From the Journal Star:
After 50 years, Tingleff Pharmacy will close permanently at 1 p.m. Saturday.
The pharmacy at 3617 W. Harman Highway lost 60 percent to 65 percent of its customers after Caterpillar Inc. instituted a new prescription drug plan in January. The plan designated specific national pharmacies instead of allowing employees to choose their own pharmacy, said owner and pharmacist Rick Tingleff, the son of founder Dick Tingleff.
“Caterpillar was the catalyst when they pulled benefits from the independents and gave WalMart and Walgreen’s the business,” he said.
Hometown Pharmacy, with offices in Creve Coeur, Morton and Chillicothe, was another local pharmacy that cited the Caterpillar change as a reason for closing earlier this year, Tingleff said.
In a somewhat related story, the Winston-Salem (North Carolina) Journal recently reported that, despite that city, county, and state giving Cat a combined incentive package worth just under $75 million to locate a manufacturing plant there, Cat didn’t allow any local general contractors to bid on the construction of the plant. A local TV personality there also criticized the deal because of Cat’s prescription drug policy:
…CAT isn’t opening its doors freely to local stores and vendors. For example, Caterpillar has an exclusive contract with Walgreens and Walmart to fill employee prescriptions. That leaves other chains like Target and Rite Aid out in the cold, and excludes local mom-and-pop drug stores from doing business.
The author, Jim Longworth, also criticized economic incentives in general as “nothing but corporate welfare, legalized extortion.” I found this paragraph particularly interesting:
And so, for now, at least 40 states are entrenched in the incentives game where they feel obligated to offer perks, lest they lose to a competing state. But according to UNCG professor Andrew Brod, that fear isn’t justified. “It’s hard to conclude that a company that is getting incentives from State X, wouldn’t have gone to State X anyway.” So why offer incentives? Brod theorizes, “Offering incentives to lure large companies gives politicians the chance to claim credit with little risk they’ll be blamed for a deal that falls short of its promise. It’s very important for them especially in times like these, to appear to be doing something. It’s easier to do something whose rewards and benefits are hard to assess, than to just do nothing.” [emphasis added]
How many times have we heard in Peoria that “something is better than nothing”? The question that should be asked when that statement is made is, “better for whom?” The answer according to Dr. Brod is “politicians.”
Nothing that has to do with Caterpillar is bad for Peoria…
If those local pharmacies would charge like prices for the same prescription, then they should be allowed to continue in the program.
However, we all know that the little guys charge way more, which is one reason why medical premiums have increased so dramatically.
Little guys have to charge more because they can’t buy in the bulk amount that the larger chain stores can. Simple economics. But they do give excellent service and we can never replace the charm of the local corner drugstore.
Dunlap Observer/SD – I would beg to differ. Small pharmacies don’t, as a rule, charge way more than their larger competitors. I wrote about this a while back (http://inmymind.blogpeoria.com/2009/10/12/caterpillar-presecription-plan-a-comprimise-in-the-eyes-of-a-former-pharmacy-tech/), so I won’t rehash all of that here, but the large pharmacies will often charge significantly more.
The thing you have to remember is that most people have insurance or governmental coverage – so the big pharmacies don’t have to compete on cost. The small pharmacy – especially those not covered by a major plan will have to compete on cost because it is cash prescription buyers that compare costs.
As far as the buying in bulk – independent pharmacies buy from a wholesaler that buys in bulk – so they don’t lose all of the scale advantage. The place that really does the lower cost bit well is Wal-mart, they’ll sell something to the customer for less than another pharmacy can buy. All that said – independent pharmacies end up with smaller margins because they have slightly higher costs – and often a lower selling price.
Caterpillar Student Trainee Program has been reinstated for the 2011-2012 school year…see Dunlap High School’s website for up-to-date information. (Caterpillar: application packets will be sent to all Peoria area high schools.) Still waiting to get this news from D150. Oh well…thanks Dunlap!
TR64 – Thank you for this tip. I have a student that is really interested in pursuing this opportunity and I was wondering if they were going to bring it back.
CAT employees are not prevented from using any pharmacy they want. CAT has negotiated special pricing with Walmart and Walgreens, but the choice is still left to the employee.
Yeah.. if they don’t mind paying the entire cost themselves…