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On this bonus episode of Building Local Power, host Zach Freed speaks with Jim Hrncir, owner of Las Colinas Pharmacy in Irving, Texas. Zach and Jim discuss:
- The high level of care independent pharmacies are able to provide to their patients, especially when compared to chain pharmacies like CVS.
- Why the growing power of Pharmacy Benefit Managers is negatively impacting independent pharmacies.
- How Jim’s pharmacy has responded to the COVID-19 pandemic and adapted to meet the changing needs of patients and their community.
“Pharmacists are the most accessible healthcare professional out there, and that’s proven in study after study. So, we’re on the front lines, we’re ready to talk to people… We have 30 employees here, ready to help. I don’t have to have 30 employees, but I can’t stand not taking good care of my patients.”
| Jess Del Fiacco: | Hello, and welcome to the Building Local Power podcast. I’m Jess Del Fiacco, the communications manager, here at the Institute for Local Self Reliance. We’re bringing you another bonus episode this week, as we try to share the most current stories from communities and small businesses that are affected by the Coronavirus pandemic. |
| Jess Del Fiacco: | I’m here with Zach Freed, who’s a researcher with ILSR’s Independent Business initiative. Zach, can you tell us a little bit about today’s guest on the show? |
| Zach Freed: | Yeah, thanks Jess. I spoke with Jim Hrncir, who’s a pharmacist and the owner of Las Colinas Pharmacy, an independent pharmacy in Irving, Texas, that specializes in compounding specialty medications, and also traditional pharmacy practice. |
| Zach Freed: | Right now, states, cities, and the Federal government are working to shore up small businesses around the country. Pharmacists like Jim are on the front lines of ensuring that patients can access life saving medications, and other goods like hand sanitizer, which helps slow the spread of COVID-19. |
| Jess Del Fiacco: | Yeah. So, how are independent pharmacies like Jim’s better able to serve their communities, in a situation like this? Compared to, say, a CVS? |
| Zach Freed: | Yeah. As Jim says in the interview, independent pharmacies have a unique set of relationships with their customers that big chains like CVS might not. They’re also able to be more nimble. As you’ll hear, Las Colinas was quick to start making its own hand sanitizer. Yeah, they just have the kind of connection to the communities where they’re located in, that a big chain might not. |
| Jess Del Fiacco: | Jim talks a little bit in the interview about how the Federal response to this crisis has pushed people towards chain pharmacies. Also, he talks about how pharmacy benefit managers have been capitalizing on the crisis. Can you just give people a little bit more context, before we dive into that, as to what people PDMs are? And, what they were doing before the crisis, and then what they’re doing now? |
| Zach Freed: | Yeah, definitely. PDMs, or pharmacy benefit managers, are companies that manage drug benefits, so prescription medication benefits for health plans. They will negotiate with drug manufacturers on behalf of a health plan, whether it’s a state Medicaid program, or a workers’ comp program, they will negotiate on drug prices on behalf of the health plan. Then, reimburse pharmacies for the cost of medications, also on behalf of a health plan. |
| Zach Freed: | Before this crisis, PDMs were well known for under reimbursing pharmacies while over charging health plans, as a way to skim money off of each transaction. As a result of this conduct, which has been well documented by states going back almost a decade now, independent pharmacies are having to shut their doors because of under reimbursement from PDMs. Basically, these companies are bleeding Indie pharmacies dry, which benefits chain pharmacies, many of which have [inaudible 00:03:07] relationships, or outright own the big PDMs. |
| Zach Freed: | For instances, the biggest chain pharmacy, CVS, owns one of the biggest PDMs, Caremark. So, there’s this conflict of interest that exists, to the detriment of smaller businesses, like Jim’s. |
| Jess Del Fiacco: | Thanks for that, I think that’s just helpful for people who might not be super familiar with this issue area, to understand going into this. |
| Jess Del Fiacco: | I was just struck by one thing in particular that he said, I think a couple of times, which is also what I think this conversation boils down to, is that greed does not make for good healthcare decisions. Especially right now, we need people who know their patients, and know how to take care of them, and their communities. We need them to stay around, we don’t want to lose them in this crisis. |
| Jess Del Fiacco: | Is there anything else you want to add, before we get started? |
