LAKEPORT — A Lakeport pharmacy that donates to a number of community organizations is struggling to compete against a corporation whose CEO said he aims to take over 200 independent pharmacies every year.
North Lake Medical Pharmacy owner Bill Kearney said he donates thousands of dollars every year to schools, organizations such as People Services Inc., and events like Taste of Lakeport, but he might get pushed out of business by what he considers bad business practices by CVS Caremark.
“The thing that upsets me is community pharmacies are the ones that buy jerseys for the football team,” Kearney said.
“We”re the ones all over the world and the country that put back into the community,” he said.
CVS Caremark Corp., the largest U.S. distributor of prescription drugs, plans to buy out independent pharmacies and fold them into CVS”s existing store base, CEO Tom Ryan said in June at a Sanford C. Bernstein & Co. investor conference in New York, Bloomberg News reported.
“It”s just tough for them to survive,” Ryan said of independent pharmacies. “We”re going to continue to do that. We don”t operate the stores, we move them into our stores.”
CVS Caremark is a prescription benefit manager that covers prescription benefits for certain insurances. It determines what the customer pays and what profit the pharmacies make, Kearney said. CVS Caremark customers can get their original prescriptions filled at any pharmacy, but the refills are only covered if they”re filled at CVS Pharmacies or through the company”s mail order system.
“It”s taken away freedom of choice,” Kearney said.
“It”s just about as unfair as anything can be,” he said.
Mike DeAngelis, spokesman for CVS Caremark, said he thinks customers still maintain a choice.
“It”s up to the client,” he said.
CVS Caremark is contracted by employer health plans, which employees sign up for, DeAngelis said.
“At the end of the day its all about effective competition,” he said.
DeAngelis said there”s “nothing new or unusual” about the CEO”s plan to take over 200 pharmacies every year.
“Many times independent pharmacists are approaching us ready to retire or scale back,” he said. “Most of it happens that the business is sold to us and the pharmacists come work for us.”
Melissa Fulton, CEO of the Lake County Chamber of Commerce, said the problem with prescription drug benefits is the way it”s structured.
“What he”s doing is taking fair competition out of the mix,” Fulton said.
She said she doesn”t care about DeAngelis”s reasoning.
“What CVS is doing is taking choice away from consumers and they can”t blame that on the employer,” Fulton said. “If I were an employer and I was given that kind of information on what kind of insurance it is, I would not opt to take personal choice away from employees.”
Fulton buys from independent businesses because they support the community, she said.
“Our members are the ones who provide continuous financial support in one form or another to keep youth organizations, to keep schools and to keep non-profit organizations functioning,” Fulton said. “That in turn provides services for all of us. The problem with corporate America is they do not support the local community in the same manner as mom and pop businesses do.”
Though she”s encouraged to buy her medicine online and through mail order, Fulton goes to local pharmacies even though it might be more expensive.
“I have the choice. I can do that,” Fulton said. “I”m sure there are people whose medicines are such that they can”t do that.”
“These people year after year support my community so I support them by giving them my business,” she said.
Richard Birk, president of Lake One-Stop, said locally owned businesses tend to buy services in the county, such as insurance and information technology services, while corporations usually consolidate services and provide them internally or through other big business.
“To some extent, corporate businesses close local businesses,” Birk said.
However, Birk said bigger stores end up employing more people than mom and pop stores.
Pharmacist Larry Andreatta came to work at North Lake Medical Pharmacy about eight years ago from corporate pharmacies because there was too much corporate control, he said.
“We do what we need to do here to take care of the customer,” Andreatta said.
CVS Caremark is owned by CVS, which Kearney said in any other business would be illegal.
“It”s all about money. It isn”t about you,” Kearney said. “Everybody says mail order plans cost much less money to the patient but it isn”t. It ends up costing health care much more money.”
The time and correspondence between the pharmacy, the prescription benefit manager and the doctor is costly to follow the rules of the benefit plan, Kearney said.
“I”m a little guy. I can”t compete,” Kearney said.
Kearney said there are many factors added to CVS Caremark”s hold on the industry, including that the state might start handing out vouchers for medical prescriptions that the pharmacy can”t cash until the budget gets signed.
“Can I afford to live and maintain my business? It”s pretty iffy,” Kearney said.
Contact Katy Sweeny at kdsweeny@gmail.com or call her directly at 263-5636, ext. 37.
