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Elephant Pharm shutters its three doors

BY Michael Johnsen

BERKELEY, Calif. —A down economy and a tightening credit market may have been the final nails in the coffin for Elephant Pharm, a three-store hybrid pharmacy chain that closed its doors for good last month. But the concept may have been doomed from the start.

Starting a 12,000-plus sq. ft. pharmacy from the ground up—in other words without any pre-existing prescription files—is just not that easy to do without the economies of scale afforded larger national competitors—in any economy.

“The company has been burdened with obligations that were quite difficult for a company of our size to carry,” Elephant Pharm CEO Kathi Lentzsch stated. “The current management team and board of directors worked diligently to grow the company to a size that could bear these obligations, but due to the current economic conditions and the tightening of the credit market, it has not been possible to raise the capital required to continue the business.”

So it was more Elephant’s lack of heft—the company fielded the buying leverage of four locations before closing its Los Altos, Calif., store in September 2008—that sealed its fate rather than its business vision as a pharmacy that dispensed both traditional allopathic medicines alongside Ayurvedic herbs.

Originally designed by entrepreneur Stuart Skorman, the Elephant Pharm concept was meant to be the pharmacy for baby boomers, much like the 23-store Colorado chain Pharmaca, a 5,000-sq.-ft. hybrid chain that converts independents with pre-existing prescription files into a healthier-for-you pharmacy, which Skorman visited prior to embarking on his vision for Elephant.

However, as outlined in Skorman’s book, “Confessions of a Serial Entrepreneur,” Elephant Pharm faced many challenges from the outset. “We discovered the hard way that one reason no one else ever opened a big-box, upscale pharmacy is that these stores, which are driven by prescription sales, ramp…slowly because people are slow to switch pharmacies,” Skorman wrote. “That accounted for half of the outrageous losses we incurred when we first launched our operation, which was more expensive to operate than the traditional pharmacy.”

And that lack of buying power placed Elephant at a greater disadvantage—the chain’s national competitors paid some 10% less for products, Skorman estimated, which placed Elephant at a significant competitive disadvantage if it was to appeal to its customers’ pocketbooks.

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Obama may overturn Bush’s ‘conscience’ rules

BY Alaric DeArment

NEW YORK The Obama Administration may overturn the Bush Administration’s “conscience” rules that allow healthcare workers to invoke religious beliefs to deny certain services such as birth control, according to published reports.

The Los Angeles Times reported that Barack Obama may roll back the provisions, which allow pharmacists to refuse to prescribe birth control pills on account of personal religious beliefs. 

Seven states have also filed lawsuits to challenge the rule, the newspaper reported.

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Clear up patient medication guidelines, independent pharmacy group urges FDA

BY Jim Frederick

ALEXANDRIA, Va. The National Community Pharmacists Association wants the government to give patients a clearer, more concise set of guidelines on how to take their medications, the effects those drugs have and the risks and benefits they carry.

The independent pharmacy organization yesterday urged the Food and Drug Administration’s Risk Communication Advisory Committee to push for a change in the current system of overlapping instructions that go to patients along with their prescriptions. In testimony before the committee, NCPA asked the agency to develop criteria for a guidance that would describe “a single, patient-friendly, written prescription information sheet to eventually replace the multiple written documents that patients can currently receive from their pharmacists with a particular prescription.

Under current practices, those documents can include  Medication Guides, Patient Package Inserts [PPIs] and Consumer Medication Information [CMI]. Too often, said NCPA’s director of public policy, Tony Lee, patients discard the CMI and never read it — sometimes even throwing it away before they leave the pharmacy.

“While we recognize that the FDA has worked hard to try and improve these medication documents, the problem needs to be addressed in a fundamentally different way that combines useful written information with the personal relationships between the pharmacists and patients,” Lee told the FDA advisory panel.

“It is time for a comprehensive solution to this written prescription information issue,” added John Coster, NCPA’s senior VP of government affairs. “Any FDA effort to make CMI more useful for the patient should be accompanied by a broader assessment of the usefulness and purpose of the other information leaflets that pharmacist may be required to provide. We look forward to working with the agency and patient groups to meet this goal.”

Last summer, NCPA joined other pharmacy provider groups to file a “One Document” citizens’ petition with the FDA. The Risk Advisory Committee was convened specifically to address how to make CMI leaflets more useful for the patient, the group noted.

“These leaflets are voluntarily provided by the pharmacist, but the information contained in these leaflets often duplicates information in other written leaflets,” NCPA stated.

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