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At the end of the day on Friday, customers of Cottrell’s Hometown Pharmacy in East Brewton will have to find somewhere else to get prescriptions filled.
Cottrell’s closing is just one more store being added to a growing list of independent pharmacies across the state facing economic struggles.
Danny Cottrell, owner of the East Brewton pharmacy and the Brewton Medical Center Pharmacy, said the closing of the store in East Brewton is a result of the loss of revenue — thanks to the current Pharmacy Benefit Managers, or PBMs, that are at the center of the crisis for independent pharmacies.
“As you have probably seen, Walgreens and CVS are closing stores and independent pharmacies are also closing at record rates,” Cottrell said. “The market has changed drastically due to the power bestowed upon Pharmacy Benefit Managers and insurance companies.”
Cottrell said the East Brewton closing is far from being the only store impacted by the PBM issue.
“Typically, it’s been about one a day nationally,” Cottrell said. “It’s not just us. Walgreen’s basically sold out with 2,000 stores closed. CVS has closed about 1,000 stores and RiteAid has gone bankrupt.”
Cottrell said the closings are the direct result of the PBM grip on pharmaceutical products.
“All of this is directly because of the PBM stuff going on around the country,” Cottrell said. “We had sustained a manageable loss for a while. But, over the last year with the changes in the way business is done due to PBMs, it’s just almost impossible for a small pharmacy to be able to survive.”
Cottrell said one of the issues that has targeted many independent pharmacies is the control by PBMs and insurance companies.
“The problem is you have three main ones that control over 80 percent of the market,” Cottrell said. “There are three wholesalers who do 90 percent of the selling (of pharmaceuticals); three insurers who pay 80 percent of the claims and three PBMs who control 80 percent of the negotiations.”
Cottrell also said that the whole issue with dispensing fees, drug costs and reimbursement decreases are the main reasons for the East Brewton closure, more and more independent pharmacies may experience the same fate.
“There is no transparency in the way they do business,” Cottrell said. “Even the company paying for the prescriptions can’t see their own information. Everything has become a take or leave it situation. They have such a large portion of the business, you almost can’t afford to walk away from doing business with them.”
There are many issues rolled into the current situation, Cottrell said.
“One of the other issues caused by PBMs is increasing the price of drugs by forcing drug companies to pay larger and larger rebates to be on their formularies. Many times the doctor does not decide what you get to take, the PBM does. And, there is not a lot of transparence in who gets the rebates.”
Cottrell explained a plan that worked back in 2005 and said a similar plan now would alleviate some of the stress and losses currently being seen across the country by pharmacies of all sizes.
“In 2005, Alabama went to an average acquisition cost and an average dispensing fee for Medicaid,” Cottrell said. “It was a plan that was fair to the pharmacies and to Medicaid. It worked out for everyone. The plan basically rebalanced who got the money and it’s what needs to be done again.”
PBMs have been significant players in the health care system for a long time. They are focused on managing prescription drug benefits for insurance companies, health plans, and Medicare Part D plans. Their primary goal is to negotiate drug prices with manufacturers, manage formularies, and reimburse pharmacies for the medications they dispense to patients. Although these negotiations often help insurers and consumers by keeping prescription drug prices down, they have unintentionally created serious challenges for independent pharmacies. In an increasingly competitive and complex health care landscape, independent pharmacies are particularly vulnerable to the ripple effects of PBM price negotiations.
PBMs often create “preferred pharmacy networks,” limiting where patients can fill their prescriptions. Independent pharmacies may struggle to gain access to these networks, as they can’t always afford to offer the deep discounts that larger chain or PBM-owned pharmacies can provide. As a result, patients are often steered toward these big chains, reducing the patient base of independent pharmacies.
When many families have filled their prescriptions at a community pharmacy for years, they can be told by their insurance company that they are being required to go to a corporate chain for their medicine needs instead of their local pharmacy. That brings about a loss of loyal customers — a devastating impact on a small business.
PBMs have served as the middlemen between drug stores and insurance companies and many lawmakers are working to consider legislation that would bring PBM reform in Alabama. But, that action is too late for many pharmacies across the state — including Cottrell’s.
Cottrell said customers at the East Brewton store will have options when moving forward with their prescription needs.
“We will be transferring all files to the Medical Center Pharmacy and will take care of those prescriptions there,” Cottrell said. “If a customer wants to choose another pharmacy, they can call us and we can have the file transferred to their new pharmacy.”
Cottrell provided a copy of the letter that has been given to the staff of the East Brewton pharmacy as well as customers who use the store.
“In January of 2019, my family had the opportunity to open Cottrell’s Hometown Pharmacy. We knew that opening a store would pose a risk but we felt like East Brewton needed a pharmacy. Shannon Thompson and her staff have been wonderful; making a tremendous impact caring for the entire county while administering thousands of Covid shots.
“As you have probably seen, Walgreens and CVS are closing stores and independent pharmacies are also closing at record rates. The market has changed drastically due to the power bestowed upon Pharmacy Benefit Managers and insurance companies. Due to these marketplace changes, we have made the difficult decision to close Cottrell’s Hometown Pharmacy. Our last day of business will be this Friday, March 21, 2025. All pharmacy records will be moved to Medical Center Pharmacy at 1121 Belleville Avenue (251-867-5454). Shannon, Melinda and Jody will continue to be available to serve you as they will also be moving to Medical Center Pharmacy. While we do not have a drive-thru, we are more than happy to accommodate anyone who might have difficulties getting out of their vehicle.
“We also offer free delivery in Brewton AND East Brewton and we’re open 7 days a week for your convenience. If you have any questions, please call me at 251-802-0387.
I am so sorry that we could not continue to serve you in a physical location like East Brewton. It is a crazy pharmacy market that has to change or you cannot even imagine the closures coming.
“Thank you, Shannon and staff, for serving the community and thanks to all of you for your support these past 6 years.”
Shannon Thompson has served as pharmacist for the East Brewton business since its opening in 2019. Having been a pharmacist at various other stores during her career, she said the closing of Cottrell’s has caused her some sadness for the community.
“It absolutely breaks my heart,” Thompson said “We’re in our seventh year here and have loved serving this community for all those years.”
Thompson said she will transition to a pharmacist position at Brewton Medical Center Pharmacy after the East Brewton store closes on Friday.
“We hope to continue to serve our patients at the Medical Center Pharmacy,” Thompson said. “Me and all of my crew will be there to serve the patients who follow us there. It won’t be all new faces for those patients since we will be there to continue serving them.”
Thompson had previously provided vaccinations and immunizations at the East Brewton pharmacy, and said she will continue that service in her new position.
“I’ll still be doing all the shots (at Medical Center Pharmacy) that I’ve done at Cottrell’s,” Thompson said. “We appreciate our patients and will look forward to continuing to serve their needs.”
The Medical Center Pharmacy is located adjacent to the D.W. McMillan Medical Center off Belleville Avenue in Brewton.