| Zach Freed: | Nope, just to hope you enjoy the episode, and please remember to like, rate, and subscribe on iTunes. Without further ado, let’s get into the interview. |
| Jess Del Fiacco: | Sounds good. Thanks, Zach. |
| Zach Freed: | This is Zach Freed, from the Institute for Local Self Reliance. On the podcast today, I have guest, Jim Hrncir, of Las Colinas Pharmacy in Texas. |
| Zach Freed: | Jim, thank you for joining us today. |
| Jim Hrncir: | Glad to help. How are you, today? |
| Zach Freed: | Doing well. We’re just working from home, and only leaving to go to the grocery store, and take walks, and stuff like that. How about yourself? |
| Jim Hrncir: | Doing the same. We’ve gotten more and more responsible as we’ve gotten farther into this, and with 30 employees, that’s even a greater challenge that it might normally seem. As an essential service, we’re on the front lines every day, here. |
| Zach Freed: | Mm-hmm (affirmative). Tell me about your pharmacy. What lead you to get into this business? |
| Jim Hrncir: | Way back when I was a kid in West Texas, growing up, there were a couple of pharmacists that I’d really admired. I thought that they really seemed to be somebody that I could emulate. And so I went to college, got into pharmacy school, and had the idea that I wanted to have my own pharmacy. Within a few years, I had the opportunity, and did so. |
| Jim Hrncir: | So, in 1984, we opened Las Colinas Pharmacy, brand new business from scratch. |
| Zach Freed: | How are independents like yours better able to serve communities in a pandemic situation like this? |
| Jim Hrncir: | You know, this is unseen territory, we’d never experienced this before. I mean, I’m 64 years old, and I’ve never come across anything like this before. So, it’s been quite a challenge for us. Luckily, we started doing hand sanitizer the very first day, because hand sanitizer was immediately unavailable. Gosh, I bet I made 20 or 30 gallons of hand sanitizer. If I had more alcohol, I would make a lot more. |
| Jim Hrncir: | We’ve also … Kind of cool, in that as a small pharmacy, we’re able to be nimble. We’ve been able to use innovation to try to help our community, and our patients because our patients depend on us. We have, really, a tight relationship with our patients. You know, being an independent pharmacy, all our patients know our names, kind of like going into the bar at Cheers, everybody knows your name. It’s a great way to practice, it’s a great way to impact lives and health. |
| Zach Freed: | Some of the Federal response that we’ve seen so far has involved steering patients to chain pharmacies, like CVS. How do you think the Federal, and also the state response, to COVID-19 has taken into account independents like your pharmacy? |
| Jim Hrncir: | I think they’ve been overlooking us. I mean, we’re an incredible resource. Matter of fact, pharmacists are the most accessible healthcare professional out there, and that’s proven in study after study. So, we’re on the front lines, we’re ready to talk to people. Independent pharmacies have always had a reputation for taking the time to do that, we have 30 employees here, ready to help. I don’t have to have 30 employees, but I can’t stand not taking good care of my patients. |
| Jim Hrncir: | Most of the independents that I know have a greater employee base than do our chain counterparts. They’re trying to satisfy stock holders. That doesn’t mean the pharmacists and the technicians at chains aren’t good folks, but they’ve got higher ups that are looking to maximize the dollars, which means minimize care to patients. We don’t do that. We talk the talk, and then we walk the walk with our patients, taking care of them. |
| Zach Freed: | Mm-hmm (affirmative). One of the things that we study at the Institute of Local Self Reliance is the power of pharmacy benefit managers, and how these middle men have taken advantage of policy changes, and anti-trust, and their position in the supply chain, to squeeze independent pharmacies. Has your pharmacy encountered any issues like that? Can you speak to PDM power, as a specialty pharmacy, and a compounding pharmacy? |
| Jim Hrncir: | Yeah, interesting. There were a few bad actors. There was some compounds that had a high degree of remuneration. I mean, gosh, they were $12,000 to $15,000 a compound. Most ethical compounders did not get into that business, but there were some unethical businessmen who bought pharmacies, and got into that business. Basically, the PDMs finally caught on, the insurance companies finally caught on, that these guys were unethical. |
