Local pharmacy closures point to a larger trend
ADDISON COUNTY — The sudden Aug. 31 closure of the Marble Works Pharmacies in Bristol, Middlebury and Vergennes, and the transfer of patient information to local Walgreens pharmacies, has generated public outcry and may have violated state regulations.
And it is seen by some as a local sign of a national trend that is driving community drug stores out of business and could endanger Vermonters’ access to essential medicines.
“The Vermont Board of Pharmacy has very specific rules regarding pharmacy closures, the most important of which requires the closing pharmacy to notify its patients of the closure date and the pharmacy to which patient prescription files will be transferred — at least 30 days before actual closure — via area newspaper and onsite signage,” wrote the board’s Executive Officer, Carrie Phillips, in a recent email to Vergennes resident Misty Scott, which was shared with the Independent.
South Carolina-based Smith Management Services (SMS), which owns the Marble Works Pharmacies, gave customers and employees just one week’s notice.
In fact, SMS only gave the Vermont Board of Pharmacy 10 days notice, according to documents obtained by the Independent through the Vermont Public Records Act.
“The closures of the three Marble Works Pharmacies was not done in a manner consistent with the Rule on Drug Outlet Closures,” Phillips continued in her email.
Several local residents have been left with the impression that the Marble Works Pharmacies were purchased by Walgreens, but Board of Pharmacy documents indicate that SMS has simply shut them down, and that certain drug inventories and prescription records were “transitioned” to the Walgreens pharmacies in Middlebury and Bristol.
The Independent sought clarification and comment from Walgreens corporate officials, but they did not respond in time for this article.
Smith Management Services officials have declined requests for comment from multiple news outlets, including the Independent.
Marble Works Pharmacy employees have also declined to comment.
Misty Scott contacted the Board of Pharmacy on Sept. 1 with concerns about patient privacy and the way Marble Works prescription transfers were handled.
She’s planning to file a complaint with the Vermont Office of Professional Regulation (OPR), she told the Independent.
OPR, which oversees the Pharmacy Board, is a division of the Secretary of State’s Office.
Karen Quigley, also of Vergennes, has already filed a complaint, she told the Independent on Wednesday.
Both are concerned that their information had been transferred to Walgreens on short notice, that they didn’t get a say in where their records were sent, and that the Vergennes Marble Works Pharmacy was still filling prescriptions on Sept. 1, despite the fact that it had closed — and its license had expired — on Aug. 31.
The OPR has received multiple complaints about “inappropriate closings or messy transitions,” Director Lauren Hibbert told the IndependentTuesday. She was unable to specify which pharmacies or where they were located, because the details of such complaints are “protected,” she said.
Quigley’s and others’ complaints are unlikely to lead to any meaningful action, however.
In the event OPR finds a drug outlet in violation, sanctions range from a warning to the suspension of a license, which may not mean much in the case of pharmacies that have already closed, Hibbert acknowledged.
After discovering that his $101-a-month prescription at the Bristol Marble Works would now cost $154 a month at Walgreens, Bristol resident Bill Brown is also considering filing a complaint, he told the Independent.
In a Front Porch Forum post, Brown asked his neighbors about their experiences with the sudden transition. He received more than a dozen emails, many of them expressing concerns about Walgreens’ higher prices and less friendly staff.
Hoping to find an alternative source for his medication, Brown contacted six different local pharmacies and found the prices were all different, ranging from $80 to $546.
“The (Bristol) Marble Works pharmacist, Jamie (Sawyer), did everything he could possibly do to minimize the cost to us,” Brown said. “We developed a feeling that he really cared about our health AND affordability.”
Middlebury resident Dave Hamilton has overheard similar sentiments during his six-plus trips to the Middlebury Walgreens this month.
Hamilton has been trying to sort out why Walgreens is charging more than $2,000 for this son’s seizure medication, which cost just $45 at the Marble Works in Middlebury.
“Nobody is able to explain it, other than the codes were entered in a computer, and the number comes up thousands higher,” Hamilton told the Independent. “The (Walgreens) staff is trying: they’ve now set us up with 10 days of medication while we attempt to sort this out.”
But Hamilton is not confident that it will get worked out.
“We’ll likely go back to an older medication that’s covered by insurance.”
Hamilton has spent quite a bit of time in the Middlebury Walgreens, he said.
Things don’t seem to be going well.
“The pharmacy has had a line of three or four people at all hours of the day trying to sort these things out. The guy ahead of me was trying to pick up his normally $25 prescription for $475 just now and just walked out. The fellow in line ahead of him had also declined his prescription and walked out. Then I did,” Hamilton said.
