The Burden Of Essential Business: How Independent Pharmacies Are Struggling To Stay Open

My parents’ pharmacy is a low slung, white brick building on the corner of East and Main. The front door is strung with silver bells; a jar of red licorice sits by the cash register; automatic scooters line the front of the shop, gleaming like cars at the races.

Most days, the pharmacy is a small business owner’s dream. The phone rings off the hook; and with twenty-nine employees, there’s always a birthday to celebrate. Behind the counter, my mom counts pills with what looks like a small butter knife, red bifocals dangling from the tip of her nose. My dad handles medical equipment and deliveries; he’s on a first-name basis with every hospital discharge planner in the county. Regular customers pour in and out, stopping by for a tube of lip balm or a pair of compression stockings. Even after two decades in an industry notorious for burnout, my parents are happy to help.

Since shelter-in-place orders took effect last month, business has changed. While the rest of Main Street packed up and closed shop, my parents briefed their employees on social distancing and distributed bottles of hand sanitizer. Under government guidelines, pharmacies, along with grocery stores, laundromats, and gas stations, are classified as essential businesses: to preserve societal health and function, the government requests that these operations keep their doors open. However, the risks are enormous; protective equipment is in short supply, and because many coronavirus carriers are asymptomatic, it’s difficult to differentiate a healthy customer from a sick one.

Despite haunting death tolls in Italy and New York, my parents have kept the pharmacy open. They serve a large percentage of the county’s retirees and nursing homes; if they stopped filling prescriptions, these patients would be at immediate risk. There aren’t enough N-95 masks for everyone, so my mom wraps a bandana around her mouth and prays for the best. Meanwhile, my dad calls customers with multiple comorbidities or respiratory issues; they don’t need to worry about picking up their prescriptions from the pharmacy; he’ll have them delivered. Their employees step-up, offering to take on larger workloads on days where their colleagues, many of whom have young children, elect to stay home.

This scene is far from unique: Independent pharmacies nationwide are doing everything they can to support the communities that support them. However, unless these pharmacies receive federal assistance, they won’t be able to keep it up for much longer. According to the National Community Pharmacists Association (NCPA), below-cost reimbursement under Medicare Part D has caused gross margins to plummet. To stay open, independent pharmacies must fill more prescriptions – increasing their volume to make up for low margins.

COVID-19 has put these volume-dependent operations in a precarious position: there is almost no walk-in traffic, and because all non-essential hospital procedures have been postponed, there are significantly fewer prescriptions to fill. Despite this lack of income, pharmacies must afford payroll, rent, and utilities. Further, home prescription delivery is expensive; pharmacies must pay their delivery staff, as well as account for gas and vehicle maintenance. Thus, keeping independent pharmacies open during COVID-19 is costing significantly more than it’s paying. While most owners are doing their best to serve the community, they’re running on empty.

The Paycheck Protection Program (PPP), which offers small businesses forgivable loans, could give independent pharmacies the funds they need to stay open. However, the PPP program is flawed; it incentivizes banks to approve large loans (often solicited by franchise owners) over small ones (such as those an independent pharmacy might need). Thus, few independent pharmacies received loans in the first round of PPP funding.

On April 24th, the President approved an additional $310 billion in PPP loans. If independent pharmacies, many of which are running on-deficit to stay open, do not receive financial aid, they may be forced to close shop until quarantine ends. This would put millions of patients at risk, forcing them to transfer their prescriptions to other, already overwhelmed chain pharmacies.

Most independent pharmacy owners are willing to accept the burden of essential business: stay open for the sake of the community, even if there is no profit to be made. The trouble is, a lack of government aid could financially crush this resolution. Prioritizing independent pharmacy loans during the second round of PPP would help owners continue to serve their customers – many of whom are at high-risk for COVID-19. The alternative, which involves shut-up pharmacies and displaced patients, is grim.

Palak Patel is a medical student.

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