My two cents: Many Illinois pharmacies are at breaking point

SHARE My two cents: Many Illinois pharmacies are at breaking point

Pharmacist John Endris prepares a prescription at the Complete Care Pharmacy in Springfield, Ill., Friday, Sept. 30, 2005. (AP Photo/Seth Perlman)

You can’t buy much with two cents, but I can tell you as a pharmacy owner, that many of us make do with just that every day. Our razor-thin profit margins exist especially in Illinois because of the litany of cost mandates at federal, state, and local levels that result in employee reductions, slow business growth, or worse.

We are at our breaking point.


The two cents is called “net profit” and the average local pharmacy owner makes just that from every dollar. The remaining 98 cents goes toward expenses ranging from the cost of goods to labor.

Average pharmacy owners pay the same amount for taxes as they net in profit. If this continues, pharmacy owners could find that they are paying more into taxes than they receive in take-home profit, which could mean that their businesses are no longer sustainable.

Pharmacies in Illinois had their bottom lines cut most recently in 2012 with a 3 percent across-the-board reduction in Medicaid pharmacy reimbursement. This came after the Illinois pharmacy community worked with the state to achieve an annual savings of at least $46 million. This is disturbing because Medicaid reimburses pharmacies at rates less than they might pay for their inventory. It also sent a terrible signal to those who try to work proactively with the state to help them solve problems. According to the National Association of Chain Drug Stores, Illinois ranked 48th in Medicaid payments in 2015.

To put it simply, pharmacists have done our part, and additional cuts to our businesses would be crippling.

According to Gallup’s annual Honesty and Ethics survey, pharmacists are the second most trusted

profession and provide critical medical care, especially in areas that are medically underrepresented. In rural areas, pharmacies are often the only medical care conveniently available, and yet, policy makers are creating an environment where they cannot be successful.

In the City of Chicago and Cook County, we will soon see one of the highest minimum wages in the

nation, the highest sales tax in the nation, and the highest tobacco taxes in the nation. This is on top of the largest property tax hike in Chicago’s history. Now they are proposing paid leaves, higher gas taxes, and another significant property tax increase.

In Springfield, the burden of compounded taxes and mandates is stifling business. Our wish is to allow Illinois businesses to do what they do best: generate business and generate a significant share of the state’s tax revenue. Pharmacists aren’t asking for special treatment. But policies that lead to reduced hours for workers or layoffs, fewer sales, or closed businesses don’t help our state or local communities. As employers, we don’t see each proposal in isolation. We see the entire landscape, and we are being asked to pay or plan for paying for a wide array of well-intentioned programs. While well-intentioned, their combined effect is suffocating economic growth and opportunity.

It has never been more important to provide an environment that encourages investment by businesses. We need increased revenue sources to combat decades of state and local government spending and pension debt. Allowing local businesses such as pharmacies to run their business without running them dry is the best way to get there.

Dr. Tim Lehan, is a pharmacist/owner of Lehan Drugs, a family-owned pharmacy operating in Dekalb since 1946.

The Latest
Just before 2 a.m., the man, 42, was sitting in a parked vehicle in the 9800 block of South Ellis Avenue when he was shot in the head, Chicago police said.
Too often, insurers deny coverage for genetic tests that have been established as a standard of modern health care and can have a significant impact on people’s lives.
Her boyfriend’s family watched him pop the question, and woman’s aunt is hurt that she wasn’t invited too.
Some Democrats issued statements of strong support for the vice president as the new candidate and others stayed mum, for now — with just weeks to go before the Democratic National Convention kicks off in Chicago on Aug. 19.