Community drugstores are opening their doors across Delaware, as entrepreneurial pharmacists are eager to prove they can take better care of customers than the chains that dominate the First State’s pharmacy market.
[caption id="" align="alignright" width="250" caption="The recently opened Rodney Village Pharmacy in Dover is one of only 18 independently owned and operated drugstores in Delaware."]
In recent months, Shayona Pharmacy debuted in Delmar, Nanticoke Pharmacy opened in Seaford and Rodney Village Pharmacy launched in Dover.
In July, First State Pharmacy set up shop in North Wilmington, founded by a pharmacist exiting Walgreens. Atlantic Apothecary opened in Smyrna, started by another former Walgreens druggist.
“People are yearning for great customer service,” says Chas McCormick, owner of First State. “They want to have a conversation with a pharmacist who knows them by name, which you can’t get at a corporate chain where the pharmacist is answering the phone and ringing up sales because the company won’t hire enough help.”
Of the 149 designated drugstores in Delaware, only 18—or 12 percent—are independently owned and operated, according to the National Community Pharmacists Foundation, a Washington D.C.-based trade group. That will rise to 19 later this month, when Dover Community Pharmacy opens.
Chains hold the lion’s share of the market, with 77 Walgreens, 47 RiteAids and five CVS stores. Big box discounters, warehouse shopping clubs and supermarkets are part of the mix, as well. Walmart, Target, Costco, BJs, ShopRite and other retailers also operate in-store pharmacies.
“Delaware is unique in that it is so heavily dominated by chains,” says John Norton, NCPF spokesman. “North Dakota is on the other end of the spectrum because chains aren’t allowed there unless they are locally owned.”
In contrast, the split is nearly even in neighboring states, according to NCPF statistics. In New Jersey there are 733 chain stores and 716 independent pharmacies. In Pennsylvania, the tally is 1,097 chain stores and 1,004 independents. And in Maryland, there are 370 chain stores and 363 independents.
So how did the mix in Delaware get so lopsided? Carl June, owner of Cape Pharmacy in Lewes, says the swing started more than 40 years ago with two family-owned regional chains. Happy Harry’s began acquiring community drugstores in the northern part of the state. Edgehill Drugs, founded in Dover in 1957, bought up downstate pharmacies. Edgehill was acquired by RiteAid in 1999.
“A lot of pharmacists were about to retire and the chains went around snapping up stores,” says June, who has been in the business for 40 years.
[caption id="" align="alignleft" width="250" caption="Atlantic Apothecary in Smyrna - like First State Pharmacy in North Wilmington - is owned by a former Happy Harry pharmacist"]
Both McCormick and Kevin Musto, owner of Atlantic Apothecary, are Happy Harry’s alumni. Both pharmacists say they would still be working for the company if it hadn’t been acquired by Walgreens.
“Pharmacists are putting in too many hours without enough help,” Musto says. “The idea is to streamline payroll in order to enhance corporate profits.”
Happy Harry’s operated under a different model, in keeping with CEO Alan Levin’s insistence on a high level of customer service. Pharmacist-managers were permitted to tweak the mix of merchandise in their stores in order to carry products requested by customers.
“Alan gave each store the autonomy to match the culture of their neighborhood,” McCormick says. “And if you had a concern, you could get on the phone and speak with him directly.”
Levin, now director of the Delaware Office of Economic Development, believes independents also will benefit from Walgreens’ recent split with Express Scripts, a decision that means America’s largest drugstore chain no longer accepts the insurance of an estimated 12 percent of its customers.
[caption id="" align="alignright" width="250" caption="First State Pharmacy in North Wilmington emphasizes it takes Express Scripts - which Walgreens recently stopped accepting."]
“It was a dumb move,” he says. “People who take their prescriptions some place else might not come back.”
Sheila Tucker, who owns Market Street Pharmacy in Wilmington, says she is seeing new faces at the counter.
“We have had a lot of people come to us because of Walgreens’ break,” she says. “It’s been very good for our business.”
For 20 years, she worked for various chains, growing increasingly frustrated with the emphasis on speed and productivity.
“They want the count, getting those scripts out, rather than patient care,” she says.
Tucker started looking for a pharmacy about the same time Greater Brandywine Village Revitalization Inc., a not-for-profit development group, came up with a wish list of businesses that would enhance the community. At the top was a neighborhood drugstore.
