Scrips for success
Independent druggists thrive by delivering to niche markets
Reports of the demise of the neighborhood drugstore are much exaggerated.
Despite a precipitous drop in the number of independent pharmacies in the past two decades, their numbers have actually stabilized, and even increased slightly, over the past five years.
According to the National Community Pharmacists Association, the total number of independent pharmacies nationwide edged up to 24,500 in 2005, compared with 24,345 the year before. Meanwhile, the number of independent community pharmacies in Massachusetts has climbed more than 42 percent from a low of 176 some five years ago to more than 250 currently, according to the National Association of Boards of Pharmacy. And that number is likely higher, since NABP only counts pharmacies with less than four locations as independents.
Compounding the solution
The reason for the uptick, experts say, is that independent pharmacies have found niches that let them better compete with the big-box chains that continue to expand in the region and across the country.
Besides the old stand-bys of personalized customer service and home delivery, local drugstore owners are offering specially packaged medicines for the elderly and customer help in fitting and using medical equipment. They are also going back to their roots by focusing more on compounding - the practice of mixing up increasingly sought customized medicines for patients who can't take mainstream drugs.
Among those drugstore owners growing their businesses despite the proliferation of CVS's and Wal-Mart's is Saad Dinno, owner of Acton Pharmacy on Main Street. Dinno, who worked for CVS for five years before joining the family drugstore business in 1997, said his store revenues have grown 7 percent a year on average over the past 10 years despite dramatic changes in the pharmacy industry. He plans to begin a $100,000 renovation of his 3,200-square-foot store this summer.
Acton Pharmacy specializes in compounding specialized drugs for children, a market Dinno said isn't new but is growing. And it isn't something the chain drugstores are doing, as yet. More and more doctors and patients are becoming aware of compounding as medicines have become increasingly complex with increased potential for side effects, according to industry experts.
Dinno said that while compounded drugs only account for 10 percent of his store's prescription business, it is an important customer draw and a niche he expects will continue to grow.
On-demand
His store also features homeopathic medicines and makes deliveries. Four years ago, it launched a "medicine-on-time" program for elderly patients, in which it specially packages medicines by dosing and time of day, provides a medication calendar and automatically arranges for refills.
Acton Pharmacy has doubled its staff over the past 10 years, with five full-time and 15 part-time employees currently. It has beefed up its delivery service from a few days a week to five days, with home delivery now making up 20 percent of its prescription business. "The chains may have a drive through, but we bring it right to your door," Dinno said.
While pricing pressures from insurance companies and competition from chains pose key challenges, Dinno said mail-order prescription drugs - which began to take hold some 10 to15 years ago - pose the biggest threat to independents' revenues. More and more, he said, insurance companies push customers to mail order drugs. Stores like his and even the chains, he said, can't compete price-wise since mail-away programs provide three months supply for the price of one month.
Still Dinno is encouraged. "There will always be room for independent pharmacies. People are sick and tired of the box stores", he said.
Service gaps
David Benoit, vice president of patient care services for Framingham-based pharmacy buying group Pharmacy Northeast Service Corp., said he doesn't expect a "landslide" increase in the number of independent pharmacies. He does, however, see a strong niche for current independents as consolidation has left gaps in serving specialized customer services.
Benoit said his company's membership - encompassing Maine, Massachusetts and Connecticut - dropped from 750 pharmacies 10 or 11 years ago, to 250 at present. It has been at 250 for the past three years, he said.
Benoit also noted that more pharmacists are attracted to the idea of owning their own businesses and working more closely with patients. And, he said, the prospects for doing so look good to him.
"The day of dealing with patients more closely as a pharmacist is closer than ever because medications are more complicated, more specific to individual patients' genetic make up."
In other words, he added, "Pills aren't simple any more."
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