Healthcare giant CVS is buying 20-store pharmacy chain in Northeast Ohio and is closing all but three of them, according to an announcement Monday by the chain, Ritzman Pharmacy, which is based in Medina. Critics said the news was more evidence that CVS has used its clout in the pharmacy middleman business to drive out competition in the retail pharmacy business.
Ritzman stores in Akron and Berlin will continue operating with the same staff, but now under the CVS name, a statement by Ritzman said. Also, the chain will end its participation in a pharmacy at Northeast Ohio Medical University, which will review how it will handle its pharmacy business.
But the release also said that pharmacy files will be transferred to nearby CVS stores while Ritzman pharmacies will close in all remaining locations: Rittman, Shreve, Sugarcreek, Wooster Milltown, Medina River Styx, Millersburg, Barberton, Wadsworth, Norton, Seville, Green, Wooster Downtown, Ashland, Orrville, Medina Forest Meadows, Dover and Jackson.
Ritzman had been in business since 1950.
“This has been a lengthy process for Ritzman Pharmacy including engaging the investment community, local and national chains, as well as private equity. We have worked hard to sustain the independently operated community pharmacy model and are disappointed to bring it to a close, but it is time to pass our retail business to a company with more resources,” Ritzman president and CEO said Eric Graf said in the statement.
Graf couldn’t immediately be reached by phone.
CVS spokesman Michael DeAngelis said it wasn’t “fair or accurate” to say that CVS used its pharmacy middleman business to squeeze down Ritzman profits and then buy the chain.
“Like every other pharmacy chain, CVS Pharmacy has acquired independent pharmacies and chain pharmacy locations that are closing since well before CVS and Caremark merged a dozen years ago,” DeAngelis said in an email. “Pharmacy acquisitions are the standard industry method through which a closing pharmacy transfers its prescription files to another licensed pharmacy.”
But Antonio Ciaccia of the Ohio Pharmacists Association said news of the Ritzman closure fits into a disturbing pattern. Community pharmacies have complained that CVS Caremark, which determines their reimbursements for the vast majority of Ohio Medicaid patients as well as a great many others, has slashed reimbursements at the same time that Caremark’s corporate sibling offered to buy them.
They said that CVS slashed Medicaid reimbursements especially deeply in the final months of 2017 — the same same time that CVS announced a $ 70 billion merger with insurance giant Aetna. Now a federal judge in Washington, D.C., is assessing whether the U.S. Justice Department adequately addressed anti-competitive concerns in approving the merger.
“CVS continues to tighten its stranglehold in the face of intense scrutiny, which shows just how confident they are that Ohio will continue to allow them to have free rein amid the status quo,” Ciaccia said in an email.
He added, “This is a devastating loss for many Ohio communities who rely on the high level of service that Ritzman Pharmacies provide. Unfortunately, this latest casualty was just a matter of time due to a lack of reforms from state officials to fully fix Ohio’s PBM problem and restore order to the pharmacy marketplace.”
DeAngelis denied that CVS had used its huge pharmacy middleman business to benefit its retail operations.
“We maintain stringent firewall protections between our CVS Pharmacy retail business and our CVS Caremark PBM business to prevent any anti-competitive activity,” he said. “Any retail acquisition activity by CVS Pharmacy is completely unrelated to, separated from, and not coordinated in any way with CVS Caremark’s management of its pharmacy network.”
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