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A customer walked into MD Pharmacy in University City recently with a last-minute concern: He was leaving town for a vacation and didn't have enough pills for his heart condition.

The pharmacy tried to obtain computer authorization to refill the patient's prescription, but his insurer rejected it because not enough time had elapsed since his previous prescription.

It was the kind of annoying obstacle that can take persistent phone calls and paperwork to resolve. But in this case, a pharmacy technician managed to cut through the red tape and secure insurance approval quickly.

"We have a very loyal following," said manager Mindy Kammer, whose father, David Kammer, founded MD Pharmacy in 1963. "We'll do anything it takes. My customers have my cellphone number. I'll meet them at the pharmacy or deliver to them. We take care of your animal, your baby, your mother."

But independent, family-owned pharmacies are struggling to stay in business. Pinched by insurance companies, large retail chains, online pharmacies, Canadian outlets, and mail-order plants, many neighborhood pharmacies in the greater St. Louis area have closed.

With its bold blue awning and brightly lit neon "open" sign, MD Pharmacy — near the intersection of Interstate 170 and Delmar Boulevard — beckons to anyone with a prescription to fill. But the pharmacy doesn't get much walk-in traffic. Most of its business is home delivery, and the pharmacy delivers not only medications but other supplies to home-bound clients. Many of its customers are seniors, and medications are also sent to those who 'snowbird" for the winter in Florida. About 5 percent of its patients are enrolled in the state's Medicaid program for the poor.

"We're fighting for every dollar we get," said Mindy Kammer, describing her store's sagging profits and the headache of dealing with insurance companies and patients who hit a brick wall in having their prescriptions filled. "We've had to hire extra help to negotiate with the insurance companies."

It can be a game of diminishing returns. After haggling with an insurance company to cover a patient's prescription, the insurer may subsequently move the prescription to mail order.

FEELING THE SQUEEZE

Some independents have diversified to survive.

Jennifer's Pharmacy & Soda Shoppe on Central Avenue in Clayton, for example, opened a lunch fountain to bring in more customers. It also sells children's games, stuffed animals, greeting cards, vitamins and skin care products. The pharmacy still sells generic drugs and hormone replacement therapy compounds — but avoids entanglements with health insurance companies.

"They scrape it down to the point where you're making pennies per prescription," said proprietor Jennifer Rich, explaining that insurers' "take-it-or-leave-it" contracts dictate a customer's co-pay obligation and set low reimbursement rates for drugs.

For years, independent pharmacies have faced competition from drugstore chains such as Walgreens and CVS. Groceries, including Schnucks, Dierbergs and Walmart, also have a substantial presence in the business. But now even the larger retailers are feeling squeezed. Some of their pharmacies appear to operate less as profit centers than as loss leaders designed to attract customers who will browse and buy other goods while their prescriptions are being filled.

Now, pharmacies large and small are being pressured further by mail-order operations. Insurers and pharmacy benefit managers have tried to move customers with chronic conditions to mail order, which can send 90-day supplies of medicines with generally lower co-pays to their homes.

"Why are they telling people where they have to go for their prescriptions?" asked Kammer. "The freedom of choice is going away."

ECONOMIES OF SCALE

Kammer said it's no surprise that larger pharmacy chains have acquired smaller outlets, but the closure of neighborhood pharmacies is detrimental to consumers "because it takes away the ability to get what you need efficiently, conveniently, quickly."

Pharmacy benefit managers, whose clients include larger, self-insured employers and health insurance plans, process hundreds of millions of prescriptions. The two largest pharmacy benefit managers are Medco Health Solutions Inc., which is based in Franklin Lakes, N.J.; and Express Scripts, based in St. Louis.

Pharmacy benefit managers call mail order the most cost-effective way to deliver medications because they can negotiate deep discounts on the enormous volume of drugs they purchase, and prescriptions can be filled at an automated facility — where fewer mistakes are made.

"We're not necessarily stealing business from the pharmacies, because we only deal with chronic conditions, not acute-care needs like antibiotics," said Medco spokeswoman Jennifer Luddy. "There's a need in the industry for both types of pharmacies: mail order and retail."

She also said that dispensing 90-day supplies of medicines is much more convenient for patients and helps them adhere to their medication schedules. Independent pharmacists, however, say they are prohibited by Medco and other pharmacy benefit managers from dispensing 90-day supplies of medicines, which hinders their ability to compete. Luddy said that decision is made by insurers and companies that are Medco's clients.

Express Scripts, which offers mail-order services, usually relies on financial incentives to move patients to mail order — luring them with lower or fewer co-pays. But depending on the patient's insurance plans, some of Express Scripts' plans call for mandatory mail order for recurrent prescriptions.

Independent pharmacists argue that mail order is fraught with complications, including drugs that are sent late, not sent or lost in the mail — which can place patients with mental disorders or serious conditions and disabilities in jeopardy — as well as shipments being subject to extreme temperatures.

A recent Consumer Reports magazine survey found that independent neighborhood drugstores had higher customer satisfaction ratings than larger retail chains because of fewer errors, swifter service at the pharmacy counter, accessibility to pharmacists, and a higher likelihood that medicines will be ready when promised.

"We all check everybody's work because we want to make sure we're not giving someone the wrong drug, and sometimes you need a second or third set of eyes," said Alison Schul, a bookkeeper at MD Pharmacy.

THE MIDDLEMEN

Typically, the pharmacy sends a request to fill a prescription to an insurance company or pharmacy benefit manager. If approved, the pharmacy is notified how much money the insurer will pay for the medicine and the patient's co-pay obligation. If rejected, the pharmacy may need to contact the physician and ask the doctor's office to call the insurer for a "prior-authorization" or an "override." Some pharmacies and doctor's offices are too busy to make such calls.

"We're the middleman between doctors, patients, and the insurance company, so we take the flack," said Nathan McConnell, the pharmacist at MD Pharmacy. "We answer the phones personally. We'll take it one step further."

Schul said that roughly 15 to 20 percent of prescriptions are rejected by insurers for various reasons, including that the patient's insurance is no longer valid. In a small percentage of cases, insurers will not cover a specific medication prescribed by a doctor.

Insurers each have a "formulary" of drugs they are willing to pay for, but their formularies are similar. Generally, they prefer to pay for lower-cost generic drugs rather than brand-name drugs, and to cover older drugs rather than higher-cost new drugs.

Insurers also choose between similar drugs, and independent pharmacists say that drug companies offer secret rebates or discounts to insurers in return for a preferred spot on a formulary.

"It's all hidden from public view," said David Kammer. "We have been fighting this battle for decades, trying to get a fair shake from the insurance companies ... They can turn the screws pretty much at will, and (they) are raking in record profits."

"Many drugs being prescribed are denied," his daughter Mindy said. "That may not be best for your own body."

McConnell said that he often lacked time at his previous job at Walgreens to talk at length with patients or to call insurers and doctor's offices when a prescription was rejected.

He prefers to work at MD Pharmacy "rather than be part of an assembly line."

"This is their body, this is their life," he said. "They need certain information, rapport and care."

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