Jackie Fielder wants city report exploring subsidies for independent pharmacies — plus new middleman regulations
by JUNYAO YANG FEBRUARY 25, 2025 (MissionLocal.org)
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As Walgreens shutters locations across San Francisco this week, District 9 Supervisor Jackie Fielder will ask the city on Tuesday to explore developing “a pharmacy cooperative network” to ensure access for communities.
Under the initiative, the city’s Budget and Legislative Analyst, an independent office that works for the Board of Supervisors, will produce a report exploring how independently owned and city-owned pharmacies could work together to fill the gap left by Walgreens’ decision to pull out of various neighborhoods.
Walgreens announced the closure of 12 stores in San Francisco in January, including the Potrero Walgreens near San Francisco General Hospital, an essential pharmacy for residents in the Mission and Potrero Hill. All locations slated to shut will close this week.
“Here in the U.S., where our healthcare has been put in the hands of profit-seeking corporations, where retail pharmacies like Walgreens are perpetually understaffed, if not shuttered, people have to take several buses, wait in long lines, and organize their whole days around filling a prescription,” said Fielder in a statement. “It doesn’t have to be this way.”
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The report would also dig into how state laws can regulate “pharmacy benefit managers,” a middle entity between pharmacies, health plans and drug manufacturers.
Independent pharmacists say these middlemen are a major reason for their struggles in recent years. Pharmacy benefit managers control how much pharmacies are reimbursed from insurers for a drug. At the same time, pharmacy owners and advocates decry what they call arbitrary fees attached to every prescription.
In the end, the amounts pharmacies are reimbursed are lower than, or just about at cost, for the drugs dispensed. Six independent pharmacy owners told Mission Local last year that they end up suffering losses on high-value branded drugs, such as anti-diabetic medications like Ozempic and Zepbound.
“Pharmacy benefit managers make it extremely difficult for our local pharmacies to thrive,” said Preston Kilgore, Fielder’s legislative aide. Last year, a bill introduced by Sen. Scott Wiener set out to regulate the pharmacy benefit managers, but Gov. Gavin Newsom vetoed it.
The report will also identify ways to support existing and new independent pharmacies in the city. Solutions could include possible city-startup funds, ongoing subsidies or cash advances for co-ops and existing independent pharmacies, according to Fielder’s office.
For example, the Department of Public Health could purchase large quantities of drugs and drive down the share of overall costs. When independent pharmacies don’t have the cash flow to wait for reimbursements for a few months, the city could intervene and buy in bulk, “similar to Costco,” Kilgore said, before distributing to pharmacies at a reduced cost.
“The BLA’s report will explore local and state government interventions to ensure that we have a healthy environment for our local pharmacies in San Francisco,” said Kilgore.
Pharmacy owners, for their part, welcomed the initiative.
“Anything that can help us save money will be great, because [pharmacy benefit managers] are not paying what they are supposed to pay,” said Ed Nasrah, co-owner at Daniel’s Pharmacy on Geneva Avenue. “More importantly, it gets the medications to the patients.”
The report will take about four to five months to complete, according to Fielder’s office.
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JUNYAO YANG
Junyao is a California Local News Fellow, focusing on data and small businesses. Junyao is passionate about creating visuals that tell stories in creative ways. She received her Master’s degree from UC Berkeley Graduate School of Journalism. Sometimes she tries too hard to get attention from cute dogs.More by Junyao Yang
