Cardiologist Alan Jackson (right)
is starting a drug co-op with the
help of pharmacist Saifi Vohra.
Photo: Megan Bearder
April 2006 | Whole Health
Rx for Savings
Physician aims to start a
co-op for prescriptions
By Len Strazewski
Most people think food when they hear the word co-op, short for co-operative, a business or service owned by the community of workers and customers that it serves.
In fact, it was a grocery co-op that inspired Dr. Alan Jackson, chief of cardiology at Advocate Trinity Hospital on Chicago’s South Side, who was troubled that some of his patients were struggling to pay for their prescriptions.
“I’ve been a member of the Hyde Park Co-operative for many years and always appreciated the economic efficiency and community involvement,” he said. “There’s no reason the same concept can’t be applied to prescription drugs.”
So, Jackson has been preparing a business plan and proposal for a community-owned cooperative pharmacy that would serve far South Side Chicago neighborhoods and suburbs as well as Northwest Indiana communities. He has been working for two yeas on his plan, which would provide discounted prescription drugs and health education services.
“For the past several years, I have seen patients who are progressively less able to pay the full cost of their prescription drugs, particularly seniors who are often faced with choosing between their medicine and other important personal expenses,” he said.
Medicare Part D, the new prescription drug service for seniors, hasn’t been of much help, as it leaves more than $2,000 of drug costs for participants uncovered, he said. Also, many eligible seniors find the plan too complicated and fail to sign up, he added.
Jackson envisions a retail pharmacy co-operative for prescription drug purchases, similar to grocery co-operatives already in business in the Chicago-area.
The program would offer participants an immediate savings, passing along wholesale discounts and other advantages to members, he said.
“Drug companies offer discounts and rebates to the trade and corporate prescription drug plans that individual consumers never see. As owners of the co-op, members would benefit from whatever discounts we can negotiate,” he said.
Jackson plans to finance the co-op’s estimated cost of $200,000 by signing up 2,000 or more participants with an annual membership fee of $100.
Unlike mail-order buying clubs that order drugs from Europe or Canada, the co-op would have a community presence and provide meeting space for health education and senior social activities. It could also use its membership size to negotiate health club discounts and other savings for participants.
Jackson plans to launch the pharmacy co-op this year in a retail location in the Lansing/Calumet City area, making it accessible to members in both Illinois and Northwest Indiana.
Community-owned cooperative pharmacies are common in the United Kingdom and Europe, according to Saifi Vohra, a pharmacist and pharmacy consultant at Roseland Community Hospital who provided technical assistance to develop Jackson’s co-op.
“Community co-operative purchasing is a big trend overseas and quite successful, but in the United States there have only been isolated experiments. However, it is clear that the technique is sound,” Vohra said. “Recovery of costs should come quickly. In Europe, participants generally receive an annual rebate based on their total spending,” he said, pointing out that $200,000 would be an adequate start-up budget to hire a pharmacist, open a storefront and build an original inventory.
The plan has some appeal for health reform advocate Brian Klepper, president of the Center for Practical Health Reform in Jacksonville, Fla. “The problem with pharmacy delivery is that it is filled with games the drug industry has created over time to disguise the real costs of prescription drugs for consumers,” Klepper said. “If consumers want access to their medications at reduced cost, they are going to have to build structures that eliminate the corporate inefficiency and drive health system transparency.”
For information on joining the drug co-op call 800-508-2103 or e-mail.
Len Strazewski is a Chicago-area writer.
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