CVS to buy Ritzman Pharmacies, close several local stores

WOOSTER — Ritzman Pharmacies on Monday announced it will sell all 20 of its retail stores to CVS, causing the closure of several area locations including those inside Buehler’s stores.

CVS plans to operate Ritzman pharmacies in Akron and Berlin as CVS stores in the same locations and with the same staff, but a total of 17 locations will close as a result of a sale, according to a news release from the company. Stores on the closure list include locations in Wooster — both downtown and inside Buehler’s Milltown — Orrville, Rittman, Shreve, Millersburg and Ashland.

The sale should be complete by the end of February, according to the release, and all prescriptions will be transferred to nearby CVS pharmacies. The companies are working to ensure a smooth transition for Ritzman customers, and CVS plans to interview any Ritzman employee who wants to stay with the company, according to the release.

Ritzman, which is based in Medina, 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,” Ritzman president and CEO Eric Graf said in the release. “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.”

Since 2011, Ritzman has been the in-store pharmacy at all Buehler’s locations. With the pharmacy’s impending sale, Buehler’s is planning to repurpose some of the space now occupied by those pharmacies.

“We’re actually really excited to reclaim some of that space,” Buehler’s president and CEO Dan Shanahan said, adding that the grocery store has had “a great relationship with Ritzman.”

Shanahan said Buehler’s is working on a healthy living program that would offer, among other products, more organic, non-GMO and gluten free food items, which could inhabit some of the space left empty by the pharmacies.

“I think a lot of the things that you would find in the pharmacies, other than the prescriptions, you’re still going to find in Buehler’s,” he said.

The Ritzman Pharmacies within Buehler’s stores will likely close one at a time over the next three to four weeks, Shanahan said.

Ritzman’s decision to sell to CVS is part of a bigger trend in large national chains buying a variety of locally owned companies, according to Wooster Area Chamber of Commerce president Justin Starlin.

“It’s to be expected now in 2019, but I’m glad (Ritzman has been) able to be a part of the community for so long,” Starlin said. He added that Ritzman’s nearly 70 years in business is particularly impressive in the pharmacy business, which has become “an industry dominated by national players.”

In Holmes County, several local leaders expressed shock and disappointment over Ritzman’s sale and closure of the local pharmacy inside Rodhe’s IGA.

“I was totally shocked when I saw the news,” Millersburg Mayor Jeff Huebner said. “It would be nice if they could work and keep a location in Millersburg. I’m sorry to see a local business closing. I’m sorry to see the hardship it’s going to put on residents who use that pharmacy.” There options include going to Berlin or switching to Walmart.

Attempts to reach a spokesman from Rodhe’s IGA were unsuccessful.

Holmes County Commissioner Joe Miller says it would be beneficial to talk with a pharmacy and try to entice them to open a store in Millersburg.

“There should be a pharmacy in the county seat,” Miller said.

Statewide, critics of the sale 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.

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 told the Columbus Dispatch that 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 to the Dispatch.

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.”

This isn’t the first time that CVS has taken over a locally owned pharmacy. Following the closure of the Weiss Family Pharmacy in Ashland in 2003, CVS purchased the company’s pharmacy business.

— The Columbus Dispatch and staff writer Kevin Lynch contributed to this story.

CREDIT: JACK ROONEY