| Jim Hrncir: | Instead of just, “We’re not going to pay for those unethical compounds,” they said, “We’re not going to pay for any compounds.” Matter of fact, they went to pharmacies like mine, that do half compounds, half traditional prescriptions, so we have a foot in both areas of care, and they said, “We’re not going to even let you have a contract with our PDM.” They canceled our contract, in spite of the fact that we weren’t one of those unethical guys. |
| Jim Hrncir: | I had doctors in this area, who were the heads of the largest groups in North Texas, write them letters and say, “We actually have to have this pharmacy in the network, because they provide much better care, they save patients lives every day, and we have to have them.” They wouldn’t even return their calls, wouldn’t even return their letters. |
| Jim Hrncir: | Yes, the PDMs, unfortunately, they’re all about the dollar, they’re making tremendous profits. What are they providing for the patient? Nothing, there’s not value to what they’re doing. Their original intent was a good idea, it was to provide some co-pays assistance, it was to provide looking at, maybe, the best choices in formularies, for patients, the most productive for the healthcare system. But, what they got into was maximizing profits. When you maximize profits, I don’t know about you, but I’ve never seen a business where greed made a business make better decisions. Have you? |
| Zach Freed: | Yeah, exactly. No. |
| Zach Freed: | Final question. We’ve seen tremendous amount of losses in the number of independent pharmacies in the United States over the last decade or so. What do you think the landscape looks like for independents like yours, after this crisis? |
| Jim Hrncir: | My biggest fear, and I’ve talked to some of the top economists in the country … I was really concerned early on in this thing. I thought, You know what? If they start doing all this distancing, and people staying home, and all that, then small business, which makes up over 90% of businesses in America … I think it’s 95%, as I understand. Just think about all these small businesses, 45% of the GDP in the country. If all these small businesses have one to two weeks reserves, cash stores, if they run out of those, what’s going to happen? They’re going to close. |
| Jim Hrncir: | This COVID-19 Act may help a little bit, but I’m worried about the landscape as being, look at all these small businesses who employ a lot of people in this country, what if they close? Even if the bailout money doesn’t save them, what’s going to happen? That means the disposable income, which drives this entire economy, is going to be in the toilet, and that means that the economy’s going to be in the toilet, and that means that people coming to Las Colinas Pharmacy, and other independent pharmacies, they’re going to making choices about what they have to have, versus what they would like to have for good quality of life. |
| Jim Hrncir: | That concerns me because they may decide, “You know what? Even though those hormones make me feel better, and I know it probably reduces my risk of breast cancer, and heart disease, and stroke, and dementia, I can get by without them.” They start making choices like that, which have huge consequences on their longterm health. That also has huge consequences on guys like me, who depend on those patients for our livelihood, and to be able to take care of other patients. Yeah, it scares me. |
| Zach Freed: | Thank you for your time, Jim. I really appreciate you taking some time out of what I’m sure is an extremely busy time for you in your business, and hope to have you on again sometime. |
| Jim Hrncir: | Okay, Zach. Thanks for doing the good work you’re doing. |
| Zach Freed: | Thank you. |
| Jess Del Fiacco: | Thank you for tuning in to this episode of the Building Local Power podcast, from the Institute for Local Self Reliance. You can find links to what we discussed today by going to ILSR.org, and clicking on the show page for this episode. That’s I-L-S-R.org. |
| Jess Del Fiacco: | While you’re there, you can sign up for one of our many newsletters, and connect with us on social media. Finally, you can help us out with a gift that helps produce this very podcast, as well as our other research and resources. Once again, you can help us out by rating this podcast, and sharing it with your friends on Apple Podcast, or wherever you find your podcasts. |
| Jess Del Fiacco: | This show is produced by Zach Freed, Sushmita Shrestha, and me, Jess Del Fiacco. Our theme music is Funk Interlude by DysFunktional. For the Institute of Local Self Reliance, I’m Jess Del Fiacco, and I hope you join us again next week, for the next episode of Building Local Power. |
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Audio Credit: Funk Interlude by Dysfunction_AL Ft: Fourstones – Scomber (Bonus Track). Copyright 2016 Licensed under a Creative Commons Attribution Noncommercial (3.0) license.
Photo courtesy of Jim Hrncir.
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