Thanks for the Warning

Dear Colleague,

Perhaps you saw this headline this week over a Bloomberg News story, "CVS to buy about 200 independent pharmacies a year." The story went on to quote CVS Caremark CEO Tom Ryan at an investor conference June 2: "It's just tough for them to survive...We're going to continue to do that. We don't operate the stores; we move them into our stores."

Ryan doesn't really mean "move." He means "close." He means increasing market share by eliminating competition. He means the company that controls reimbursement for independents and can subject them to harassing audits at will wants 200 of them to stop serving their communities each year.

I could rant on, but that won't accomplish much. Just rest assured, we are bringing Ryan's remarks to the attention of Senate staffers and others working on an antitrust oversight hearing where the FTC will testify next week. We fully anticipate that the FTC will consider this aspect of CVS Caremark's business practices in its ongoing investigation of the chain/PBM/mail order conglomerate.

In situations like this, independent owners often ask themselves, "But what can I do?" Keep independents independent is what you can do.

I know "cash-on-the-barrel head" offers and promises of "just walk away and we'll hire you and your staff and you can keep taking care of your patients" sound easy and attractive. But please, please first give potential independent buyers a chance. They are out there. We know many of them.

Our ownership workshops are overflowing. More than 90 potential buyers attended our most recent one. On average about 100 new independents have been opening a month since 2008.

And believe me, there are many financial options and institutions out there that can rival those through Woonsocket, R.I. Our Management Institute can help you and your buyer find them.

In addition, our new website for the Independent Pharmacy Matching Service (IPMS) will be launching soon. It will establish NCPA as the connecting point for pharmacists who want to own an independent community pharmacy and for those who want to sell to an aspiring or already established owner.

The website won't compete with existing pharmacy broker services. Instead, it will augment them by offering an anonymous forum for posting and viewing sell/buy listings. An owner can place an ad for the pharmacy to attract buyers who might not initially contact a broker, then refer the interested buyers to the broker for vetting if desired.

The site also will help owners staff their pharmacies and expose students to independent pharmacy. Owners can post junior partnership opportunities and students and young pharmacists can search for them. These partnerships are a great way to plan an orderly transition of ownership and ease into retirement.

NCPA wants to be independent pharmacy's source for matching buyers and sellers and employers and employees. If you're seriously thinking about handing over the keys, give someone a chance who'll provide the kind of care and service to the community you've been proud to give.

Regards,

Bruce Roberts

NCPA