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The Last Independently-Owned Drugstore: After almost half a century in business, the Tahoe City Pharmacy closed its doors June 11. It was the only independent pharmacy in Truckee and on the North Shore. |
CommentsTahoe City Pharmacy Closing After Almost Half a Century
By Melissa SiigPublished: June 22, 2010
After almost 50 years in business, the Tahoe City Pharmacy closed its doors this month. The loss of the pharmacy, the only independently-owned drugstore in the Truckee/North Tahoe area, leaves customers with only corporate pharmacies to choose from and, some residents worry, the continued erosion of small-town identity.
The Tahoe City Pharmacy opened in 1961. Pharmacist Gary Sabistina bought the business in 1997, making him the third owner. The pharmacy would have celebrated its 50th anniversary next year, but due to financial and personal reasons, this winter Sabistina decided to close the business.
Over the years, the amount of money pharmacists are reimbursed from health insurance companies for prescription drugs has steadily declined. On many prescription drugs, Sabistina said he was making a profit margin of anywhere from $7 to a few cents. On some drugs, he even took a loss.
“Insurance has been killing us,” he said, noting that he received contracts from insurance companies for reimbursements that would give him 3 percent less than his cost. “As an independent pharmacist, I can’t afford that big of a loss — I have to make money to pay the bills. Every business has overhead. Nowadays, prescriptions just don’t make money.”
Sabistina’s business also took a hit when a CVS Pharmacy opened across the street in 2005.
“When CVS moved in, it slowly eroded my business,” Sabistina said. “Before, I was the only guy in town.”
Ironically, Sabistina is transferring many of his patients’ prescriptions to CVS, now the only pharmacy in Tahoe City. There are four drugstores in Truckee and two in Kings Beach; all are corporate chains or part of Tahoe Forest Hospital. According to Sabistina, there are only two remaining independent pharmacies in the Tahoe Basin — one in South Lake Tahoe and another in Incline Village.
Sabistina believes that small pharmacies, similar to independent bookstores, are being squeezed out by retail chains. People like the name recognition of corporate pharmacies like CVS and Rite-Aid, which also take most insurance plans. Sabistina said that it was impossible for an independent pharmacist like him — who also served as his own bookkeeper, accountant, merchandiser, and janitor — to negotiate contracts with over 3,000 health insurance plans.
“Small pharmacies are being pushed out,” he said. “Unless you have a specialty niche or are in a community without a big chain, we’re all going to be dinosaurs.”
Sabistina was also hurt by the recession. Before the economic downturn, over-the-counter medication and gift merchandise, which has a higher profit margin than prescription drugs, made up 70 percent of his business. Now, he says, they only account for 10 percent. His business, which once did $1.5 million in sales, was set to generate about $500,000 this year.
“We haven’t been making much money,” he said. “It came to the point where we had to close.”
Sabistina had originally wanted to close in January, but when he couldn’t reach his landlord to get out of his lease, he decided to stay open. Then, in February, tragedy struck when his 19-year-old son, Michael, who had worked in the pharmacy for the past year, died unexpectedly. Sabistina informed his landlord he would be leaving no matter what, and just recently received a letter releasing him from his lease.
Longtime Tahoe City Pharmacy customers like Ed Miller are sad to see the business go. Miller liked the personal service he received from Sabistina, which he says he doesn’t get at chain drugstores.
“I feel like when you lose a locally-owned business and it gets replaced by a corporate entity, you lose some of the flavor of a small town and the community,” Miller said. “Corporate chains just don’t have the latitude to do the kind of things we got used to at the Tahoe City Pharmacy.”
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