Mary Giamartino heads down the stairs from her office at Hotel Pharmacy.
Randolph T. Holhut/The Commons
Mary Giamartino heads down the stairs from her office at Hotel Pharmacy.
News

‘I had nothing left’

The closing of Hotel Pharmacy marks the end of family-run drugstores in Brattleboro — thanks, its owner says, to insurance and pharmaceutical industry pricing practices that made it impossible not to lose money

BRATTLEBORO — The closing of the 83-year-old Hotel Pharmacy on Elliot Street on Jan. 17 marked the end of so many eras like a Shakespearian tragedy without the poetry.

Much sadness. Many tears. Emptying shelves. Emptying space. A sense of emptying lives.

The end of family-run pharmacies in Brattleboro. The end of owner Mary Giamartino’s long-held desire to help people. The end of 20 important, well-paying jobs.

The end of a small community of people who depended on the staff of the pharmacy to fill its prescriptions, to listen to its health needs, and to personally provide needed help and advice.

And the end of Brattleboro’s image as a small Vermont town managing to escape the grip of national chains.

All during the closing weeks, ever since it was announced that Giamartino, 67, had sold her business to Walgreens, people were coming in a steady stream to say how grateful they were to have had the downtown pharmacy there — and how sad they were that it would be closing.

“All of the patients and people in the community have come in and been very grateful,” Giamartino said. “Many of them were crying.”

Giamartino, who had a haunted, hollowed-out look, was trying to hold back her own tears when she said that.

As she describes it, she lost her business to predatory pricing in the pharmaceutical industry. Middlemen, in league with chain pharmacies and drug insurers, appear to have up engineered drug prices and insurance reimbursements to their sole benefits, leaving independent pharmacies unable to afford to stay in business.

“There was just nothing left in the well,” Giamartino said. “I put everything I could into it to keep it going. But I had nothing left.”

Even with the sale of a thriving business to a major chain like Walgreen’s, Giamartino is not sure how much, if any, money she will recoup. She fully intends to pay all her bills; what is left, she said, might be only as much as $100,000. That is because she used up almost every bit of her own money to keep the pharmacy running.

“I got a couple of grants,” Giamartino said. “I used my personal finances to keep things going. My retirement fund. But there’s nothing left. I just couldn’t do it anymore.”

Jodi Harrison has worked for Hotel Pharmacy for 29 years. She said the last weeks were incredibly difficult for the staff.

“There’s been many tears,” Harrison said. “We’ve tried to make it as easy as possible for the transition, but we just found out about the sale on the Tuesday before Christmas. So we’ve really had to come together as a tech team.”

“It’s hardest on the patients,” she observed.

“I would always dig a little bit deeper than I think the box store is going to for these people,” Harrison continued. “I know that there’s not a lot happiness at Walgreens. And I’m not saying we’re perfect here, but we really did try to go above and beyond and do what we could for the patient. I think that’s important to say.”

A legislative look

Last year, the Legislature passed a bill, signed into law as Act 131, to investigate and possibly regulate the pharmaceutical industry in Vermont — including those middlemen — although any regulation would come far too late for Giamartino.

The state’s Department of Financial Regulation recently published a 68-page analysis of the law, written by Kevin Gaffney, the state agency’s commissioner.

His brief was “to study certain issues related to pharmacy benefit managers (PBMs), which act as an intermediary between health plans and pharmacies, and to deliver a report with findings and recommendations to the House Committee on Health Care and the Senate Committees on Health and Welfare and on Finance.”

Gaffney opened his analysis with this admission: “Prescription drugs represent a significantly expensive and exceptionally complicated sector of the American health care system.”

“Complicated” is the right word.

“To obtain prescription drugs, pharmacies contract with wholesalers either directly, as in the case of large chain pharmacies, or through third-party buying groups for smaller independent pharmacies,” Gaffney wrote. “The contracts control prices, payment terms, logistics, and financial incentives for meeting certain distribution thresholds.

“Pharmacies have some discretion in setting retail prices (also known as the ‘cash price’) for patients without insurance. However, the amount that a pharmacy is reimbursed for dispensing prescription drugs to insured patients is entirely determined by the pharmacy’s contract with pharmacy benefit managers.”

Smaller pharmacies “have little choice but to accept the reimbursement rates set by pharmacy benefit managers,” Gaffney said.

He concluded that the state has an interest in regulating pharmaceutical industry practices in Vermont and called for “requiring Pharmacy Benefit Managers (PBMs) to receive a license from the Commissioner to operate in Vermont.”

But it is too little, too late for Giamartino. Sitting at her work table with stacks and stacks of pharmaceutical paperwork in front of her, she illustrated the problem.

“OK,” she said, pulling one paper from the stack. “This is one prescription. My cost is $189.12. And this is what the insurance paid me: $15.21. The patient’s co-pay was $10. So I was out $163.91.”

Giamartino did not want to pass the $163.91 on to the patient.

“That’s what Walgreens does,” she said. “It’s not the right thing to do. And I had to get her the drugs. She was dying.”

To get drugs at all, Giamartino was forced to sign contracts that, among other things, require a certain number of prescriptions to be filled every month. If, as a small independent retailer, she could not make the quota, she would be penalized, with money drawn directly from her bank account.

There were other fines as well.

“For example, say somebody has a prescription that they have to pick up every 90 days,” Giamartino said. “If they don’t get it on the 90th day, I get fined. They just take the money out of my checking account.”

