Institute Hill Pharmacy owner cites finances as cause of closure
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.
That reality has now forced Institute Hill Pharmacy in Butler to close its doors effective Tuesday, Feb. 6, according to owner Jonathan Valentino.
Valentino said over the past few years, the business has been losing money on between 15% to 20% of the prescriptions it fills because of lower insurance reimbursement rates on certain drugs.
“It's definitely a trend,” Valentino said. “There truly is nothing I could do to make things change. It doesn't make business sense if that's what you're basing your business off of selling medications. There is no reason to continue and put my family's financial means at risk.”
Valentino said in just 2023 alone, insurance companies did not reimburse more than $70,000 to the pharmacy, averaging more than $1,300 a week in loses.
According to reports from the Butler Business Matters issue from November, Jeff Mustovic, owner and pharmacist at Evans City Pharmacy & Gift Shoppe in Evans City, 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 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.”
Valentino said his independently owned pharmacy at 937 E. Jefferson St., which has been open since 2007, is in the process of selling its customers’ files to Rite Aid’s Main Street location in Butler and, starting Wednesday, Institute Hill’s former customers can begin filling their prescriptions at Rite Aid.
Valentino said he believes chain pharmacies such as Rite Aid are not feeling the reimbursement pinch as hard as independent pharmacies.
“A lot of the bigger chains are owned by insurance companies,” he said. “So the insurance companies are going to give them a better rate than they would, say, us.”
Valentino said aside from himself, there are three other employees at Institute Hill that will have to now look elsewhere for employment.
“I honestly don't have a destination or a thought process on it yet,” Valentino said. “There is so much involved with closing a pharmacy that I can't give any time to anyone else right now.”
With regards to his customers, Valentino said he is thankful for the Butler residents who chose his pharmacy, which was between 1,500 to 2,000 people in just this past year.
“I can't say enough about everybody,” Valentino said regarding his customers. “We are happy to have been here as long as we have. We are glad to have had everyone as customers and we wish them the best.”
