Changing prescription drug landscape forces local pharmacy to shutter

By Brandon Martin

With a heavy heart, the owner of Starling Pharmacy has announced the historic establishment will be closing its doors effective April 13. 

Niki Goad, owner of the pharmacy which sits at 1312 Memorial Boulevard, said the decision weighed on her tremendously. 

“This has been the hardest thing that I’ve ever done because it is like you are losing your family. My customers are my family,” she said. 

Goad bought the business from Edgar Cliborne after his business partner, Burgess Hamlet, passed away in 1994.

“Edgar sold the business to Niki in 2006 and he retired,” said Joanie McPeak, a pharmacy technician at Starling since 1987. “The store was originally on Starling Avenue in the 1930s and Burgess bought it from Luther Blair and moved it here (Memorial Boulevard) in 1965.”

According to McPeak, the business boomed in Martinsville’s heyday. 

“We had Dupont, we had Tultex, we had all of the factories like Bassett and Hooker,” she said. “We were their main supplier for their first aid needs and things like that. We also were their Workers Compensation pharmacy.”

Over the years, McPeak said she built a relationship with the clientele. 

“We are their moms, their aunts, their best friends, their therapists. Our people come in and they talk to us about stuff. We probably know more about them than anybody else,” McPeak said. “When people find out they have terminal problems, they come here and talk to us because they couldn’t sit there and discuss it with their doctor in the office.”

As opposed to larger pharmacies, McPeak said Starling offered a friendlier environment.  

“You’re not a number. We know you,” she said. “We know their cars. We deliver and that’s not something you are going to find with the big chain stores.” 

McPeak said she took the job when she was just a teenager. 

“I fell in love with it,” she said. “I fell in love with the fact that our patients were like family. I was very, very shy and they had to tell me to talk to people because I just could not do it. Slowly, but surely, they became like your family and it was like a safe zone.”

While McPeak found a family at Starling, Goad pursued a career as a pharmacist. 

“I wanted to be able to help people without being a physician. I wanted to have a family and I wanted to be able to be a mom too. I wanted to be there for my kids,” Goad said. “Pharmacy allows you to do that.”

Over the years, the family at Starling Pharmacy grew to two full-time employees (Goad and McPeak), and four part-time staff. 

“We had a good business, but with NAFTA (the North American Free Trade Agreement) and all of the jobs going overseas, that all started to slowly go down,” McPeak said. “Dupont closed, and then a lot of things went to mail order.”

McPeak said the pharmacy experienced a decrease in 2004 strictly because prescription drugs were being mailed.  

“People are getting things through their insurance companies through the mail,” McPeak added. “They are only calling us if their mail was late, and they didn’t receive their stuff. They would only ask for a 10-day supply.”

The cost effectiveness of mail order helped syphon business, Goad said. 

“Mail order is much cheaper. You can get a 90-day supply for probably a third of what you are going to pay at the pharmacy,” she said. 

“It’s not their (the customer’s) fault that it was more economical for them to do mail order,” McPeak said. “You have to make those hard choices. We would order a bottle of 100 and sell them 10 pills. If they were the only person getting that medication, then it would eventually go out of date and we would have to throw it away. That in turn, causes a loss.”

According to Goad, that was only one of the hardships facing independent pharmacies. 

Community pharmacies suffered a hard hit when Medicare Part D took effect on January 1, 2006. Medicare Part D introduced the concept of preferred pharmacies. The Centers for Medicare and Medicaid define a “preferred pharmacy” as one that offers covered drugs to plan members at lower out-of-pocket costs than what the member would pay at a non-preferred network pharmacy. Some examples of preferred pharmacies include Walgreens, CVS and Walmart. 

Some larger pharmacies own insurance companies and use discounts to encourage customers to shop at their stores, McPeak said. 

“It’s unfair that they look at you the customer and say, ‘if you come to my store, you’ll get the products for free, but if you go over to that little drug store around the road, then you’re going to be paying 100 percent,’” McPeak said.

Goad said the outlook for independent pharmacies looks bleak. 

“It’s only going to get worse. The big chains are buying out the insurance companies. Patients are being forced to go to” large competitors “to get their medicine for free or stick with the little guy and pay a copay.” Goad said. “It seems unfair. These larger stores can get their products at a lower cost because they buy in bulk because they are nationwide. We can’t do that.”