[caption id="" align="alignleft" width="250" caption="Market Street Pharmacy in Wilmington open as part of an effort to revitalize the Brandywine Village neighborhood."]
She opened Market Street Pharmacy in a shuttered dollar store eight years ago. Tucker works hard, putting in 60 hours a week or more, helping seniors to manage their medications, frequently conferring with doctors to find the most cost-effective treatments. On her way home, she might drop off medicine to a sick mother at home with small children.
“It is incredibly rewarding to take care of people,” she says. “I love being on my own, not being run by a corporation.”
Tejas Sheth, owner of Georgetown Pharmacy, converted a Laundromat to a drugstore last fall.
“I had wanted to buy a pharmacy but there is more demand now for community pharmacies than there is supply,” he says. “So I had to find a building and start from scratch.”
Before he went into business, Sheth worked for CVS and Walmart.
“The co-payment is the same if a patient gets a prescription from CVS, Walmart or me,” he says. “I think people will come to us because we offer more.”
Sheth and many other independent pharmacists offer compounding, in which components are combined to create a unique medicine. He goes online to look for drug manufacturer’s coupons that patients can use to save money.
“The only thing we can’t compete on is hours,” he says. “Patients are always saying, ‘I wish you were open later at night, I wish you were open on Sundays.’”
Happy Harry’s was a hybrid of sorts, a community pharmacy that offered extended hours and such conveniences as a dairy case.
The first store opened in Wilmington in 1962. Back then, it was known simply as Discount Center. The founder, Harry Levin, renamed the stores Happy Harry’s Discount Drugs in 1965 when he opened his third store, a reference to the nickname customers gave the warm, friendly businessman.
After Levin’s death in 1987, his son Alan took the reins. Happy Harry's continued to grow, dominating Delaware's drugstore scene. When the company was sold to Walgreens in 2006, there were 75 locations in Delaware, Pennsylvania, Maryland and New Jersey.
At the time, there were only seven independent drug stores in Delaware. That doesn’t surprise Mark Freebery of Milford, president of the Delaware Pharmacists Society. A longtime pharmacist-manager for Happy Harry’s, he left Walgreens to teach at University of Maryland Eastern Shore School of Pharmacy.
“The pharmacists at Happy Harry’s were a very satisfied bunch,” he says. “They had adequate support staff and a mandate from the top to take care of people and when Walgreens came in that went away.”
Walgreens spokesman Robert Elfinger says staffing of pharmacy techs and other personnel varies according to the volume of each store.
He says the adjustment in going from a family-owned business to a large corporation is different for each individual, and is “a matter of personal preference.”
“Naturally, interaction with top management at a large company will be different than at a small business,” Elfinger says. “There are people who thrive while working for a large company and the added opportunities it provides, while others may prefer to work in a smaller environment.”
He says Walgreens is dedicated to making a positive impact for the people it serves.
“We are focused on making our stores more relevant to their local communities and bringing more decision-making to the local level,” Elfinger says.
Levin says he decided to sell Happy Harry’s because federal regulations and shrinking compensation from insurers were making it more cumbersome to do business. In 2006, he felt most comfortable accepting an offer from Deerfield, Ill.-based Walgreens.
“I had known the Walgreen family for years,” he says. “But today, no one in the family is active in the business and Walgreens is a very different company.”
Levin predicts independents will continue to gain ground on Walgreens, CVS and RiteAid.
“They are a great group of people and I am rooting for them,” he says.
He still gets his prescriptions filled at Walgreens in Greenville, where he has known the pharmacist for 15 years.
“But if she ever left, I would head to the nearest community drugstore,” he says.
Musto and McCormick have integrated much of the Happy Harry’s model into their pharmacies. Both are open on Sundays. McCormick, whose motto is “put the Happy back into your community pharmacy,” sells milk and other conveniences.
So, will the momentum continue? June, at Cape Pharmacy, says that will be determined in large part by what happens when older independent druggists retire.
“If there is no one in the family to take over, the plan must be to sell the business,” he says. “Chains have a lot more money than a young person just coming out pharmacy school.”
To bolster succession plans, the NCPF is heading to pharmacy schools to woo the next generation of druggists. The trade group is helping to establish junior partnerships in which young grads will get a small percentage of a business in anticipation of taking over the pharmacy some day.
“In the end, we believe they will have more satisfaction and make more money owning their own pharmacies,” Norton says.