“It was very tense last week, with some very angry people, including me. I thought one guy was going to smash something on the way out.”
Walgreens corporate headquarters is not helping, he said.
“They keep sending robo-calls that prescriptions are ready, but in one case the prescription wasn’t even entered in the store system, and in another the prescription was but the insurance wasn’t. I’m lucky to have some flexibility to make a bunch of calls and stand in line a few times, but you definitely wonder about people without that flexibility: How are they getting through this?”
In some instances during this transition, critical needs have gone unmet.
Last week, the Independent witnessed a former Marble Works customer get turned away from the Middlebury Walgreens pharmacy counter because the hospice medication they needed was “not in stock.” The customer became distraught because the patient in their care, who was dying, needed the medication every hour. When asked about transferring the prescription, the person behind the Walgreens pharmacy counter told them that local pharmacies were backed up with an influx of Marble Works prescriptions and would be unlikely to fill anything in a timely manner.
The Marble Works Pharmacies aren’t the only pharmacies that were abruptly closed by Smith Management Services at the end of August. Nearly three-dozen pharmacies in Missouri, George, South Carolina, North Carolina and Vermont shut down on short notice, according to multiple news sources.
SMS is a subsidiary of J.M. Smith Corp., a multi-billion-dollar drug wholesaler based in South Carolina.
It acquired the Marble Works Pharmacies and the Medicine Chest (see related story, click here) in late 2016.
Two years later, SMS purchased a company called Family Pharmacy LLC, which owned 23 pharmacies in Missouri and which had gone bankrupt after losing more than $7 million in two years.
SMS left Family Pharmacy’s management team in place — and gave them charge of 11 additional pharmacies, which included the Marble Works and two Wilcox pharmacies in Rutland.
All of them were abruptly closed in recent weeks.
“Did they go out of business?” asked one confused Missouri customer on the Family Pharmacy Facebook page. “Would have been good to be informed of it as a customer.”
A second Missouri customer concurred.
“I didn’t know either, but they called and said get your stuff by Tuesday.”
It’s likely that SMS’s parent company has dumped its retail pharmacies so it can focus more on its wholesale drug operations, said Jeff Hochberg, acting president of Vermont Retail Druggists.
Hochberg’s company, Rutland Pharmacy, has acquired one of the two Wilcox Pharmacies that were closed by SMS — Wilcox Long Term Care Pharmacy.
Pharmacies are going through a tough time, he told the Independent.
“Consolidation is happening everywhere, both vertically and horizontally, especially with community pharmacies,” he said. “The financials of pharmacies no longer correspond to product cost and product availability.”
That disconnect is largely the result of a business type called pharmacy benefit managers, or PBMs.
Pharmacy benefit management is an almost exclusively American industry — with 97% of the share of the global market.
And it’s doing quite well for itself: In 2017 it collected more than $350 billion in revenue, according to a report by Global Info Research. By 2025, that number is expected to climb to $625 billion — or $1,847 for every man, woman and child in the United States.
PBMs negotiate price deals between drug makers and insurance companies.
As a result, Hochberg said, “insurance companies have no idea what costs are and don’t base their prices on how pharmacies are reimbursed.”
Lately, those reimbursements have not been enough to cover the cost of the medications.
Adding insult to injury, PBMs use Medicare Plan D rules to collect additional fees from pharmacies, sometimes even after medications have been dispensed.
Often referred to as “claw backs,” these fees are hitting independent and community pharmacies the hardest.
PBMs also contribute to wildly uneven drug pricing.
“The price difference has to do with national chains’ ‘preferred provider’ status, which does not apply to independent pharmacies,” Hochberg explained. “The Medicare D co-pay discounts incentivize patients to patronize certain retailers over others.”
With their lack of transparency and the outsize control they exert in the health care industry, PBMs are leading to consolidation and a lack of competition, said Rep. Mari Cordes, D-Lincoln, who is a nurse and health care advocate.
Hochberg estimated that 25% of the country’s independent pharmacies are currently for sale. The same holds true in Vermont.
Unless the Legislature and state regulators get more involved, “Vermont faces a deeply troubling future,” he said.
In a rural state without enough population density to attract many of the larger chains, community pharmacies have been filling the gap. When they go out of business, there will be access issues for a lot of Vermonters, Hochberg predicted.
COVID-19 is only making things worse.
“Costs are going up. Availability is going down. Supply chains are strained,” he said.
And during supply chain disruptions, such as the ones we’ve experienced over the past few months, “Vermont is the low man on the totem pole, in terms of access to drugs.”
Reach Christopher Ross at firstname.lastname@example.org.