City Drug closing after 70 years

V Hugh Lewis II/Jefferson Jimplecute

The age of big corporations putting the little guys out of business has claimed another victim – this time in downtown Jefferson.

After 70 years, City Drug will close their doors forever on January 16.

The locally operated pharmacy, founded by Edward Taylor, has been a staple in Jefferson, not only for prescriptions, but for morning and afternoon coffee, lunch specials, and the old-fashioned soda fountain.

“It’s the insurance companies. They’re killing us – they’re killing everybody,” said Becky Bates, owner.

Bates said she, her husband Brian, and other mom-and-pop pharmacies across the state have worked the last three legislative sessions to try and get Texas to make changes to help them stay open. She said last session they thought they had made progress, only to find out that a wording change, slipped in at the last minute, essentially put them out of business.

“There are new fees [to middleman companies called pharmacy benefit managers or PBMs] are now being taken out at the point of sale, but the old fees [which are taken out at the end of the month] will continue until April 1. So, for the first quarter of this year, the companies are double dipping on us. And that was the final nail in the coffin,” she said.  We wouldn’t have made it this long without our amazing staff at both stores. We’ve tried, but we just can’t continue.”

According to Bates, in our area Walgreens is the only company buying pharmacies. Last year they completed the purchase of the pharmacies inside Super1 and Brookshire’s grocery stores.

“We’ve been talking with them, but kept walking away,” Bates said. “This last year I saw we weren’t going to make it. In April, I prayed asking God to show me a sign. And he did. That week three things happened that were terrible. Walgreens has been very respectful and kind throughout the whole process. They are buying the files from City and Matthewson Drug. At least this way our customers are taken care of.”

Walgreens is going to allow Matthewson Drug to stay open for their specialty services like making compound medications and servicing their contracts with area nursing homes, the Harrison County Jail, and health care facilities, according to Bates. Bates said they will also continue their delivery services to those facilities in Marion County.

The last day of business will be January 16.

“[On January 17] I will go to Walgreens with the pharmacy files and my customers,” Bates said. “I’m working with staff to help find the best thing for them.” Bates said the technicians and pharmacists are being offered positions with Walgreens.

Bates said she was heartbroken over the situation but after a lifetime of helping people via pharmacies, she just didn’t know what else to do.

“I started at 16 working in a pharmacy as a clerk,” she said. “Over time the pharmacist brought me in and taught me what to do. I could help people. I love it. It’s the nicest thing about owning your own pharmacy, as I could still do it. The day-to-day trying to keep it afloat has been horrible.”

According to an opinion piece in the Washington Post in November 2023, PBMs combined with major insurance companies, and drug manufacturers, have caused 1 in 3 Americans to live in areas with fewer than one retail pharmacy per 10,000 residents. These pharmacy deserts “can lead to serious effects on American’s heath” as “long drives and onerous trips on public transportation make it hard for patients to stay on track with their medications. People shouldn’t have to spend an hour in a car or bus just to pick up insulin to treat diabetes,” wrote Robert Gebelhoff.

PBMs tend to set low reimbursement fees for independent pharmacies and then add in demands on how drugs are dispensed and customer regimens that become impossible for the independent pharmacy.

Bates said they have so little control over pricing that it made it difficult to keep things going.

“We have no control over our pricing and there’s so many middlemen that there’s no margin left. We can’t control anything,” she said.

She gave an example of a “really expensive inhaler.” She said the insurance company required them to use the name brand. Then the insurance company gave the customer the generic co-pay rate, and reimbursed the pharmacy $137 below the City Drug’s cost to buy the inhaler.

“It was good for the customer, but not for us,” she said.

According to the Post article, 34% of Americans live in an area with less than one pharmacy per 10,000 residents.

And now Jefferson and Marion County are one of those areas.

See next week’s Jimplecute for a focus on City Drug. The full Washington Post article can be found at: https://www.washingtonpost.com/opinions/2023/11/27/pharmacies-closures-drugs-medicaid-medicare/