In Friday’s Eagle, staff writer Steve Cukovich told us Institute Hill Pharmacy in Butler will be closing, with its last day of business scheduled for Feb. 6.

The longtime, independently owned pharmacy at 937 E. Jefferson St. said in a Facebook post its customers’ files will be moved to Rite Aid’s Main Street location in Butler.

Based on national trends, this is not a surprise.

According to a report by KFF, using information from the University of Iowa’s Rural Policy Research Institute, 1,231 of the nation’s 7,624 independent rural pharmacies closed between 2003 to 2018, leaving 630 communities with no independent or chain retail drugstore.

KFF pointed to Batson’s drugstore in Howard, Kan. The owners of the business bought the grocery store next door in 2006 to help diversify revenue and put the pharmacy on firmer footing. But that doesn’t stop the relentless march of competitive pressures from large retail chains, which can operate at lower prices.

Multiple pharmacists approached by KFF said about half of drug plan reimbursements fail to cover the costs of drugs and their overhead.

“What you’re left with is that 50% of claims that you can make some money on, and really, the tiny percentage of claims where you make an extremely high amount of money,” said Nate Hux, who owns an independent pharmacy in Pickerington, Ohio.

It’s that tiny sliver of wildly overpaid drugs, especially generics, that determines whether a pharmacy can survive, KFF reported. A generic drug that costs $4 might get reimbursed by a drug plan at $4,000.

Jonathan Valentino, owner and pharmacist at Institute Hill Pharmacy, said in a previous edition of Butler County Business Matters that insurance companies have undercut the cost of medication and have put the financial burden back on the pharmacy to pay for certain prescriptions.

“(Recently), I filled three prescriptions, and I was $1,200 in the hole because the insurance won’t reimburse what the cost of the drug is,” Valentino said.

Valentino said in previous reports he loses money on between 15% to 20% of the prescriptions he fills, and the only way he is able to keep afloat would be profits from the other 80%.

Medical insurance is convoluted. It’s certainly not a business for the faint of heart. What all of this seems to indicate is a pharmacy cannot rely on the sales of pharmaceuticals alone to run a profitable business, which is why the owners of the business in Howard, Kan., had to buy a grocery store. It’s likely also why the likes of Walgreens and CVS and Rite Aid sell groceries and cosmetics at a higher markup than most stores.

As pharmacies in the U.S. close by the thousands, what is to be done to improve access to pharmaceuticals in the U. S.?

— RJ