Harvey Drug prepares to close its doors as PBM pressure mounts

NEWTON, Kan. (KWCH) - A pharmacy in Newton will permanently close its doors at the end of the week due to a challenging business decision. When asked how difficult it would be to say goodbye, pharmacist and owner of Hesston Pharmacy and Harvey Drug, Sandie Kueker responded, “I don’t know if I can answer that question without crying. It’s going to be really hard.”

Harvey Drug and Gifts will complete its final day of operations on Friday, and the interior is gradually being cleared out. Kueker and her husband, Adam, opened this location in downtown Newton in 2018, expanding from their Hesston Pharmacy, which is located approximately eight miles away.

“We had a lot of patients that we were servicing over here in Newton, and we knew that some of our patients had transportation issues,” said Kueker. “We just met with a lot of different members of the community and came to the conclusion that we were feeling called to open a location over here.”

This pharmacy has been serving a significant number of patients, filling more prescriptions than we ever had before, according to Kueker. But she said PBMs, or pharmacy benefit managers, have been cutting their business’ reimbursement every year for the last several years as the costs continue to rise.

“We’re to the point where we had to think, do we want to decrease our staff and not have as high of quality of customer service? Absolutely, not. We’re not going to do that,” Kueker said.

She said PBMs are negatively affecting independent pharmacies across the country. Factfinder looked into this issue earlier this year. PBMs serve as intermediaries between insurance companies, pharmaceutical firms, and pharmacies.

The contracts offered by PBMs determine the reimbursement price for medications, which has been dropping even further and is often lower than what it costs pharmacies to purchase and dispense the drugs. Additionally, the industry has seen significant consolidation.

Kueker explained that not signing those contracts would mean a large portion of their patients would no longer be in-network.

“When you have three PBMs, and they’re controlling 80 percent of the prescriptions, which ones do you cancel? Which group of patients? Because we’re healthcare providers, we are taking care of people; who are we going to tell we can’t take care of you anymore?” said Kueker.

With reimbursements dropping again this year, the decision was made to close Harvey Drug to reduce overhead costs associated with the building and duplicate equipment. Operations will be consolidated back into Hesston Pharmacy.

“We’re having to make tough choices, and that’s happening to pharmacies everywhere, and the worst part for me is it impacts our patients,” said Kueker.

She added that it’s been an incredibly difficult decision, but one they had to make.

“It’s more important to us to keep taking care of the patients and doing what we need to do, so we’ve had to make a hard choice, but we’re not disappearing, and we’re still going to be out there fighting,” said Kueker.

As they consolidate into one location, their staff will be joining them, and many patients have expressed that they will make the drive to Hesston. For those who can’t, Kueker mentioned they are looking for ways to ensure these patients continue to receive the care they need. They are also collaborating with their community partners to ensure uninterrupted care.

“I guess when we close the doors, if anything, it will motivate us even more to fight for change in the industry,” she said.

Kueker also pointed out that when a pharmacy in a rural community shuts down, the impact is more significant, often resulting in “pharmacy deserts.” Pharmacists are advocating for legislative reforms at both the state and national levels.

According to the Kansas Pharmacists Association, five pharmacies have announced closures in the state this year, bringing the total since 2015 to 90 pharmacies.