesota pharmacy to close. It announced on Facebook Tuesday that all prescriptions would be transferred to Walgreens. “That drug store had been in town for over 70 years,” says Keaveny. “They ran diabetic clinics for their patients. They knew everybody by name. It’s just very sad. When you see a store like that that has to close because of economic reasons and what the pharmacy benefit managers are doing as middle men in the whole transaction, it’s scary.”


As pharmacies find themselves at a tipping point, crunching the numbers, they believe HF1752 is the best hope to keep your neighborhood pharmacy open. But Rep. Liebling and pharmacists agree, this bill is just one piece of the puzzle. “The drug industry is one of the wealthiest industries in this country. They are making money hand over first. A lot of the fix has to come from the federal government, because these are national things. But as state legislators, we are working as hard as we can to try to find solutions,” says Liebling. The representative points out that although the goal is to sign the bill into law this year, its impacts wouldn’t be felt for a couple of years.


KIMT3 Reporter: Annalise Johnson

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