Health care costs driving out mom and pop drug stores

April 19, 2011 7:09:25 PM PDT
An institution as old as apple pie is starting to vanish from the American landscape. Mom and pop drug stores are being forced out, ironically, by the high cost of prescription drugs.

"It's very sad to be leaving because, absolutely, because I love the public. I love helping the public," says Jerry Calander of Carlmont Pharmacy in Belmont, wearing a shirt that reads "I'm not dead yet," although his drug store is.

Carlmont Pharmacy prided itself on customer service for 54 years.

"It's like an old friend coming here," says Bonnie Verbelli who has been a customer for a quarter of a century. "You can get advice here for anything, you're not treated like a machine or number."

Earlier this month, its doors closed. The last independent pharmacy in Belmont was gone. It went the way of many other mom and pop drug stores. California has lost about 700 of them in the last decade.

Calander says insurance companies are doing them in.

"It's now at a point where sometimes we lose money on filing a prescription," he says.

Pharmacists say insurance companies have cut reimbursements even though drug costs have skyrocketed.

"Pharmacy does not really have a good way to negotiate with insurance companies, so it's a take it or leave it kind of contract," says Paul Lofholm who owns Ross Valley Pharmacy in Marin County. He is also the past president of the California Pharmacists Association. "What's happening is we're dispensing too many prescriptions for five dollars and it costs me 14.85 cents to fill a prescription."

"Do the math. You can't make it that way," says Calander, whose store was like many other independent drug stores. It had a limited inventory of greeting cards, gift items and knick-knacks. But its mainstay was the pharmacy.

The insurance reimbursement cuts hurt, but so did another trend.

"Many customers were sent to mail order by their insurance company," says Calander.

The big chains like Costco, Walgreens, and even Safeway became competitors.

"Why would the chain stores survive? Because they have many things out in front," says Lofholm. "They would like you to leave their store with at least $50 less, buying other stuff."

All of that cut into Calander's business. Even many of his longtime customers told ABC7 they had to buy their prescription drugs elsewhere. Calander says even if he paid zero rent, he still would not be able to stay afloat.

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