Independent pharmacies question value of counties' new drug card
By Diane Urbani de la Paz, Peninsula Daily News
September 5, 2007
PORT ANGELES, WA - That new drug-discount card - the one saving people 13 percent to 34 percent on prescriptions - sounded too good to be true.
Independent pharmacy owners say it is.
The card, available since Saturday in Clallam County and coming Oct. 1 to Jefferson County, is part of a program advanced by the National Association of Counties and CVS Caremark, a pharmacy services company that fills or manages a billion prescriptions per year.
The Clallam County Rx card and its Jefferson County twin need no paperwork, no co-pay, no eligibility requirements - including age or illness - no sign-up fee and no limits.
Chinook Pharmacy, Forks' independent druggist, accepts the Clallam County Rx card, and owner Chuck Carlson said he's already seen about 20 people with it.
Prescriptions were already cheap at Chinook, however - so cheap that "we have loyal customers who've moved away, and we still mail them their prescriptions," Carlson said.
Not always cheaper
The Rx discounts don't always make drugs less expensive than they already were, he added.
Stan Peterson, who sold Chinook to Carlson in January after running the pharmacy for 29 years, said the card "is not always that great for the consumer. Our customary charge is lower than the discount."
Carlson said a county official told him to simply raise his prices in response to the new program.
"That's what's wrong with the health care system," was his reply he said.
At the same time, the Caremark program may seriously hurt locally owned drugstores like Chinook - and Jim's in Port Angeles, Frick Drug in Sequim and Don's Pharmacy in Port Townsend, the owners of the independent pharmacies said on Tuesday.
"The discount comes directly out of our profit," said Joe Cammack, who took over Jim's Pharmacy five years ago after his father, Jim Cammack, retired.
"We're in business to make money," Joe Cammack said.
"And when we have our profits cut by a plan like this, the first thing we cut is donations . . . to community groups like the YMCA, the United Way, youth soccer."
Cammack isn't planning to cut contributions yet, and said he'll have to look at his post-card profits.
What Cammack wants to see: a prescription discount program that benefits those who need it most.
"There's no age or income eligibility for this. Even your pet can get one," he added.
Consumers can use the card to receive discounts on veterinary prescriptions, and patients with Veterans Affairs benefits, Medicare and even private insurance that doesn't cover a particular drug can use it to save on their prescriptions.
"It ends up being a forced donation," to everyone who obtains a card, Cammack said.
"We want to give back to the community - to the organizations we choose. Now we're giving back to anybody who walks in the door. That person could be making a million dollars a year."
For Carlson, one organization in need of financial support is his Chinook Pharmacy. As the West End's Mom-and-Pop drugstore, it has customers from Neah Bay to Lake Quinault, he said.
When he sits down with a customer to compare the card's discount on the price of a prescription with Chinook's regular price, Carlson must enter the Rx-card information into the program system and pay transmission fees, which are funneled to Caremark.
Caremark, then, is reaping revenue from the Rx program, both Carlson and Cammack pointed out.
Jim Jones, Clallam County administrator, who ordered 22,000 Rx cards for distribution, agreed that the corporation is receiving fees while small drugstores may make smaller profits - but he said that consumers are saving money on the prescriptions they need.
"It's the greater good, quite frankly.
"This is exactly the same argument where towns say, 'We don't want a Wal-Mart,'" because it will hurt locally owned shops.
"The small businesses survive by giving people good service. Jim's has given the best personal service for many years, and Chinook has probably the cheapest prices on the Peninsula," Jones said.
Frick Drug in Sequim is another locally owned drugstore contending with a wave of Rx cardholders.
On Tuesday afternoon, a pharmacist said everyone in the store was too busy to talk about the impact.
Don Hoglund, who owns Don's Pharmacy in Port Townsend with his mother Donna Hoglund, isn't pleased with the new program that will come into effect in Jefferson County in about a month.
"The burden of the discount is shouldered by the provider of the service, and nowhere else are we given any economic advantage to be able to offer that discount," he said on Tuesday.
"It sounds all warm and fuzzy, but it isn't for the ones who are providing the discount," he added.
"We can only discount so much, and then it becomes a real economic burden on our business model."
Jefferson County Administrator John Fischbach has ordered 10,000 cards.
Hoglund isn't sure how much the card, which covers only prescriptions not covered by insurance, will affect his business.
"It's hard to say because we don't know how many people are going to be getting this card," he said.
"A lot of our prescription business is already billed to an insurance entity, so it's not like it's a huge percentage.
But he said the upshot is "an erosion of our profit margin."
And he resents the fact that county officials did not talk with him before signing on to the program.
Jones said that if independent pharmacists had come up with a better idea for a drug discount program, county officials would have listened.
When the Washington State Association of Counties presented Caremark's Rx program in July, Jones saw it as a decent deal for consumers.
About a third of Washington's 39 counties have signed on to the program, he added.
To deny Clallam residents the opportunity to save on prescriptions would be "ridiculous."
Clallam County commissioner Mike Doherty, D-Port Angeles, said he talked with Chinook's Peterson, however, and told him he hopes to work with the Washington State Pharmacy Association and the state Department of Health on a discount program that doesn't strain locally owned businesses.
The Rx card "does help the consumer," Doherty added.
"It does not help smaller drugstores in rural Washington, in rural America."
Sequim Editor Diane Urbani de la Paz can be reached at 360-681-2391 or email@example.com.