Rural Florida pharmacies are struggling. The pandemic isn't helping
Rural pharmacies across the country are struggling to keep doors open. Reasons include insurance company practices, online sellers and COVID.
When Michael Njoku answered his cell phone inside Bronson Pharmacy, the call was from a customer asking for her medications to be delivered to her home. It’s a service Njoku has provided since opening the business in 2015. He said he would be there in three minutes.
The nearest pharmacy is 11 miles away in Williston, so many residents of Bronson, a rural town of 1,000 people, rely on Njoku’s for delivery of prescription and over the counter medicine.
“It’s a lot of people with no cars, no transportation,” he said, “so we go to them.”
But running such a small operation has been tough, Njoku said. He has lost many customers to companies offering prescription drug services like GoodRX and Amazon.
“A lot of people don’t come because they’d rather get it online,” he said.
Two other reasons small, rural pharmacies across the country are struggling to keep doors open: insurance company practices and the pandemic.
Njoku runs the store on his own and said he has only about 35 regular customers.
“It’s not busy,” he said. “So, I can handle it.”
All but one shelf lining the 3,000 square foot building are empty. It’s not a supply chain issue; there is little demand for over-the-counter meds at his store. Not that Njoku is complaining.
“I have everything that I need,” he said.
Njoku said he tried to sell his business to a larger pharmacy chain in 2020, but the company denied his request, saying his location was too far from its other stores.
Joey Mattingly, a University of Maryland professor of pharmacoeconomics, said store location is a major factor in the vitality of independent pharmacies.
“If I’m a CVS, and I own 8,000 pharmacies across the U.S., I have an advantage over somebody who owns one pharmacy in north Florida,” Mattingly said. “It’s David versus Goliath.”
The professor said insurance companies, which often have a network of 50,000 pharmacies, benefit from a data advantage. Pharmacies make money on some drugs and lose money on others, so where one is and what drugs are in demand locally play a role profit-wise, he said.
However, a great location isn’t always a pharmacy’s saving grace.
Angel’s Pharmacy in Palatka is down the street from a hospital and an assisted living center – and yet the owner and manager, Parth Patel, 32, said he still struggles to stay in business.
Patel said most of his worry stems from treatment by pharmacy benefit managers, or PBMs, who negotiate contracts with drug manufacturers on behalf of insurers. PBMs are responsible for reimbursing pharmacies for dispensing patients’ medications.
In 2020, Patel said, his pharmacy lost $100,000 in expected reimbursements. He also said the government should keep large insurance companies from running their own PBMs and mail-order pharmacies.
“They’re doing whatever they can to harm our businesses,” Patel said. “It’s a monopoly.”
Mattingly said insurance companies justify these services because it takes the financial burden off those who rely on medication. Calling it anti-competitive, he said, “The reason why it’s allowed is from the insurance perspective: If we can do it ourselves, it saves money.”
The professor said insurance companies argue that going through independent pharmacies like Patel’s would force them to pass costs onto patients.
“A lot of pharmacists have a very negative sentiment toward large insurance companies because they probably feel like they get pushed around, which they, you know, arguably do,” he said.
Mattingly also said small pharmacies are often at the mercy of insurers because patients enrolled in these insurance plans won’t be able to use their insurance at these pharmacies.
“Imagine you own a single pharmacy in north Florida,” he said. “Are you really going to be able to negotiate with a multibillion-dollar company that says, ‘Here’s your contracts. You can take it or leave it.’”
With mail-order drug services becoming a convenient option for people to fill their prescriptions, many local pharmacies have had to shift business practices.
“I hate saying it,” Mattingly said, “but I do think we have to continue evolving and thinking about making it better for the patient.”
Harry Patel, owner of Cheek’s Drugstore in Cross City, Dixie County, no relation to Parth Patel, said expanding his store’s offering was key to its survival. It sells bait and tackle, ammunition and even has an arcade racing game. It may start selling guns soon, said Harry Patel, 44.
Cheek’s has 13 employees who operate the store’s counter and drive-through. Harry Patel said he often meets personally with customers who are struggling to pay for their medications.
“We know everyone,” he said. “These are our patients. We want them to be healthy and take care of them.”
April Baxley, 46, drives 10 minutes from her home in Old Town to pick up her meds from Cheek’s. She said her insulin is much cheaper there than if she went to a large, chain drugstore.
“They’ve always helped me when I need something,” Baxley said.
Harry Patel said his pharmacy provides deliveries within a 25-mile radius and often makes trips after hours. It was in poor shape before Patel took over in 2018, he said. The store had a deli that closed years ago. It was Patel who added a drive-through to the building.
Now, Cheek’s has 5,000 customers who travel from across the county for their prescriptions.
“I hope the bad days are behind us,” Patel said.