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Gatti Pharmacy in Indiana will close Monday. 

The Indiana area is losing an iconic pharmacy.

Gatti Pharmacy at 1024 Philadelphia St. in downtown Indiana is closing its doors effective Monday.

“We are so thankful for the support of the community and our patients and customers,” owner Stephanie Smith Cooney said. “We have been so proud to be your pharmacy and a fixture of this town for over 80 years.”

As Gatti staffers pointed out, many patients patronized their pharmacy for over 50 years. Gatti covered a wide variety of the population of Indiana County, offering such services such as free, next-day delivery and synchronizing medications for easy coordination.

“It was a really difficult decision,” Smith Cooney said. “We are not going out of business because of a lack of support, innovation, caring, or any of the normal things that help a business thrive.”

The closing affects 11 employees, and is blamed on the same reason as the Dec. 5, 2019, closing of Klingensmith’s Drug Store in Shelocta — PBMs or pharmacy benefit managers.

“Over 80 percent of our prescriptions were being reimbursed below our cost to dispense them,” Smith Cooney said. “So we were essentially losing money on 80 percent of prescriptions.”

According to a national PBM organization, the Pharmaceutical Care Management Association, “PBMs administer prescription drug plans for more than 266 million Americans who have health insurance from a variety of sponsors including: commercial health plans, self-insured employer plans, union plans, Medicare Part D plans, the Federal Employees Health Benefits Program, state government employee plans, managed Medicaid plans, and others.”

PBMs are projected to save employers, unions, government programs and consumers $1 trillion this decade, according to research by Visante, a company describing itself as “a multidisciplinary, clinician-composed consulting firm specializing in the business of pharmacy and healthcare compliance.”

However, Gatti staff said PBMs essentially act as middlemen and make it increasingly difficult for community pharmacies to stay in business.

After Klingensmith’s closed in Shelocta, owner David J. Cippel said state lawmakers had to embrace reforms to stop out-of-control PBMs.

“Pennsylvania families are paying more than they should for prescription drugs, while smaller, independent pharmacies are closing,” Cippel wrote in a February letter to the editor of The Indiana Gazette.

“It has been a struggle for years,” Smith Cooney said, “but it has been especially bad since 2019 when several of the pharmacy benefit managers cut rates even further.”

Smith Cooney said the COVID-19 pandemic has not had a negative impact on Gatti Pharmacy.

“Our issues precede it significantly,” she said. “I know lots of businesses are struggling, but as an essential business able to deliver and have drive-thru options, it has not been problematic for us since we’ve been able to adapt our operations. Sales overall this year are up 10 percent, and in any other line of business, this would be a good thing. However, higher sales volume when you’re taking a hit on most of it is not the ticket for a sustainable business and we continue to struggle financially even with increased business.”

In his February letter, Cippel called for passage of a package of bills aimed to “enact true PBM reform,” including Senate Bill 789, which would forbid PBMs from owning pharmacies, and House Bills 941, 942, 943 and 944.

SB 789 was referred to the Senate Health and Human Services Committee on July 9, 2019, where it has remained.

The four House bills, all of which also call for PBM reforms, were referred to the Senate Health and Human Services Committee after they were passed by the House in November. Three of the bills remain in that committee, while HB 943 was referred to the Senate Appropriations Committee in April.

“We’re also deeply sad that reform in the pharmacy payment model has not changed in time to save Gatti Pharmacy,” Smith Cooney said. “We wish the community our best.”

Prescription files from Gatti will be transferred to the Rite-Aid pharmacy at 375 Philadelphia St. Smith Cooney said Rite Aid has committed to continue several of Gatti’s services for patients.

Existing patients are invited to contact Gatti Pharmacy at (724) 349-4200 prior to June 30 with any questions or concerns.

Following June 30, patients can contact Rite Aid at (724) 465-2243.