Small Pharmacies May Feel Burden of Medicare Discount Card

May 28, 2004 -- Posted at 4:08 p.m. CDT

JONESBORO -- It's no secret that being sick can be expensive. With the cost of drugs rising everyday and super-sized chain pharmacies building more and more stores, small pharmacies have a lot to worry about. Are independent pharmacies a dying breed? Small drug store owners have to be competitive if they want to stay in business. By offering personal service and low prices, Ken Gibson says his pharmacy has been able to compete with the larger chains.

"That's what they like to do, is convience and 24 hour service. But as Channel 8 has done in the past and shown the prices of the big chains, they might not be as competitive as the rest of us. We have to be as competitive, as independents, we have to be competitive as the chain stores to survive, to stay in the business," said Gibson.
Dr. Brandon Cooper of Soo's Pharmacy said, "When people compare the apples to oranges of the chain drugstores and independent stores they find that there is a lot more personable service. We can talk to them one on one... where most of the time they get a recording at a lot of the chains."
With two large retail pharmacies opening just down the street from Soo's pharmacy, Cooper says he believes his customers are loyal.
"We lost a few customers, most of those actually come back to a lot of the independent stores. Most of them get over there and find the longer lines, the longer wait time and prices are a little higher and most of them come back, so it hasn't impacted us that much," said Cooper.

The threat to the smaller pharmacies may not be the big super sized chains. In fact it could be the new Medicare discount card. Pharmacies, whether small or large are required to pay a portion of the costs of the new program. With greater reliance on drug sales and narrow markups, small pharmacies may find it harder to turn a profit.

"Their are no requirements on the drug companies at all to offer any of the rebates or the discounts. so, in majority, the discounts are coming straight from your local pharmacist," said Cooper.
Both the Gibson Pharmacy and Soo's Pharmacy have been signing up patients for the discount card since May 3rd.
"In a city that has 35 pharmacies or so, competition between the pharmacies keeps the prices pretty competitive. the discount cards may or may not come into play as far as being helpful," said Gibson.
According to the National Community Pharmacists Association, the number of independent pharmacies in the U.S. fell by 5,620 from 1993 to 2004.