Losing money on a daily basis is not ideal for any business, but for those in the pharmaceutical industry, that reality is all too real.

The majority of a drugstore’s sales come from filling prescriptions, but according to some local pharmacists, those profits have dwindled in recent years due to lower insurance reimbursement rates for prescription drugs.

Jonathan Valentino, owner and pharmacist at Institute Hill Pharmacy in Butler, and Jeff Mustovic, owner and pharmacist at Evans City Pharmacy & Gift Shoppe, said this profit loss happens on a daily basis, and the two are not sure how long it will last.

“ (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.

Mustovic said his business has lost about $60,000 in each of the past two years due to little to no reimbursements from insurance companies.

“It’s happening every single hour of every single day,” Mustovic said. “There are some days I wish I didn’t turn the key because we are in the red at the end of the day.”

Valentino said insurance companies have “complete control” over the market, even as the government continues its push for lower drug costs.

“The insurance companies say, OK, this is what we are going to reimburse you at, and you’re going to have to deal with it,” Valentino said.

At Institute Hill, Valentino said 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%.

“You don’t want to have to turn people away because then you won’t have customers,” Valentino said.

Valentino said some of the prescription drugs in question are weight loss drugs or diabetic drugs such as Ozempic, Wegovy and Saxenda.

Mustovic, who is nearing retirement, said he has personal reasons for remaining open, despite finding himself looking for a profit at the end of each workday.

“These are the people I’ve served for almost 35 years, and you don't want to turn them away,” Mustovic said. “When you see prescriptions where you’re losing between $100 and $200 each transaction, how can you be profitable? Then the ones that are profitable, you're making nickels and dimes.”

Mustovic said seniors are experiencing a “doughnut hole” which limits their buying power with the money they receive from their Medicare benefits.

“Seniors under Medicare are given approximately $2,000 to spend,” Mustovic said. “You spend that money, and then all of a sudden your copay goes up exponentially.”

That money goes toward copays anyway Mustovic said, but as insurance companies are making copays around $200, that money gets used up much faster these days.

In addition, he said some drugs require prior authorization from insurance companies, otherwise the copay will be higher than normal.

Mustovic said doctors should be more careful when prescribing these drugs to prevent complications when the patient goes to fill their prescription.

“The doctors are trying to prescribe these drugs knowing the patient’s insurance,” Mustovic said. “There should be some coordination right then and there. The doctor should think twice and say this isn’t covered without a prior authorization.”

Mustovic said doctors should know their patient’s insurance and if what they need is covered by looking on their electronic notepads that most doctors have.

Technology has helped the industry come a long way Valentino said, which helps keep him organized to give the best possible service he can.

“On my end it’s very easy to fill a prescription, check their profile, make sure that no drugs are interfering with each other,” Valentino said. “With that they have made it very easy. It’s very user friendly.”

Jannah Jablonowski, public relations manager for Giant Eagle Pharmacy, said technology has continued to advance in recent years, and Giant Eagle has been actively leveraging technology to better serve its patients.

“We have a state-of-the-art central fill facility as well as multiple support and clinical centers that enable us to provide comprehensive, consistent and convenient care to the communities we serve,” Jablonowski said.

Rite Aid plans to close 154 stores nationwide as part of its recent bankruptcy filing and closed its 178 Point Plaza location in Butler Township on Nov. 26.

This comes after Rite Aid filed for Chapter 11 bankruptcy in mid-October.

Valentino said chain pharmacies are experiencing the same problems when it comes to insurance reimbursements, but there are other issues as well.

“Some of that has to do with the lack of personnel,” Valentino said. “For example, Rite Aid in Butler has four pharmacies, if they reduce one they have the staff from the closing pharmacies fulfill all their needs.”

Mustovic said there is a possibility if he decided to sell that Rite Aid or another chain pharmacy would buy him out, but it wouldn’t be for the right reason.

“If I would sell out to them, they would close the location down and force the patients to go their other locations,” Mustovic said.

About 30 stores slated for closure are in California, according to the court filing. Other Rite Aid locations that will be closed are in states including Maryland, Michigan, New York and Washington.

“Rite Aid regularly assesses its retail footprint to ensure we are operating efficiently while meeting the needs of our customers, communities, associates and overall business,” Rite Aid said in a November statement. “In connection with the court-supervised process, we notified the court of certain underperforming stores we are closing to further reduce rent expense and strengthen overall financial performance.

“At this time, we have not made or confirmed any decisions on additional specific store closures as part of our financial restructuring process.”

Prior to the closures, Rite Aid employed about 45,000 people, of which more than 6,100 are pharmacists. Its footprint included more than 2,100 stores in 17 states.

Rite Aid said in November approximately 75% of its associates have accepted opportunities to transfer locations if their store has been, or is part of, the ongoing store closures.

Jablonowski said staffing continues to be a challenge across the industry, but Giant Eagle Pharmacy is well-staffed with pharmacists and pharmacy technicians with ongoing recruitment activities in place to attract new pharmacy talent.

“We are aware that enrollment in pharmacy education programs has been decreasing over the last few years which may lead to further staffing concerns over time,” Jablonowski said.

“I think we all have the same set of challenges,” Mustovic said. “The challenge now is to just survive. Can you survive with the reimbursements given and still provide care. Pharmacists are walking out because they can’t provide care and safety because of the economic repercussions from the reimbursements that are not provided.”

This article was published in the November issue of Butler County Business Matters.