Compiled by Nat Frothingham
Editor’s Note: Richard Harvie and his business partner Jocelyn Depaolis opened Montpelier Pharmacy in January 2007. In recent days Richard Harvie has signed an agreement to sell Montpelier Pharmacy to Kinney Drugs. October 15 is the first day that Montpelier Pharmacy will become Kinney Pharmacy at the same 69 Main St. location just a step away from the State and Main traffic lights in downtown Montpelier. In the question-and-answer piece that follows, Richard Harvie reflects on starting the independent Montpelier Pharmacy about 10 years ago and explains why the Montpelier Pharmacy has been sold to Kinney Drugs.
The Bridge: Can you reflect on the very earliest days of starting an independent Montpelier Pharmacy which opened in January 2007?
Richard Harvie: Making that start was probably the highlight of my professional career. A lot of pharmacists want to do it. My business partner Jocelyn Depaolis and I were able to do it.
We were putting in abut 90 hours a week for probably five months from the time we started. The amount of paperwork to get contracts signed with the insurance companies was ridiculous — hours and hours. You had to get authorizations. We started a corporation. Then we were able to apply for a pharmacy license. Then we applied for a DEA (Drug Enforcement Administration) license so that we could handle controlled substances (for drugs like Percocet, Oxycontin and Valium).
The Bridge: You say a lot of pharmacists want to break free and start an independent pharmacy — why?
Harvie: I became a pharmacist because I wanted to help people. At an independent pharmacy I had a lot more flexibility than working within a corporate chain of command.
Jocelyn and I both used our 401k (retirement money) to start the Montpelier Pharmacy. We also had a $400,000 loan from our major supplier. It was a 12-month loan that we had to begin paying back over 11 months (they gave us a month’s grace period). We had to be confident that our customers would be there. We had pulled money out of our retirement accounts. We signed a lease with Tim Heney for four years. It was a huge financial risk.
Unless you’re confident that people will follow you (that the customers will be there) it’s a huge financial risk. But people did follow us and it worked out.
The other thing is that we had to find good employees. All of our employees started with us across the street (from the old Brooks Drugs.) They had faith in us. And the work they put in was critical to our success.
Our customers had to have faith in us. Sometimes people give you a first chance when you make a mistake. But not many chances after that. So we had to be good at what we did.
I can tell you more about our employees. We had to guarantee these people. We gave them raises and better benefits. We thought that if we took care of our employees they would give us better performance. I’m sure I was right in this. I had great employees. There’s no way I would have been successful without them. We operated as a team. That’s what made it work.
The Bridge: What caused you to think of retiring?
Harvie: On Jan. 2, 2015 after dinner I realized I was having a stroke. Fortunately it was minor with no lingering effects. By the time I got to the hospital I was fine. I realized I wasn’t getting any younger and I needed to change the level of stress in my life.
So I needed to reduce what I did in the business — and ultimately retire. When you work 60 hours a week that doesn’t leave a whole lot of time for walking and exercise and doing better things with your life.
The Bridge: You said that the 60 hours were a “tough 60 hours — what does that mean?
Harvie: There’s multiple levels. Being a pharmacist isn’t easy. There’s a lot of pressure. We’re a very busy store. We want to make sure we don’t make mistakes. That puts a lot of pressure on me.
There’s also the whole business aspect. We kept expanding, getting bigger and bigger.
Then during Tropical Storm Irene in August 2011 we lost the Waterbury store. It was three and a half feet of water. That cost us $600,000.
When I went to bed (on the night of the storm) I said to my wife, Cynthia, talking about Irene, that we’d have to do some fundraising – a lot of people are hurting. That’s before we knew what happened at the Waterbury store. We didn’t have flood insurance. It was a very expensive night in Waterbury, considering the other businesses and the closing of the State Office Complex.
The loan is almost paid off. But it was stressful. And we never fully recovered. All of a sudden with the Waterbury State Office Complex closing, there were 1500 fewer potential customers. Everyone in Waterbury was hit hard. It’s been a struggle there. We haven’t made any money in the Waterbury store. Had Irene not hit I think we would have been OK. And ultimately, when you run a business you are going to have personnel issues as well.
The Bridge: Why as a business did the Montpelier Pharmacy have to get bigger?
Harvie: Part of the model in retail pharmacy is that the margins are thin. The more you purchase the better margins you get. If you don’t have a lot of purchasing power – because of the way insurance is reimbursed, there’s virtually no room for error. You either grow or just go out of business. You can do an independent pharmacy and you can do OK financially if you don’t make any contributions, if you don’t give back to the community. The bottom line is that if you’re not doing a lot of business, you’re not going to get their discounts. If you aren’t part of a chain, you may not be able to survive on the thin margins. You might have trouble overcoming something as big as a flood.
The Bridge: Was it an inevitability that you sell out to a chain?
Harvie: If I was 15 years younger we may have been able to continue. But having a significant health issue played a very important part in that decision. I wouldn’t have been any good to anyone if I had died or had another stroke. It was something I needed to do.
The Bridge: A chain like Kinney Drugs may well be different than an independent pharmacy. What’s going to be the difference?
Harvie: I am hoping there will be no difference. I expect Kinney’s to offer the same service that we have in the past. Kinney reminds me of the old Brooks Drugs when Brooks was small.
The old Brooks had about 100 stores. And Kinney’s now has about 100 stories. Even though they are small, they are a big company. I remember when I worked for Brooks and I was unhappy, I could call the vice president of the company and he would get back to me within a day. And Kinney promises to do the same thing. I’m hoping that perhaps our customers can get the best of both worlds. We had other companies interested. I’m hoping this will work well.
I can’t overstate how much my employees and every customer who walked through the door mean to me. They were indispensable to whatever success we achieved. Without them, it wouldn’t have happened.
Let me add this about our employees — after the transfer to Kinney Drugs our employees will be getting the same pay and benefits that they had with us. I talked with Kinney’s at length about the transition. And they are going to have three extra people at the store for the first week, or longer, to make sure the transition is smooth. I am confident this will be good.