The Willow Glen Resident

Family Pharmacy closes after 48 years in business

Owner blames low reimbursement rates from HMOs

By Christine Frey

Although sale signs cover the windows of the Family Pharmacy, there is no merchandise left to be sold. The store shelves have been empty for days and will not be restocked. After 48 years of business, the Lincoln Avenue pharmacy closed June 26.

Owner Donald Lew, 43, says HMO insurance programs have made it difficult for independent pharmacies to stay in business; the reimbursement rates they offer pharmacies for their services are "unreasonably low." A prescription sale of $100 would only generate Lew a profit of $5 to $6. "It's hard to make it on that," says Lew, who owned Family Pharmacy for five years.

He adds that the reimbursement rates are dropping. PacificCare and Secure Horizons decreased their rates 25 percent this year. Next year they are expected to lower it another 10 percent.

Earning less profit makes it difficult for Lew to pay his wholesaler; the insurance companies do not reimburse him until nearly two weeks after his payments are due. "It was a pretty black-and-white decision [to close the store], although an emotional one," he says.

To earn a profit, many independent pharmacies sell gift items. "That store would make more with that little knickknack you buy than filling your prescription," he says.

Lew, vice president of the Bay Area Pharmacy Group, refuses follow such practices. Recently a friend offered to sell him a gift/pharmaceutical store, but Lew was not interested. "It's a Hallmark store that has a pharmacy in the back. I don't want to own a gift shop or a Hallmark store," he says. "If we're doing good pharmacy work, we should get paid for doing good pharmacy work."

Unfortunately, Lew says, not many pharmacies are paid for that. "I think it's still bad for the profession to accept low reimbursement rates. It lessons the importance of good pharmacies and proper pharmaceutical services," he says.

Lew is now working at the Rite-Aid Pharmacy on Almaden Road, where his patient files have been transferred. He is having some difficulty adjusting to the impersonal atmosphere of the chain store. "It's a different world out there," he says.

At Family Pharmacy, Lew answered detailed questions and provided medical information for his 600 customers. He could usually fill a prescription in five minutes. Now at Rite-Aid, his customers wait up to an hour for their medicine and receive little, if any, personal attention. "I can see on their faces that it's not what they're used to," he says.

Family Pharmacy is Lew's second independent pharmacy. He previously owned a store in Berkeley. "[Closing the Family Pharmacy was] one of the hardest things I've ever had to do because I knew it would impact a lot of families, a lot of lives," he says.

"I have enjoyed immensely the services we have provided, the multitude of questions we have answered, the drug problems we have resolved and, most of all, seeing people benefit from our services," he wrote in a letter to his customers. "If I could afford to continue operations, there isn't anything I would rather be doing."

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