No-in­sur­ance phar­macy a pre­scrip­tion for suc­cess

Austin’s 10-year-old MedSavers keeps drug prices down with low over­head and the per­sonal touch.

Austin American-Statesman - - FRONT PAGE - By MaryAnn Roser [email protected]­man.com

An experiment birthed 10 years ago when Austin phar­ma­cist Chris John­son founded an in­die drug­store to sell dis­counted medicines to needy Cen­tral Tex­ans was more than a crazy idea. It was a crazy idea that had legs.

MedSavers Phar­macy — a rare drug­store that doesn’t take in­sur­ance — is still dis­pens­ing lower-cost generic drugs, still grow­ing and still fun, said John­son, 44.

It’s a busi­ness, he told the States­man a year af­ter it was launched, that inspired him to take a dras­tic pay cut so he could of­fer cheaper op­tions to brand-name drugs, forge deeper con­nec­tions with his cus­tomers and spend more time with his wife and two chil­dren. It was a per­sonal state­ment against ob­scenely high drug costs, he said.

“Peo­ple told me to my face I was crazy, but I just signed another five-year lease,” John­son said, look­ing like some­one who’s hav­ing the last laugh. “When you see the pric­ing in the mar­ket­place and see that I’m still mak­ing a profit, you see the true trav­esty of what is go­ing on.”

In be­tween greet­ing cus­tomers and an­swer­ing ques­tions from his phar­macy tech­ni­cians on a re­cent morn­ing,

John­son said he’s man­aged to stay in this un­usual busi­ness be­cause he doesn’t have the high over­head costs tak­ing in­sur­ance would re­quire. He even moved to a larger lo­ca­tion five years ago, from a tiny space on Med­i­cal Park­way to 1800 W. 35th St., next to Things Celtic.

He supplied a list of 35 drugs that cost less at MedSavers than at three na­tional chain stores. In some cases, MedSavers price was half of the next low­est price. In six in­stances, MedSavers was at least five times cheaper.

That’s a big deal to cus­tomers pay­ing out of pocket.

John­son said about 80 per­cent of his es­ti­mated 4,000 cus­tomers lack in­sur­ance, down from about 95 per­cent when he opened in 2005. The re­main­ing 20 per­cent can try to use their in­sur­ance, but they’ll have to sub­mit the bills them­selves.

“When 80 per­cent of your phone time is taken up by in­sur­ance, it takes staff to do that,” said John­son, a 1995 Univer­sity of Texas grad­u­ate.

A decade ago, MedSavers had one phar­macy tech­ni­cian and one part-time phar­ma­cist. To­day, it has seven tech­ni­cians — three of whom are full-time — and three part-time phar­ma­cists. John­son says his salary is com­pa­ra­ble to what his peers make in Austin, where me­dian pay was $115,631 last year, ac­cord­ing to the Texas Work­force Com­mis­sion. It took him about 3½ years to earn an an­nual salary com­pa­ra­ble to what he made be­fore MedSavers, he said.

Ex­perts es­ti­mated 10 years ago there were fewer than a dozen phar­ma­cies na­tion­ally that shunned in­sur­ance. To­day, that num­ber re­mains small, said Kevin Sch­weers, se­nior vice pres­i­dent for pub- lic af­fairs at the Na­tional Com­mu­nity Phar­ma­cists As­so­ci­a­tion.

“It does seem to be rel­a­tively rare,” Sch­weers said.

Nei­ther his or­ga­ni­za­tion nor the Amer­i­can Phar­ma­cists As­so­ci­a­tion had data on the num­ber of such phar­ma­cies.

Sch­weers voiced a con­cern about cus­tomers who get medic ations from more than one loc ation and for­get to tell the phar­ma­cist, say­ing that while pa­tient safety can be an is­sue, he did not want to give an opin­ion on MedSavers.

In shop­ping around, con­sumers “shouldn’t for­get there are a lot of com­mu­nity phar­ma­cies out there that of­fer heavy dis­counts on drugs,” he said.

Nei­ther Sch­weers nor John­son knew of any sim­i­lar phar­ma­cies in Texas.

For his part, John­son said his ap­proach gives him time to talk to cus­tomers, get a full history and speak with their doc­tors, some of whom call him for ad­vice on med­i­ca­tions, he said. About 50 of his cus­tomers are physi­cians, he added.

Although the high pre­scrip­tion drug costs have been an is­sue na­tion­ally and online dis­count phar­ma­cies have sprung up, sev­eral changes in the health care arena could ex­plain why there are few dis­count and non­in­sur­ance phar­ma­cies. Those changes in­clude the in­tro­duc­tion of Medi­care drug cov­er­age in 2006 and the Af­ford­able Care Act, also known as Oba­macare, which has cov­ered mil- lions of pre­vi­ously unin­sured Amer­i­cans.

Brid­gette Bei­necke, 63, of Austin saw her in­sur­ance can­celed when her hus­band died about a decade ago. She be­came an early cus­tomer when a nurse told her about MedSavers.

“I didn’t know how I was go­ing to af­ford my meds,” she said. “This was serendip­i­tous.”

Although she has cov­er­age now, she still uses MedSavers be­cause her de­ductible is high. “I just come here and I know I’m get­ting the best value,” she said.

She also likes that John­son knows her.

He es­ti­mated that he knows be­tween 40 per­cent and 50 per­cent of his cus­tomers by name.

Another fa­mil­iar face, Echo Beyer, said she found MedSavers about nine years ago when she moved back to Austin from Kansas City and sud­denly had health prob­lems. “It was very com­fort­ing to come here,” she said.

In­ter­act­ing with the cus­tomers is a joy, MedSavers in­tern Sarah Hal­low­ell, 24, said.

“I feel in­cred­i­bly lucky, and I get to learn from Chris,” said Hal­low­ell, a UT phar­macy stu­dent. “We know that for ev­ery pre­scrip­tion we fill , they might not have got­ten it oth­er­wise.”

John­son said MedSavers has the ca­pac­ity to serve many more peo­ple, but spread­ing the word has been “the hard­est part” for a busi­ness that lacks an advertising bud­get. He started a mail-or­der op­tion three or four years ago and has plans to be­gin com­pound­ing — mix­ing med­i­ca­tions to meet an in­di­vid­ual pa­tient’s needs — to di­ver­sify the busi­ness.

Asked if MedSavers will be around 10 years from now, John­son didn’t hes­i­tate. “Ab­so­lutely,” he said.

SHELBY TAUBER / AMER­I­CAN-STATES­MAN

Pharmacist Chris John­son fills a pre­scrip­tion at MedSavers, a drug­store he founded 10 years ago. MedSavers of­fers dis­counted, no-in­surance pre­scrip­tion drugs to cus­tomers and has ex­panded its con­sumer base out­side the Austin area.

PHO­TOS BY SHELBY TAUBER / AMER­I­CAN-STATES­MAN

MedSavers owner Chris John­son keeps his costs down by not ac­cept­ing in­surance. “When 80 per­cent of your phone time is taken up by in­surance, it takes staffff to do that,”said John­son, a 1995 Univer­sity of Texas grad­u­ate.

John­son says 35 drugs cost less at MedSavers than at three na­tional chain stores. In some cases, MedSavers’ price was half of the next low­est price.

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