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ANSR Pharmacy closes due to tightening insurance and low sales margins

Economic factors force closure of ANSR Pharmacies in Hollister and Watsonville, which will remain open while some inventory is sold off
The pharmacy is already closed and all remaining inventory will be sold at 50 percent off.
ANSR customers' records are already at Walgreens, but they can transfer them to other pharmacies if they choose

ANSR Pharmacy at 581 McCray St. is closing its doors after 13 years of serving Hollister, primarily because of diminishing sales margins caused by insurance companies, says owner, Ali Nowbar. A second store is also closing in Watsonville.

“They’re squeezing every possible dollar and showing record profits while everybody else is going out of business,” he said of insurance companies. “It was happening before Obamacare and with Obamacare it just got worse because we had more people on insurance.”

Nowbar said that over the years, margins have dropped from 40 percent to 15 percent or less. Years ago, insurance payments made up about only 20 percent of the business, while people either paid for their medications themselves or billed their insurance companies.

“Then they started contracting with chains, then PBMs (Pharmacy Benefits Managers) started showing up and they contracted with the pharmacies at a certain price,” he said. “You were guaranteed to get those patients, but as more and more people accepted it, they got tougher on the contracts to the point where local pharmacies don’t take Anthem Medical because they don’t make any money.”

Nowbar said he lost money for every prescription through Anthem Medical. On generic medications, he said he cleared from 2 cents to 21 cents.

“You can’t survive on that,” he said. “My vials cost more than that. There are a lot of hidden charges in pharmacies people don’t know about.”

Customers who buy their medications at ANSR can go to Walgreens, which purchased their prescription records. Nowbar said, however,  that his customers can transfer their records to any pharmacy. As of Aug. 28, phone calls were already being forwarded to Walgreens.

ANSR was the only pharmacy in Hollister that would compound certain medications that cannot be purchased from U.S. pharmaceutical companies. Because they are custom mixed at the pharmacy, compounds can be much more expensive than other mass-marketed prescriptions. Nowbar said A&O Pharmacy in Salinas is the only one he is aware of that still does compounds.

“Compounding is being regulated a lot more than it used to be and a lot of insurance companies are not covering those medications,” he said. “People balk at paying high prices for the compounds.”

Nowbar said he picked Walgreens because he thought they were the best choice of the more than 10 pharmacies in town. He said the store itself will remain open as he sells off the remaining inventory of over-the-counter medications, medical supplies, greeting cards and other items at half price. He expects to close for good sometime next week. He said there were 16 employees at the Hollister location and all of them are already interviewing at Walgreens.

“I’m recommending every one of them very highly,” he said. “They’re all good people and I love every one of them. They’re like my brothers and sisters. It was a very hard decision to sell.”

The decision to sell was made in July, but Nowbar wasn’t able to tell anyone because he was in negotiations with Walgreens. He said he had talked to other pharmacies in town, but once he decided to go with Walgreens and signed the contract, he wasn’t able to talk about it until just recently. He lives in Gilroy and has worked in Hollister for 15 years. He said once he’s closed ANSR he doesn’t know what he will do.

“I’ve been a pharmacist for 31 years,” he said. “I have offers to go work for people, but I don’t know if I want to be a pharmacist any more. I’m 55 and too young to retire. I’m going to take a few days off and figure things out.”

Walgreens did not respond to questions before press time.

About:
John Chadwell (John Chadwell)

Former U.S. Navy Combat Photojournalist. Award-winning writer for magazine, newspapers, radio and television. BA in Journalism and Mass Communications from Chapman University. Graduate studies at USC Cinema School. Also, author of eight novels, copywriter and scriptwriter.

Comments

A few years ago I needed a custom compound for a very ill animal and this was the only place I could have it made in short order.  With the aid of that special medication we were able to save the animal, but if this happened again I guess we would be out of luck.  I can only imagine how I would feel if the patient were a human being instead of a pet.  Too bad this local asset is gone..

That said, blaming insurance companies is short-sighted.  I'm entitled to drug coverage through my military retirement, but if I do not use the government contracted mail order supplier (there is only one  nationwide), I have to pay a hefty extra charge.  For a period of time, Walgreens would not even act as backup in the next higher payment tier, because Tricare's reimbursement rate was so low. So go somewhere else or pay the uninsured rate (ever seen those?)  As you may or may not know, Medicare is legally barred from negotiating prices directly with pharmaceutical companies. 

There is no "insurance company" involved in my case, the military retirement healthcare system is, essentially, self-insured, but they are doing exactly the same thing as the insurers AND other self-insured entities.  They are looking for the low cost solution, who isn't?   So blaming the insurance companies is not accurate, they have become the whipping boy for the high cost of healthcare because we gave them the nasty job of holding the costs down.

Marty Richman  

Submitted by (Annalisa Austin) on

I love this man, Ali Nowbar. He is very well educated and a great conversationalist. And a seemingly very decent human being with a very decent character. I will really miss him and this place. They had a very decent selection of useful products. He is a lost asset to the community. I wish him and his staff all the best and wish he would stay in the area in some capacity. Sincerely, Annalisa Austin

Submitted by Bob Easterday (mscientist) on

I hate to see a small business like this go down. That said, do we really need 10+ pharmacies in a town this size?

I remember back when Denny's lost out to Walgreens when they were bidding for business here, because clearly having yet another big-chain pharmacy in town was more important.

At the time I believe the cited reasoning was that Walgreens would provide more jobs. Tell that to the former employees of ANSR.

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