A friendly electronic chime sounds as customers walk through the front door of Capitol Heights Pharmacy.
Tucked away along 12th Avenue near Blue Pan Pizza and a Little Man Ice Cream outpost, the place looks no different than your typical corner store. There’s a diverse array of alcohol and salty snacks, plus a handful of fresh grocery items, available for purchase.
But, if you push past those aisles, at the back of the store lies one of Denver’s only independent pharmacies. Capitol Heights Pharmacy is one of a handful of independent pharmacies left in the Denver metro area, compared to hundreds of chain pharmacies at places like Walmart, Target and King Soopers.
The business is owned by husband and wife team Kristin and Chris Holmes, who bought it in 2013 shortly after Kristin obtained her Doctor of Pharmacy degree.
“We actually just sent letters to all of the independent pharmacies in the state of Colorado asking if anybody was looking to sell,” Chris Holmes said. “And this was one of the handful of replies that we got.”
Independent pharmacies make deeper connections.
Mom-and-pop stores have disappeared, and even multi-billion dollar chains have struggled in the pharmacy business recently.
But Kristin Holmes says her mentors in pharmacy school inspired her to pursue a career in community pharmacies.
“It just didn't look appealing to me to go into the traditional chain pharmacy setting, but I knew I wanted to work with a community and be part of a community,” she said.
The Holmeses are at the pharmacy nearly everyday. When customers come in for prescriptions, Kristin Holmes is typically behind the counter. Chris Holmes manages a hearing health center in the corner of the shop. When customers call the pharmacy, it isn’t a confusing maze of robot messages — a human is almost always at the end of the line.
It’s not all roses, however.
Chain pharmacies have enormous advantages over independents. They have a near endless supply of staff to call in from other locations during a staffing shortage, and access to a robust online infrastructure.
And of course, mega-pharmacies like CVS and Walgreens are worth billions. When a problem arises at Capitol Heights Pharmacy, the Holmeses have to figure out a way to pay for the solution.
“We've had a couple wasps in here,” Kristin Holmes said, pointing to a wasp trap behind the counter.
Those challenges have driven more and more independents out of businesses. A 2020 report from the Pharmaceutical Care Management Association found there were 158 independent pharmacies in Colorado in 2019, a 16 percent drop since 2010.
Capitol Heights Pharmacy employees told Denverite they were ecstatic to find work at an independent pharmacy. But Jessica Vaughn, a staff pharmacist, said it came at a relative price.
“It's like a trade-off,” Vaughn said. “I did take a cut in pay from what I was making elsewhere, but I knew that coming in and I was 100 percent willing to do that because this is what I wanted to do and I knew this is the environment that I want to be in.”
Witnessing public outrage against the health care system.
As a pharmacist, Kristin Holmes has seen firsthand how angry customers get when dealing with the health care system.
That all came to a head in December, when she saw headlines about Luigi Mangione’s alleged assassination of UnitedHealthcare CEO Brian Thompson. She was horrified by the act of violence, but she wasn’t surprised.
“It's infuriating,” she said. “On all sides you see these billions of dollars that these companies make and that, yes, somebody can't get their insulin or their inhaler. It doesn't make any sense.”
The Holmeses say customers aren’t the only ones being shortchanged by the American health care system.
Pulling out a redacted receipt from a recent transaction, Kristin Holmes pointed at numbers that, to her, spell out the health-care crisis in the U.S.
The receipt showed that Capitol Heights Pharmacy was asked to fill a standard steroid cream prescription that cost $9.77 for the business to purchase. The customer was told by their insurance company to pay a $64.75 copay for that prescription.
Of the copay the customer paid, the insurance company took back $53.38, leaving a little over $11 for Capitol Heights Pharmacy.
“The patient comes in and thinks that they paid me $64 for this med when in effect, I made $1.60 filling this prescription because the insurance company took this amount back from me for the privilege of filling the med.”
Kristin Holmes said this is just one example of a common pattern — and many prescriptions she fills end up costing the pharmacy money.
The Holmeses blame one group for the distrust in the health care system: pharmacy benefit managers.
What are pharmacy benefit managers?
Pharmacy benefits managers do a lot, but at their core, they are third-party companies that negotiate the price of prescription drugs between insurance providers and pharmaceutical manufacturers.
Basically, they’re middlemen between drug companies, insurances, pharmacies and consumers. Since their inception in the late 1960s, pharmacy benefit manager companies have grown in power and influence over the health care system.
Pharmacy benefit manager companies have faced scrutiny for their business practices. While the companies say they negotiate lower prices for consumers, several attorneys general have filed lawsuits against pharmacy benefit managers, claiming some break consumer protection laws by taking kickbacks and driving up prescription drug prices.
Under the Biden administration, the Federal Trade Commission conducted a two-year investigation into pharmacy benefit manager practices. The report led the FTC to sue three of the country’s top pharmacy benefit managers, alleging the companies created a “perverse drug rebate system” that artificially inflated the cost of insulin.
The Holmes family is part of a new effort to regulate pharmacy benefit managers.
A bipartisan bill moving through the state legislature could regulate pharmacy benefit managers more in the state of Colorado.
It introduces several rules for pharmacy benefit managers, including one preventing them from being compensated based on the price of an individual drug and increasing transparency. A bill passed last year similarly increased oversight over pharmacy benefit managers.
During HB25-1094’s first hearing in the House Committee on Health & Human Services, the bill received support from the Holmes family, as well as organizations like the Colorado Retail Council Chain Pharmacy Committee, the Colorado Pharmacist Society and several groups representing chronically ill patients.
“Pharmacies are closing, as you've heard, decreased staff, decreased hours, burnout and safety concerns. It's hurting our patients. It's hurting our communities,” said Emily Zadvorny, the executive director of the Colorado Pharmacist Society. “We did a survey of over 1,000 pharmacists in our state. They identified [pharmacy benefit managers] as a major contributor to deteriorating work conditions.”
Opponents of the bill included the Colorado Chamber of Commerce and the Pharmacy Care Management Association, which represents pharmacy benefit managers. They argued that it would increase insurance premiums.
“It will significantly impair their ability to negotiate with the insurers and that will increase costs for employers,” said Meghan Dollar, who spoke on behalf of the Colorado Chamber of Commerce.
Kristin and Chris Holmes testified to the committee on their anniversary, remarking that’s how devoted they are to reforming the health care system.
“The independent pharmacy will become extinct or will become a completely different type of entity, meaning that it'll no longer really just fill prescriptions for people,” she said.
