Well, it's certainly true that we've seen a tremendous decline in the number of independent pharmacies in this country over the past few decades. Even the number of small chains has greatly decreased, as they have been acquired by companies like CVS and Rite Aid. The big three pharmacy chains have even been able to penetrate the New York City market to a good degree (CVS and Rite Aid have been increasing their presence their over the last 20 or so years, and while a few Walgreens stores were always there, their recent acquisition of Duane Reade greatly increased their share of the NYC market). I believe that this is sad.
Anyway, what I don't understand is why people seem, predominantly, to place so much blame on companies that issue prescription discount cards. Really, I believe one needs to look at a variety of factors to understand why it is so difficult for independents. Certainly one of the major factors has been the increasing dominance of the three big chains.
The truth is that a very large number of pharmacies (and I'm not saying all) -- inclusive of both chain stores and independents -- enormously inflate the prices prescriptions, particularly generics, to cash customers who simply pay a pharmacy's regular retail cash price.
Discount cards, IMO, essentially arose because of this. Up until the 1980's, prescription drugs were not nearly so costly as they are now, even when adjusting for inflation. In fact, people who had health insurance up until that time often did not have prescription insurance. But when the costs of prescriptions began to spiral, prescription insurance plans became very common among those with health insurance.
Some people here seem to blame companies that issue discount cards for effectively forcing pharmacists to lower their charges for prescriptions. But in reality, if any type of company is to blame initially, it would be prescription insurance companies. Depending upon the prescription insurance plan, druggists would sometimes be forced to charge a flat fee of just a couple of dollars above cost for a prescription. And, pharmacies -- both independent and chain alike -- had no choice but to accept these plans because if they didn't they knew that their customers would simply go to a competitor pharmacy that did. This was roughest on independents, of course, since they relied much more heavily on profit from prescriptions than big chains.
What some pharmacies understandably did to try to offset this was to significantly increase the markup, particularly on generics, to cash paying customers. So, in essence, cash customers -- who often can least afford to do so -- have been subsidizing the already reduced prescription costs of those who have prescription insurance.
All companies that issue most of these discount cards did was to seize upon this, and negotiate a discount for prescription drug prices with pharmacies. While no pharmacy had to accept any of these cards, most did because, as with insurance plans, pharmacies knew that if they didn't that they faced the possibility of losing their cash customers too. And it's not as if major prescription insurance plans now don't negotiate discounted prices. In fact, their negotiated prices are probably the lowest of all -- sometimes significantly below that of a discount card, depending on the card and the drug.
It's a very unfortunate situation for both independents and cash customers now, since frequently neither have sufficient means -- whether it be to stay in business, or to afford the cost of a drug.
Please note that I am not affiliated with (do not own nor have any financial interest in) any prescription drug plan, nor with any major pharmacy chain.
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