These fines have added up to thousands and thousands of lost dollars for the independent pharmacist.

“The pharmacy benefit managers run the insurance claims through and take a cut,” Giamartino said. “It’s been going on for a long time, but it’s gotten a lot worse.”

“Look at all these drugs!” she said, flipping through her stack of paperwork. “Loss, loss, loss, loss, loss, loss. You lose money because they don’t even cover the cost of the drug. It’s so incomprehensible. That’s what people don’t understand. They’ll pay you, but then they take all the money away.”

Jeff Hochberg, the president of the Vermont Retail Druggists Association, told VTDigger, “Pharmacies are not in control of their financials — we don’t control the cost of the medications, nor do we control the reimbursement. Every state in the country is feeling this, rural ones in particular. I think that pharmacy is a great bellwether for true reform of the health care system.”

Brattleboro now has no independent pharmacies, and the chains are consolidating.

In June of 2017, Walgreens bought half the stores in the Rite Aid chain, which at the time operated pharmacies on Canal Street and Putney Road in Brattleboro.

In response to antitrust concerns, the two chains scuttled plans for a merger. The Putney Road pharmacy was sold, but not the Canal Street Rite Aid, located across the street from Walgreens’ Canal Street store.

The only other independent pharmacy in town, Brattleboro Pharmacy on Canal Street, closed last year. The nearest independent pharmacies now are in Townshend and Bellows Falls.

Grace Cottage Hospital owns and runs the Messenger Valley Pharmacy in Townshend, across the street from the hospital’s clinic.

“We have the same problems as Hotel Pharmacy,” said Andrea Seaton, the hospital’s senior director of development, marketing, and community relations. “We keep our pharmacy open as a community service, because this is the only pharmacy in any direction for 20 miles, even though we’re losing money every year.”

A historic loss

Once there really was a hotel connected to the Hotel Pharmacy.

It opened in the Brooks House in 1940, where a restaurant, Tine, now sits. The pharmacy kept its name through further moves, first to the old Elliot Street fire station in 1978 (now the home of Everyone’s Books) and to its final home, across the street in the old Methodist Church in 1992.

The place kept its church-like atmosphere, with a big rose-colored stained glass window facing the street and impossibly high ceilings inside. The floor was lined with shelves of useful and hard-to-find hospital-style supplies as well as the usual cosmetic items found in drug stores today.

Mary and Frank Giamartino met in pharmaceutical school and decided together to live and work in Brattleboro. Frank first worked for the original owners of the pharmacy, and, for a time, Mary Giamartino ran the pharmacy at Brattleboro Memorial Hospital.

Then the two began working together; they bought Hotel Pharmacy in 1982. When they moved to the church building, in March of 1992, they first lived in an apartment in the building’s basement.

The Giamartinos became intimately involved in community activities, especially in high school sports while their sons played. In 2001, one of their sons died at the age of 17. Five years later, in 2006, Frank died in a car crash at the age of 53.

While Giamartino was grieving, an employee, a pharmaceutical technician embezzled upward of $1 million worth of hydrocodone from the business — tens of thousands of pills, according to press reports of his sentencing.

The employee served a one-year-and-one-day sentence in federal prison and remained on probation until he paid the pharmacy $8,500 in restitution — less than 1% of the financial impact to the small business.

“It was horrible,” she said. “And I was advised to declare bankruptcy then. But I didn’t because I felt that the people who I bought the goods from should get paid.”

Giamartino continued running the business, donating to local charities and organizations and remaining a mainstay of downtown.

Over the years, the pharmacy has offered 24-hour-seven-day-a-week emergency service, local delivery, curbside service, and pharmacists so skilled they had the almost-lost ability to compound medication.

Meanwhile, the pharmaceutical business was becoming less and less viable.

At first, Giamartino tried to cut costs by dropping advertising, then donations to community causes, then staff raises and bonuses.

This past year she looked for someone to buy the business. She found no takers.

“I tried to sell it to an independent,” Giamartino said. “I wrote to all 50 states, to independent trade newspapers. Nothing. I went to the National Community Pharmacists Association convention and put it up there. Nobody.”

“The people who buy and sell pharmacies? They’re only selling,” she said.

“My friend in Bennington just sold his three stores a couple of weeks ago for the same reason — he was losing money,” Giamartino said. “He sold to a couple that owns eight other pharmacies. So technically, they’re a chain. But they’re not Walgreens. They kept the store names.”

“I reached out, but they didn’t approach me,” she said.

Still, Giamartino persevered.

“I love what I do,” she said. “I love the family of co-workers here. They are fantastic. I know we were giving people the best health care. And I wanted to sell it to somebody who would keep it independent, so that people who wanted to use our pharmacy could still do it.”

“We enjoy our patients. We like taking care of them and seeing them get better,” Giamartino continued. “We’ve seen grandparents, parents, children, even great grandchildren through the years. And even with people who are dying, we want to make sure that they die the way they want to, in peace.”

Eventually, Giamartino reached a deal with Walgreens, transferred up to 2,000 of her patients’ prescriptions there, and quietly closed down the store. The last day of business was Jan. 17.

The building is on the market, and Giamartino is already fielding job offers. She plans to take a few months to clear her head and then decide what she will do next.

In the meantime, an 83-year history is done and many, many people are sad about it.

To quote Shakespeare (Romeo and Juliet, Act 5, Scene 3): “O true apothecary! Thy drugs are quick. Thus with a kiss I die.”

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