Along with offering cheaper prices at national chains, Medicare Part D also brought about direct and indirect remuneration (DIR) fees.  

“Meaning a drug that the Medicare/Medicaid payment system, they can look and see what they paid you a year and a half ago,” McPeak said. “They can say, I think we pay them too much for that. Let’s take that money back.”

McPeak said that in 2019 alone, Medicare clawed back $9.1 billion from pharmacies across America. 

“It’s little things that might just be $0.32 but it adds up quickly,” she said. “On our reimbursement sheets that we get from the insurance companies, we balance out what we think we should have gotten and what they are actually paying us. They do take fees. One time, we got a negative $23, but on our sheet, it was $2,300 that we were supposed to be getting paid. It was a whole year of remuneration fees that they were taking back.”

Tracking the fees for each customer is also overbearing on smaller pharmacies, according to McPeak. 

With only two employees, “you’ve got your pharmacist and your tech. We don’t have time to sit and go through every chain of everything to try and track back the DIR fees,” she said, adding that more responsibility was shifted towards the pharmacies. 

“Saying it is a pharmacy’s responsibility to make sure that a patient takes their pill every single day and gets it refilled every 30-days is ridiculous,” McPeak said. “Are you going to have some pharmacy calling you every day and asking you if you’ve taken your pills yet? That’s one of the problems with the DIR fees.”

Additionally, Goad said that deregulation of drug prices placed a financial strain on Starling. 

“In December, Eliquis which most people use as a blood thinner, was $459 a bottle for a 30-day supply,” she said. “By the time we purchased it in January, it had went up to $485 just in a 30-day period. When the insurance pays us for that, we might get $465 so we are not making anything.” 

McPeak said the deregulation was multifaceted. 

“A Nystatin cream used to cost us $3.82 for a tube. Then when deregulation happened, the next time we went to order it was $105,” she said. “You had insurance companies already set up to pay an average wholesale price, and they are not going to fix that in the calendar year. So, we were getting reimbursement rates much lower now than the drugs were actually costing us. That’s still a huge problem today.”

Local factors also played a role in the decision to close the pharmacy, according to McPeak, who cited the costs of utilities and local business fees. Plus, “the DEA license went up again this year.”

Goad said the local business license fees are calculated as a percentage of gross sales. 

“It costs $2,000-3,000 to get your business license in the city,” she said, and added that eventually, the changes piled up. 

“We are having to make this decision because of all of the changes the pharmacies are going through,” she said of closing the pharmacy. “It’s things that we’ve tried to fix. It’s like you put a Band Aid on it, and then it breaks loose again.”

“We hate doing this,” McPeak said, and added the pharmacy reached out to legislators, but received no help. 

“There have been several bills proposed in the last three year to make it more transparent and make it where that can’t happen anymore, but so far nothing has been done. There is nothing we can do,” she said. “We feel like (our representatives) don’t listen to us. I can’t tell you how many times we have written.” 

McPeak said the pair writes once every 1- to 2-years, but to no avail. 

“Nothing is ever addressed,” she said. “We get a response saying, ‘thank you for taking the time to write to us and we will look into this,’ but nothing is ever done.”

McPeak said she doubts rural pharmacies have much clout in Washington D.C., comparatively.  

“Insurance companies have lobbyists, drug companies have lobbyists,” she said. “Who are they (the representatives) going to go with?”

Left with no other option, Goad said the doors of Starling Pharmacy will be closing on April 13 and all files will be transferred to Walgreens. 

Goad is planning on taking a position at Walgreens in Stuart, while McPeak seeks other opportunities. 

“I currently teach piano and beginner violin at Dan Smith Music in Collinsville,” McPeak said. “I’m going to try and get my student base up for a bit. I’ve been here for 34 years. I’m going to primarily teach but if something else opens up, I’m gladly willing to pursue other ventures but as of now, I’m just going to find joy in that.”

Customers of Starling Pharmacy received a letter dated March 30, formally announcing the decision to close the pharmacy. For the next two weeks, both past and present customers are invited to come by the pharmacy one last time, or by calling (276) 632-6222 or (276) 632-5060.  

 

 

 

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