In our third in a series of stories on Tallahassee’s small, independent drug stores, we find some of the so called “little guys” can sometimes offer services that the big national chains either can’t or won’t.
The small pharmacy on Mahan Drive just east of Magnolia is still called “Stewart’s.” But the owner’s name is now Danny Jackson. Although he says the store’s namesake is still very much involved.
“Lee Stewart still works for me. He’s the original owner of Stewart’s Pharmacy.”
But no matter who’s in charge of the place, the challenges of running a small, independent drug store are the same. When asked what it’s like, Jackson simply replies, “It’s hard.” But Stewart’s Pharmacy does have a unique aspect that helps it stay competitive.
“At Stewart’s, we focus on compounding, which helps us because it usually eliminates the insurance companies. They won’t cover compounding for the most part, so we’re able to control some profit margin that way. Otherwise, we’re at their mercy.”
Before widespread availability of mass-manufactured medicines, virtually all drug stores, as well as many doctors, compounded - or made - medications from scratch using raw chemicals. Compounding continues today when patients need special forumulations or dosages that aren’t available commercially. In Tallahassee, Stewart’s is just one of two retail drug stores to offer this service. Jackson said it’s become a dominant revenue generator.
“There are a lot of instances when insurance is involved where we actually lose money on prescriptions and actually can’t fill them. We’ll let (the customers) go elsewhere because we’re running negative margins and you can’t stay in business that way.”
So, in addition to the store’s compounding service, Jackson said Stewart’s Pharmacy also stocks a unique mix of other merchandise.
“And we focus on a lot of different things that are not available. We don’t feel like we really compete with the big boys. We just find little niches here and there to take care of our customers.”
That individual customer care, he added, is another hallmark of staying viable in the era of medicinal mega-stores.
“We try to focus on customer service and make sure our customers are taken care of when they come on. We try to get our doctors to know that we’re going to take care of their patients and we get a lot of referrals that way.”
Talking with those who own and operate small, independent drug stores, some recurring themes emerge. One is the general difficulty of staying competitive as we noted. But each of these operators - including Danny Jackson of Stewart’s Pharmacy - has harsh words for PBMs; the pharmacy benefit managers that stand between them and so many of their customers.
“The main reason there are not more independents are the PBMs because they control the whole financial market in the pharmacy business. And most of them are subsidiaries of the big chains, like CVS Caremark is a subsidiary of CVS and Walgreens has their benefit manager, too. So they’re playing both ends of the game.”
A game Jackson insists is getting ever harder for the little guys like him to win, or even score points. We’ll take a deeper dive into this aspect of the business later on in this series of reports.
