Federation of Connecticut Taxpayer Organizations

SOMERS � David Guerette and his wife, Kari Ann, are counting the customers who�ve stopped getting prescriptions filled at the couple�s Somers Pharmacy because of a change in state policy.

The customers started leaving in October, when the new rules took effect. Through mid-December, the list totaled 122 customers. They�ll continue for about another month, Guerette suspects.

�I don�t really known when we�re going to stop bleeding here,� he says.

The change is part of the labor concession agreement for state employees that took effect in October. It mandates that all state employees and retirees under 65 use a mail-order program for �maintenance� drugs, such as those for diabetes, asthma, and high blood pressure. The change is expected to save the state $20 million yearly.

The patients can pick up the drugs at a CVS or any other pharmacy that can match CVS�s rates, or else get them delivered at their doorstep. CVS holds the contract to distribute drugs under the state�s insurance plan.

Somers Pharmacy is an example of how the new rules are affecting the bottom lines of smaller, independent drugstores across the state. The Guerettes bought the business outright last year. David runs the store�s general operations, while Kari Ann is the pharmacist. They have 11 employees, including themselves.

And because they can�t match the CVS rates, they�ve had to tell longtime customers who are covered by the state�s insurance to go elsewhere.

Pharmacists and their lobbying groups have been railing against the deal since the spring, when they learned it was part of the concession agreement. At first, the mail-order program was limited to CVS Caremark, which holds the contract with the state to deliver prescription drugs. Pharmacists claimed a small victory when they were allowed in � as long as they agreed to a contract with CVS Caremark.

But that quickly turned sour, when many realized they�d lose money on the deal.

The issue came up during a legislative hearing in November, when lawmakers from both parties urged Gov. Dannel P. Malloy�s budget director, Benjamin Barnes, to find a way to help the independent pharmacies.

However, Barnes has said the change saves the state money. He cautioned lawmakers against using state money or policies to prop up one industry, although he said he�d look into it.

Guerette keeps his report on every state employee and retiree who has left in a folder labeled �transfers out due to state employee insurance.� Its cover is decorated with a frowning face, red tears dripping from its eyes.

On some of the files, he�s kept track of where they�re going � most are to one of the CVS outlets in Enfield or the Big Y in Ellington, he says.

Part of the Guerettes� concern is that when a state employee takes his business elsewhere, their store also loses the business of the other family members on his insurance plan. And they�re also not there to buy greeting cards, toys, or over-the-counter drugs.

David Guerette estimates between 10 and 15 percent of his business comes from state employees and retirees, many of them employed at the state�s prisons in Enfield and Somers.

And less business means less profit, and less money to give back to the community, Guerette says.

�We�re not going out of business, but Somers Pharmacy probably is not going to be able to support the community as it has in the past,� he says. The pharmacy has sponsored local youth sports teams, the Lions Club, as well as the Boy Scouts and Girl Scouts.

Guerette himself played for a Somers Pharmacy-sponsored Little League team while growing up.

The problem, he says, is that the independent pharmacies just can�t compete. CVS buys its pills directly from the manufacturers. Independent pharmacies work through wholesalers, and have less buying power, he adds.

Guerette looked at the CVS Caremark rates. He�s hesitant to talk because a condition of seeing those figures was signing a nondisclosure agreement.

�We decided that obviously we weren�t in the business to lose money,� he says. �You�re almost better off letting the customers go.�

The state keeps a list of the pharmacies that are on the plan. Other than CVS, many are connected to regional supermarket chains and national big-box stores. Only a handful of independents, among them Hebron Pharmacy, have signed on with CVS.

But the independent pharmacies have started making their case.

Somers Pharmacy is part of the Northeast Pharmacy Service Corp., a trade group for independent pharmacies that�s started lobbying the issue. The group has hired a lawyer to work on the issue during the upcoming legislative session, according to Guerette, who keeps the talking points it�s provided on hand.

The group is pushing the state to look more at savings tied to major drugs being available in generic form. The group estimates about $30 million in savings can be achieved that way in 2012 and as much as $50 million in 2013. A generic version of Lipitor, an expensive cholesterol-lowering drug, is one of them.

State officials, meanwhile, predict $1.5 million in savings in 2012 and $12 million in 2013 from drugs going generic.

The Guerettes also have a poster on the wall next to the prescription pickup counter explaining the change, asking customers to call their legislators and Malloy.

They�re also making their case from a public health perspective, pointing to studies that found forcing patients away from their pharmacy of choice and forcing them to use mail-order services makes those patients less likely to take their medicine as directed.

Kari Ann Guerette says she�s concerned about interactions between medicines.

Most customers who have switched to a CVS or mail-delivery drugs are still going to Somers Pharmacy for their regular prescriptions, such as antibiotics, she says.

The computer programs provided by insurance companies show what other drugs a patient is on, she says. But there are delays in the system, and the effects of a drug sometimes last longer than the prescription. It�s unsafe for people to be getting different drugs from different pharmacies, she says.

As for the state employees who had to stop getting prescriptions filled at Somers Pharmacy, Kari Ann Guerette says some are returning to her with complaints.

�They�re mad; they�re angry,� she says. �The customers themselves, they�re really not happy using mail-order.