Behind the register at Damm Pharmacy in Derby, Kat Guasch is cutting pills in half for a patient.
“Since they are a little bit older, it makes it easier on them to take the medication,” Guasch said. “… We usually just try to make sure it’s as even as possible so they’re getting equal dosages each time they take it.”
Top-tier customer service like this is a central tenet of the locally owned business, said Jonathan Hansen, the pharmacy’s operations manager.
“It's a lot more patient centered, patient focused,” Hansen said. “Part of that is really making an effort to memorize faces and names. When our patients come in, a lot of the times we have their meds pulled without having to ask them who they are.
“And I think that's a completely different experience than when you're standing in a line 10 deep.”
Damm Pharmacies is owned by Dared Price, who lives southeast of Wichita in Winfield. He owns seven pharmacies in total, all in Sedgwick, Butler or Cowley counties. Most have been around since the 1970s and ’80s, but he bought them in 2010.
Price says independent pharmacies like his focus on what’s best for customers instead of stockholders. But he says the business is increasingly plagued by challenges – namely low reimbursement rates for medication it sells – that are making it difficult to stay open.
Tessa Schnelle is the president of the Kansas Pharmacists Association’s board. She says these struggles have led to an uptick in pharmacy closures in the state in recent years. One analysis by a national trade organization found the number of independent pharmacies in Kansas dropped 12% between 2010 and 2019.
Though the number of independent pharmacies nationally has stayed steady since 2000, rural pharmacies specifically have suffered. From 2003 to 2021, the number of independently owned retail pharmacies declined in rural areas around the U.S. by 16 percent, according to the Rural Policy Research Institute.
That’s contributed to pharmacy deserts across the state – places where residents must drive more than 15 minutes to access a drugstore. According to a 2021 report by GoodRx, Kansas is one of four states with the most counties lacking sufficient access to a pharmacy.
“Imagine if I'm 80 years old, and I live out of town,” Schnelle said. “And I'm told that if I'm going to go get my medications, I need to drive 30 minutes into town to get them at the cheapest price.
“What happens when I get sick? What happens when I can't drive to go get my medications? Now, I'm not taking my medications.”
Owners of independent pharmacies say they struggle to make a profit on the drugs they sell. Price’s pharmacies buy medication in bulk to then sell to customers, who typically use their insurance to pay for the drug.
But Price says, often, his business isn’t reimbursed for the full cost of the drug by pharmacy benefit managers. These companies are essentially middlemen who help manage prescription drug benefits on behalf of health insurers.
“The reimbursement for most medications is very unfair at this point,” Price said. “ … Ninety percent of the time, we're underpaid on prescriptions. That makes it challenging.”
Schnelle is researching pharmacy closures throughout Kansas for a graduate degree in public health. She says insufficient reimbursement rates are the number one reason stores are closing.
Another challenge Price cites is the market power of chain pharmacies, some of which also own insurance companies and pharmacy benefit managers.
Pharmacy benefit managers argue that they advocate for patients and health insurers by negotiating lower prescription drug costs, using their size to get bulk discounts from drugmakers. The Pharmaceutical Care Management Association, a trade organization representing pharmacy benefit managers, wrote in a statement to KMUW that it recognizes the vital function pharmacies serve in helping patients access prescription drugs.
“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,” the statement read. “A strong relationship between PBMs and rural pharmacies means a better experience and more affordability for patients, which is our shared priority.”
Lynn Shaffer owned Wellington Health Mart, an independent pharmacy about 40 minutes south of Wichita. It closed in September 2023. Shaffer cited similar frustrations with pharmacy benefit managers and reimbursement rates as the reason he couldn’t stay open.
In 2022, he and the other top pharmacist at the store stopped taking a salary.
“The store was not paying the two most highly paid positions – the pharmacists – because there was not enough profit to do that,” Shaffer said. “We were barely getting by, and we weren't even taking salaries.”
While rural independent pharmacies have struggled, those in bigger cities have been more successful. The number of independent pharmacies in U.S. metropolitan areas increased by 28.2% from 2003 to 2021, according to the Rural Policy Research Institute.
Dandurand Drugstore is locally owned and has operated in Wichita since the late 1970s. Jason Schmitz, director of operations, cites similar challenges as Price and Shaffer. He says staffing shortages and COVID also led to burnout among pharmacists recently.
But his business has succeeded at expanding in the last decade: Dandurand opened a new outpatient pharmacy in 2019 inside Wesley hospital.
“Before that patient even leaves the hospital, we’ve got their discharge meds in their hands,” Schmitz said. “So they’ve got a one-week supply, one-month supply … and then we help to follow up upon post-discharge with getting the prescriptions to their pharmacy of choice.”
The way Price’s Damm pharmacies have survived is to diversify the services offered, he said. No longer do his pharmacies just fill prescriptions. Now, they also sell medical equipment, give vaccines and compound drugs – which is where the store makes individualized medications.
“We're having to figure out ways that we can, you know, make money basically,” Price said.
“Pharmacies should be able to be in business by just dispensing medication. But if you're a pharmacy, and that's all you do today, you won’t stay in business. Which is a sad state of affairs, but it's unfortunately where we're at in our industry right now.”
