PAOLA, Kansas — On a Monday afternoon, Rockers Pharmacy is hopping. The pharmacy sits on the edge of a large parking lot off Baptiste Drive, the main drag in Paola, Kansas. The building used to be home to a John Deere dealership. It has blue steel awnings and a neon "open" sign hanging in the window.
Although the building is fairly new, Rockers Pharmacy feels nostalgic thanks to a retro soda fountain and ice cream counter. Owner and pharmacist Nate Rockers said the counter was added not only as a revenue stream, but rather as a way to slow people down.
"Our goal in this pharmacy isn't to rush people in and out of our door. It’s to get an opportunity to know our patients," Rockers said.
Lora Eggleston, who lives in the neighboring town of Osawatomie, said the soda fountain is one of many features she loves about Rockers. Instead of picking her prescriptions up at the drive-through, Eggleston goes inside.
"They always have new little gadgets out and candles and stuff. I always find something that I can't live without when I come here," she said.
Eggleston said she has been using Rockers Pharmacy off and on for around a decade. She said she prefers Rockers over big, chain pharmacies like CVS or Walmart.
"They know you. They get to know their customers. And it feels like family," Eggleston said.
In many independent pharmacies, like Rockers, customers are greeted by name. Pharmacists know a customer’s medical history, what is going on in their lives and what medications they’re on. This helps pharmacists catch mistakes in prescriptions and provide individualized care.
At Rockers, though a steady stream of customers come through their doors, the store’s profit margin paints a different picture. Rockers said in 2023, 20% of the prescriptions they filled were dispensed at a loss, and 50% were filled for only a $4 profit.
"When I say we dispensed at a loss that is just for the cost of the product,” he said. “That doesn't include the time and the resources that we had into fulfilling that prescription, including the bottle, the label, the labor."
Rockers Pharmacy isn’t alone. More and more pharmacies are closing nationwide, and patients are losing access to pharmaceutical care. These closures hit independently owned pharmacies the hardest, and in places like rural Kansas, they create pharmacy deserts, limiting access to pharmaceutical care.
That's on top of the big chains closing pharmacies as retail shopping changes. New pharmacy options and growing retail competition have led the major chain pharmacies to close many stores.
Pharmacy deserts
Sometimes when pharmacies close, they leave behind pharmacy deserts, where people have to drive 15 minutes or more to access a pharmacy. A 2021 study by GoodRx found that Kansas is one of four states with the most counties that lack access to adequate pharmaceutical care.
"That's because western Kansas is about as rural as you can get," said Tessa Schnelle, board president of the Kansas Pharmacists Association.
Schnelle is studying pharmacy deserts in Kansas for her master’s thesis. She said pharmacies are closing at alarming rates, and the trend is speeding up.
That’s bad news for rural Kansans, because often when their hometown pharmacy closes, they are stuck driving long distances for something like a vaccine they could get at a pharmacy. Or, they have to receive their prescriptions by mail without one-on-one help from a pharmacist.
Though pharmacies are closing all over the place, Schnelle said pharmacy deserts, as well as closures, are hard to track. Until recently, the only entities tracking them were state boards of pharmacy.
Schnelle said when pharmacies close, they are required to sell or transfer patient files at very low rates to another pharmacy.
"Oddly enough, who do you think that pharmacy is?" she said. "It's CVS or Walgreens … they benefit directly from the closure of an independent pharmacy."
Pharmacy locations are licensed by the owner, according to Schnelle, so when this transfer of files happens, all that changes on the licensing end is the license number. This makes it hard to know for sure how many pharmacies have gone under.
In recent years though, as the problem grows, Schnelle said more researchers are paying attention.
"It's now a topic of conversation because we have reached mission critical,” said Schnelle. “Like at this point, pharmacy will not look the same for our profession in 10 years."
But why are all these closures happening? Schnelle said to understand, people need to understand the role of pharmacy benefit managers, or PBMs.
What’s a PBM?
Schnelle said PBMs started in the late 1960s, as a way to lower prescription prices for consumers. They work behind the scenes as a middleman between insurance agencies and pharmacies, determining what patients pay for drugs and what drugs are covered by insurers.
But over the years, PBMs began to consolidate. Now, big insurance companies, like Aetna (which is owned by CVS), UnitedHealthcare and Cigna, own PBMs. And many of those companies own mail-order or chain retail pharmacies, too.
Schnelle said when companies began to consolidate like this, the business model for big chain pharmacies changed from being patient-focused to being focused on business and cost reduction.
"Which, there's nothing the matter with cost reduction — we all want to pay less to get more, right?" Schnelle said. "But it's when access is then stopping."
Independent pharmacies, however, still have to rely solely on their customers and local community to stay in business.
Schnelle said these big companies that own PBMs, insurance agencies, pharmacy chains and more, control the market and are pushing out smaller players like independently owned pharmacies. That’s part of the reason it’s getting harder and harder for small pharmacies to stay open.
Critics of PBMs, like Schnelle, argue they’re not saving money for consumers or employer health plans — and they’re pulling in huge profits.
