DOVER — It wasn’t an increasingly violent area across West Loockerman Street from Bayard Pharmacy that made owner Erik Mabus decide to close the store for good at the end of the business day on Friday at 3 p.m.
It was a business model that just didn’t add up.
In fact, Mr. Mabus said he has rarely had any problems from the local community since he opened up the pharmacy at 202 W. Loockerman Street eight-and-a-half years ago.
“Everybody when I came down here told me you’re absolutely nuts going to downtown Dover to open a pharmacy; you’re going to get robbed every other week,” said Mr. Mabus, who owns the independent Bayard Pharmacy with his wife Jenny. “I’ve loved it down here. The people have been fantastic. The community embraced us right from the start. I just haven’t had an issue — no more than I’ve had at any other location.”
“I’ve had some of the nicest people that I’ve worked with down here. It’s a shame because it is an underserved population. When we go, now everybody’s going to have to go probably at least a mile or two miles away to pick up their prescriptions.”
Diane Laird, executive director of the Downtown Dover Partnership, said the pharmacy will definitely be missed in downtown Dover.
“Erik has been such a positive force in the Dover community and has been an ideal ‘local pharmacist,’ always friendly and accessible to the community,” Ms. Laird said. “He has endured in a very challenging role, considering competition continues to increase with retail pharmacy chains, grocery and big box pharmacies around the region, and mail order drug fulfillment.
“He will surely be missed on Loockerman Street.”
Numbers not adding up
Mr. Mabus said Prescription Benefit Managers (PBMs) have wreaked havoc on the business model, particularly for independent pharmacies.
“It’s just not financially a viable business anymore,” he said. “Pharmacy is a really odd business in general. It’s really controlled by what they call the PBMs (Prescription Benefit Managers).
“They are kind of the intermediate guy. We have a prescription for, say, the state of Delaware insurance. I don’t bill the state of Delaware, I bill whoever processes it for them, they pay me and then they bill the state of Delaware.”
He said the PBMs have gotten extremely aggressive at lowering prices.
“The last I checked when I ran my numbers, I lose money on the cost of my drugs about 25% of the time,” said Mr. Mabus. “So, if I pay $10, I’m getting reimbursed $8, if I pay $100, I’m getting reimbursed $90.
“What other business are you expected to lose money? And that’s before any of your overhead. For an independent like me to make money and be a profitable, long-running business, you need to make about $12 a prescription. So, if I lost 50 cents, I really lost $12.50, because I didn’t cover any of my overhead.”
That, combined with doing business throughout the COVID-19 pandemic, has really taken a toll on Bayard Pharmacy’s income.
“For us, it took us a little while to get going, so we did build up a little debt and that hurt,” Mr. Mabus said. “And then we got enough business to really cover that, but then the reimbursements started shrinking, and we didn’t have enough to cover that, and then COVID hit, and we lost some business … so it’s just multiple things.”
He said the biggest thing that led to Bayard Pharmacy’s closure has been the PBMs and a DIR fee (Direct and Indirect Remuneration) that they put on the back end of their billing, which he said varied in pricing and was never clearly explained as to where the fees were directed to.
“They evaluate you based on their performance metrics and stuff, but I can’t control if Mrs. Smith lives down the street and she has no money this week and her prescription’s due and it’s a three-dollar co-pay, she won’t come get it,” Mr. Mabus said. “My customer base is a pretty low-income customer base. When it comes to a prescription or food, they’re taking the food.
“I can do all the right things. I can call them and say, ‘Hey, your prescription is ready,’ but if they don’t come get it, they don’t come get it. The pharmacies that aren’t filling prescriptions get penalized, basically.”
What the future holds
Mr. Mabus said he has interviewed with a couple of the bigger chain pharmacies in search of future employment and is confident he will land on his feet.
“We’ve been open in downtown Dover for eight-and-a-half years. It was a nice run,” he said. “The community was not an issue. We had enough business. We just weren’t getting reimbursed enough (by the PBMs).”
He knows there will be a lot of emotions stirring inside him when he locks the doors to his pharmacy for the final time on Friday.
“Everybody I’ve talked to has been a little upset and a little sad,” said Mr. Mabus. “They want to know where I’m going to be, they want to see if they can follow me somewhere. Unfortunately, I don’t know where I’m going to be yet.
“It’s going to hurt a lot, probably be a little sad, a little nostalgic thinking back through the time here — but a lot of pride, too. We made a lot of really good relationships here and did a lot of good things.
“I got to live my dream. This is what I wanted to do, it just didn’t work — not as well as I wanted it to, at least.”