Shoprite closing in-store pharmacies in Niskayuna, Albany

Low reimbursement and falling sales cited
The Niskayuna ShopRite is shown in the summer of 2017.
The Niskayuna ShopRite is shown in the summer of 2017.

Categories: Business, News, Saratoga County, Schenectady County

NISKAYUNA — Two more pharmacies are shutting down in the Capital Region, as the supermarket chain that operates them is no longer willing to continue absorb losses on their operation.

The pharmacies in the Shoprite stores in Niskayuna and Albany are transferring their patients’ prescription records to CVS.

The move comes just two weeks after Aumiller’s Pharmacy — a State Street landmark in operation for more than a century, and the last independent drug store of the dozen-plus that once operated in Schenectady — abruptly closed its doors and transferred its records to a Walgreens store.

The two very different operations — small neighborhood store, chain of large supermarkets — gave very similar reasons for their closures: Costs too high and reimbursement too low in an era when pharmacy benefit managers control so much of the pharmacy industry.

ShopRite, operated by Wakefern Food Corp. in New Jersey, told The Gazette via email Tuesday that decreasing sales volume at the Niskayuna store also factored into that decision. It thanked customers for their patronage and patience, and said their files would be available at CVS starting Thursday.

An employee at the Albany ShopRite confirmed that store’s pharmacy also is closing.

Supermarket operators would no doubt like to make money with their pharmacies, but there are benefits beyond drug revenue: An in-store pharmacy builds a relationship with a group of customers who have many other shopping choices, and each trip someone makes to pick up meds is a potential grocery run, as well.

Steve Moore, president of the Pharmacists Society of the State of New York, said more than 2,000 pharmacies went out of business nationwide from mid 2018 to mid 2019 and the pace has quickened since then. These are not just standalone independent stores but chain locations as well, he said.

Pharmacy benefit managers — PBMs — “have reduced reimbursement to the point where it’s impossible to stay in business,” Moore said.

PBMs that are vertically integrated, with retail, insurance and mail-order operations, are especially able to squeeze the price margins.

“They’re paying themselves differently than they’re paying the rest of us, and not just a little bit,” said Moore, adding that his own business, Condo Pharmacy in Plattsburgh, is teetering on the brink of failure. “It’s been going on a few years, it’s happening nationwide,” he said.

There’s no immediate relief in sight.

The Federal Trade Commission is reviewing the legality of PBMs being vertically integrated but has taken no action, Moore said.

The New York state Legislature in 2019 passed what would have been one of the strongest PBM regulatory measures in the nation, and Gov. Andrew Cuomo vetoed it over concerns about whether it conflicted with federal protections for retirees.

Cuomo does support the concept of PBM regulations, said Moore, who expects a revised PBM regulatory package to be reintroduced in the Legislature this year. But it would be only a first step, licensing PBMs and reviewing their operations. Any relief for New York pharmacies in the form of higher reimbursements is still years in the future, at best, Mooore added.

On March 3, the Pharmacists Society and its allies will rally in the Capitol in hopes of gaining some traction.

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