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 The leading web portal for pharmacy resources, news, education and careers November 21, 2017
Pharmacy Choice - Pharmaceutical News - Pharmacies diversify to survive - November 21, 2017

Pharmacy News Article

 2/13/17 - Pharmacies diversify to survive

Model Pharmacy isnt much of drug store any more. With its playful cursive pink-and-blue neon sign, the pharmacy near the corner of Lomas and Carlisle NE beckons to anyone with a prescription to fill. But the business model is one based on an active lunch trade, selling classic European fragrances, purveying greeting cards, gifts and vitamins, and over-the-counter medications.

In a pinch, the landmark Nob Hill business will fill a prescription, but it's on a cash-only basis, said owner Jack Lerner, a pharmacist who decided about a decade ago to not accept any form of insurance for those needing prescribed medications.

It was a game of diminishing returns, said Lerner, who got tired of haggling with insurance companies over reimbursement rates. Bottom line, it just didnt pencil out anymore, said Lerner. We were making peanuts (per prescription).

And when a sprawling Walgreens opened across the street, it was hard to compete with the buying power of large chains that not only fill prescriptions at lower prices, but also generate most of their income selling cigarettes, liquor and grocery staples like bread and milk.

So independents in Albuquerque like Model have diversified to survive. The retail store/luncheonette has a large following, serving up homestyle soups, sandwiches and desserts like berry cobbler. Lerner purchased the company 31 years ago from original owner Delbert Swindle, who opened the business in 1947. He wanted to open a model pharmacy, said Lerner, manning the cash register and chatting up a customer during a recent visit.

Declining to break down the revenue stream, Lerner said food sales represent a 'significant portion of the business, which has nine employees.

We get people visiting from all over, said Lerner about the pharmacy, which clearly is sustained by customer loyalty and tradition, but also a place that tourists seek out.

To address the challenge of competing with big chains, local independent pharmacies are wise to tailor themselves to the needs of their communities, and explore niche markets and services, according to an industry observer.

We dont compete with big companies, especially their buying power, said John Norton, spokesman for the National Community Pharmacists Association. Independent pharmacists tend to be in under-served areas, have diversified into compounding or immunizations or focus on a niche, such as opening near an oncology center, Norton said.

As CVS, Walgreens and Rite Aid have battled it out over the past 10 years, the number of independent pharmacies was stable, around 22,000, said Norton. There are 82 independents and 99 chain pharmacies in New Mexico, he said.


Across town, locally owned Highland Pharmacy at 717 Encino NE is just as likely to fill a regular prescription as counsel clients needing compounding services.

Compounded medications are prescriptions and medication orders that are written by physicians, veterinarians and other authorized prescribers, and prepared by trained pharmacists and pharmacy technicians.

At Highland's compounding pharmacy, every gel, cream, ointment and lollipop is made from scratch with raw ingredients.

Up until the mid-1960s, when pharmaceutical manufacturing came along, it was common to see pharmacists standing behind the counter crushing and grinding ingredients by hand with a ceramic mortar and pestle.

These days, Highland pharmacists offer patient consultations in their specialties of pain management and hormone replacement therapy. With a doctor's referral, pharmacists complete a full medical history, discussing drug options, and factors such as diet and exercise. They then make medications in an on-site compounding laboratory.

While Highland has offered consultations for at least 20 years, Director of Pharmacy Teri Rolan said many other pharmacists are moving toward a more clinical model of care. When pharmacists take on that role, it lifts some of the burden from other providers, she said. She often sees patients overwhelmed by a diagnosis who have trouble reaching their doctor and turn to pharmacies for help.

Rolan and her crew of eight use automated equipment in Highland's laboratory to prepare patient-specific drugs that arent commercially available in the concentrations and strengths needed, using component ingredients. The electronic mortar and pestle they use resembles a milkshake machine. Pharmacists use it to mix transdermal cream for wound-care patients to ensure the same concentration of active ingredients are dispersed throughout the substance.

We can really customize the medication to the individual, Rolan said. We can customize the dosage and the dosage form.

Medications are often compounded for seniors, young children and cancer patients who have trouble swallowing. Rolan said physicians also refer patients to a compounding pharmacy when their medications are no longer available from manufacturers or for people who are chemically sensitive or allergic to the fillers in tablets.

Highland, which was started by the Hayman family in 1942, also does home delivery, a welcome service for the elderly and the homebound. The business accepts most insurance plans, including workmen's compensation. While other pharmacies have compounding services, Rolan said Highland is the first and only Pharmacy Compounding Accreditation Board facility in New Mexico. This designation ensures quality compounded medications with additional oversight, she said.

At Highland's stores in Albuquerque and Santa Fe, the pharmacists and techs wear hairnets, masks and booties that have never been worn outside the building to keep the laboratory sterile and keep from being exposed to some of the chemicals they are working with.

Finding a way to stay local

Despite being in a competitive landscape dominated by massive chains, and where even supermarkets and discount stores operate pharmacy counters, the goal of opening an independent drug store still resonates with some in the profession.

Mike Gallegos, the owner of Corrales Pharmacy since 2015, wants to help clients not only with their pharmacy needs, but also to address other health care concerns, as well, such as weight loss, diabetes medication management and hormone replacement therapy.

A 2005 graduate of the University of New Mexico School of Pharmacy, the Albuquerque native opened his first pharmacy in an under-served area of the South Valley. It wasnt a great place to practice in the early going, but Gallegos pressed on and made it successful.

Despite being squeezed by insurance reimbursements, Gallegos persevered and grew customer volume to a level that attracted the attention of Walgreens, which offered to purchase his book of business, but not the location. The electronic prescription records of customers who patronized Gallegos were transferred to the chain's database.

With the proceeds of the sale, Gallegos headed for Corrales, a market he said offers a better demographic for dispensing both retail and compounding prescriptions, and a chance to be more than just a friendly face behind the counter. His goal is to eventually move into the role of pharmacist clinician.

The small-town druggist said a larger portion of his clientele is older, requiring more medications, but with better pharmacy retiree benefits. Insurance pays more, said Gallegos, and he doesnt have to generate as much volume as the South Valley location for less money.

Some of the services he's moving toward will be out-of-pocket, such as hormone replacement therapies. On a recent visit, Gallegos was mixing a female Viagra ointment for a customer over 60.

He works often with Katie Boylan, a certified nurse practitioner who leases space at the business, which is located at 4940 Corrales Rd. Having Mike next door is a nice adjunct to my practice, said Boylan. He gets clinical experience toward becoming a pharmacist clinician and Boylan sends business his way.

© Copyright (c) 2017 Albuquerque Journal

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