A Brookings Institution study found the top three PBMs raked in more than $400 billion in combined revenue in 2022.
Schnelle said the PBMs are underregulated and that shifts the focus from patient care to profits. Oftentimes, she said PBM clients have no idea what’s going on behind the scenes.
"There's no transparency. That's the point," Schnelle said. "Even if they were saving money, they say, 'this is our super secret, like, way of saving money that we don't ever show you.'"
The trade group representing pharmacy benefit managers disagrees.
The Pharmaceutical Care Management Association, also known as PCMA, responded to comments made by Schnelle and other pharmacies with a statement.
The group said pharmacy benefit managers understand that independent pharmacies play a vital role in prescription accessibility for rural Kansans.
"In support of that critical role, PBMs support rural pharmacies in Kansas, and nationwide, through innovative programs that increase reimbursements and allow rural pharmacists to spend more time with patients," Katie Payne, senior vice president and spokeswoman for PCMA said in an emailed statement.
"A strong relationship between PBMs and rural pharmacies means a better experience and more affordability for patients, which is our shared priority," the statement continued.
In an emailed statement to the Kansas News Service, an Express Scripts spokesperson said through their programs like the IndepentRX Initiative, Express Scripts works to collaborate with and support independently owned pharmacies.
"We reimburse our pharmacy partners fairly and we offer enhanced options to support independent pharmacies because they play a vital role in providing healthcare to patients in rural communities," the statement said.
The statement said Express Scripts works "relentlessly" to advocate for clients and members by making medications more affordable and accessible.
"Most Express Scripts members pay less than $100 out of pocket for all their medications over a year," a spokesperson said. "We have a robust network of more than 65,000 independent, chain and grocery story pharmacies to provide consumers with convenient access to prescriptions at discounted rates."
Innovating to stay in business
To keep their doors open, independent pharmacy owners have had to innovate. Some expand their retail footprint, adding more merchandise, gifts or medical equipment to their shelves. Others focus on other services, like vaccine administration or testing for various illnesses.
Dared Price is a pharmacist and owner of seven independent pharmacies in central Kansas. He said pharmacy extras, like testing services, are another reason why access to pharmaceutical care is so important.
"You're able to come to my pharmacy and get tested for the flu, or for strep throat, or for COVID or for a urinary tract infection," Price said. "And if you test positive, then I'm able to prescribe a medication for you right there on the spot."
Back at Rockers Pharmacy in Paola, Nate Rockers said that in addition to offering more services, he’s had to keep his staff small because he cannot afford more workers. Rockers said he often works 12-hour days to keep everything running smoothly.
In addition to not being able to afford extra staff, Rockers said it can be difficult to find staff in rural areas. Rockers used to own a total of three pharmacies, two in Kansas and one in Missouri. But in December, he had to close the Missouri location because he was having trouble staffing it.
It’s not only difficult to attract job candidates to rural areas, but also, health care workers in general are fatigued after the pandemic.
"It's been an exceptional challenge over the last several years, frankly, to find staffing in this particular space," he said. "The pandemic put a lot of stress on our U.S. health care system and put a lot of stress on individuals who practiced in that space."
As a way to combat the issues they were seeing with PBMs, Price, Rockers and two other independent pharmacy owners in Kansas decided to start their own PBM called OREAD Rx.
"I mean, employers and patients are getting completely fleeced and ripped off when it comes to their health care," Price said.
Price said OREAD Rx is transparent with corporate employers and the company only makes money on an administrative fee. Rebates and other earnings are passed back to the employer.
"It's really giving employers back power of what their health care looks like and patients as well," Price said. "We're just not ripping people off."
Patient steering
Rockers said in addition to struggling with low reimbursement rates and staffing issues, he and other independent pharmacy owners have to worry about patient steering. He said PBMs send letters to his customers telling them it would be cheaper to get their prescriptions from a chain or mail-order pharmacy.
Rockers said even he gets letters advising him to use another pharmacy.
"When I fill a prescription for my child at my pharmacy, I receive a letter from Express Scripts, suggesting that my child should use the convenience of the mail-order facility that the PBM happens to own," Rockers said.
Rockers said it is hard to track if or how many customers he has lost to PBM steering. He said oftentimes patients begin medications for chronic conditions at his pharmacy and then stop refilling the medication.
"We see the drop off … I would have to surmise that the vast majority of those patients didn't just stop those medications. They just stopped getting those medications from the local pharmacy," he said.
Rockers, who has two children in high school, said small business owners generally plan to pass the business down to their kids as a part of their legacy.
But Rockers said he is so disappointed in the health care industry that he has told his children to steer clear of it.
"Because everything about what you do at this point in time is dictated by an entity either in the insurance space or in the pharmacy benefit management space that is ultimately putting profitability over outcomes," Rockers said. "I feel guilty saying it. But unfortunately, it's a reality."
Bek Shackelford-Nwanganga reports on health care disparities and access for the Kansas News Service. You can email her at r.shackelford@kcur.org.
The Kansas News Service is a collaboration of KCUR, Kansas Public Radio, KMUW and High Plains Public Radio focused on health, the social determinants of health and their connection to public policy.
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