The corner drugstore
Locally owned pharmacies are changing to meet the times.

By Dan Engber

WHEN JOHN GARCIA opened his first pharmacy in Berkeley 25 years ago, it was a general drugstore for retail prescription and over-the-counter merchandise. Today, customized veterinary prescriptions make up more than half of the business at Abbott's Compounding Pharmacy (2320 Woolsey, Berk. 510-548-8777), and he supplies medications for animals in seven counties. By compounding, or producing prescription drugs in-house, Garcia and his staff can design treatments for any kind of animal. They've even treated sick elephants at the San Francisco Zoo – with handmade, 15-inch suppositories made of cocoa butter.

The rest of the business at Abbott's comes from natural hormone replacement therapy and from general compounding. Over the past 15 years the over-the-counter and general prescription parts of the business have dwindled away. Now, as one of only five pharmacies in the Bay Area that specialize in compounding, Abbott's has found a comfortable niche. "If we hadn't changed, we wouldn't be here," Garcia says.

The last decade has seen independent pharmacies throughout the Unites States lose more than 12 percent of the retail prescription market, even as the prescription drug business as a whole has more than tripled. A steadily increasing share of business has gone to big chains like Walgreens and Rite-Aid, as well as to supermarket pharmacies and online vendors, putting neighborhood pharmacies in competition with big businesses on both a local and a national scale.

How can a small pharmacy keep pace with chain stores that subsidize the cost of their pharmacies with the sales of anything from stockings to DVDs, and secure favorable bulk rates from wholesale distributors? According to Deleisa Johnson of the National Community Pharmacists Association, the small stores have developed new strategies to compete: "We're seeing more and more independent pharmacists becoming better businesspeople," she says. "They're getting leaner and meaner, and they're specializing." Some stores work with suppliers who offer "buying group" programs like Value-Rite or Good Neighbor that give independents access to bulk rates and insurance contracts. And the indies' hard work is getting them noticed: a recent survey published by Consumer Reports ranked independent drugstores higher than chains for speed and quality of service, as well as for competitive pricing.

Joe's Pharmacy (5199 Geary, S.F. 415-751-2326) has been a fixture in the Inner Richmond for 20 years, even with a Walgreens just across the street. "Patient care is the only way to compete with them," says owner Tony Bastian, who uses his proficiency in eight languages to communicate with customers. "This is a patient-oriented business, and I know more about my patients than they do [theirs]." Bastian claims superior customer service is what keeps his business viable, but a special focus on drugs for diabetes and male sexual dysfunction might be just as important.

Patients with medical conditions that require special sensitivity or expertise are more likely to value a small pharmacy with a staff they trust. Maria Lopez, the pharmacy director at Rx Unlimited (901 Castro, S.F. 415-695-0175) in Noe Valley, sees herself as both a pharmacist and an advocate for patients with HIV and other chronic illnesses, like lupus and multiple sclerosis. Located two blocks from a Walgreens in one direction and four blocks from a Walgreens in the other, Rx Unlimited survives by offering individualized service. One of the patients told me why he had stopped getting his HIV medication at a chain store: "My doctor sent me to the pharmacy to pick up some drugs, but my yearly paperwork hadn't gone through. The girl there just said to me, 'You've been terminated.' I wanted to say, 'Do you realize you're talking to an HIV-positive patient?' " Now that he's a patient at Rx Unlimited, he gets phone calls once a week to make sure he's OK and to arrange delivery of his prescriptions if he can't make it to the store.

Across the bay, the Elephant Pharmacy (1607 Shattuck, Berk. 510-549-9200) takes a very different approach to challenging the big chains. "Small stores don't work anymore," CEO Stuart Skorman says as he leads me through Elephant's movie rental section and past the one-hour photo lab. "Prescriptions are a losing or break-even business. By selling all this natural stuff, we finally have a good financial model." He widely gestures at the aisles of organic produce, vegan cosmetics, and San Francisco tourist memorabilia. Skorman opened the 13,000-square-foot store a year ago, with the goal of creating an alternative version of Walgreens for educated baby boomers, "the same way Whole Foods is an alternative to Safeway," he says.

One of the technicians at the prescription counter told me that she's worked in independent drugstores for years and that she considers Elephant to be as good as a mom-and-pop pharmacy, "a big store with small store service." Skorman says the Elephant chain won't compete with the real mom-and-pop stores: "Those guys aren't opening new stores, and we're not going into neighborhoods with the ones that already exist. We're named Elephant Pharmacy because we're large but intelligent. We're gentle like an elephant." Skorman excuses himself for a moment to help a customer. I follow them over to the face soaps, past the massage oil section with its tubs of cocoa butter. "We have a radically new concept for dealing with customers," Skorman says later on. "We listen!"

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