When Iqbal Gill bought Reliable Rexall Sunset Pharmacy on Irving Street in August, he dreamed of a successful business he could leave behind for his children.
But in six months, he has burned through his $100,000 in savings and is $90,000 in debt, while the business is running at a monthly deficit of $22,000.
He hasn’t paid his $7,500 monthly rent since October, and his landlord filed an eviction lawsuit Jan. 31. By March, Gill will owe $37,500 in back rent.
Despite having years of experience as a pharmacist, Gill admits he is in over his head trying to run his own pharmacy.
The main problem is that he hasn’t been able to claim reimbursements from health insurance plans, forcing him to eat most of the cost of the meds he fills, and he’s at a loss as to why he isn’t getting the money.
“I didn’t know it would be such a big trap for me,” Gill said. “I don’t know where the money is going. It’s very complex. Even after all these years, I still don’t know how it works.”
His experience reflects the challenges of opening and operating any small business in San Francisco and, in particular, running a pharmacy at a time when even national chains with war chests and armies of lobbyists can’t figure out how to keep stores open, much less profitable.
On top of the foreseeable hardships, Gill has had to contend with bad luck of the sort that seemingly can strike a San Francisco business at any moment.
On Feb. 8, thieves broke into his pharmacy, prying open three safes and stealing 100 bottles of medication worth at least $15,000, plus $300 in cash, and causing roughly $5,500 in property damage. Police confirmed they are investigating the break-in.
He fears this may be the end of the independent pharmacy that’s been in business since 1932.
“It was not a good decision to take over this pharmacy,” Gill said. “I feel like closing it down.”
Gill paid $50,000 for the pharmacy — a steal, he thought. Having wanted to own one for years, he had looked around California, including at locations in King City, Fremont, and Newark, but the owners wanted at least $200,000. In addition to the low price, Reliable Rexall came stocked with roughly $44,000 worth of prescription drugs and is located in a prime neighborhood with healthy food traffic.
Gill figured he’d build a successful business by stocking more over-the-counter, name-brand drugs, particularly birth control and pain relievers, to improve sales and compete with more well-stocked chains. But even after spending $14,000 on inventory, he has seen low sales, averaging around $300 a day.
“I just thought I’d buy the pharmacy and get the license, and that was it,” Gill said. “I didn’t know I’d get no reimbursements.”
Terry Carter, a consultant who has worked as a licensed pharmacist since 1973, said that while he isn’t familiar with Gill’s business, it’s easy for independent pharmacies to get lost in California’s labyrinthine requirements.
“The regulatory bureaucracy for a pharmacy is beyond the pale,” Carter said. “The application for a pharmacy license here is like 50 pages long. If you go to another state, it’s like five pages.”
Other local pharmacists say they too are losing money on prescriptions they fill due to inadequate reimbursements doled out by benefit managers, the middlemen between pharmacies and insurance companies.
“Right now, I’m losing everything because of no reimbursements,” Gill said. “There’s no clear path, I just need income.”
Many independents have been muscled out by pharmacy chains. Meanwhile, the chains are shuttering locations amid massive opioid settlements. Walgreens is slated to close 11 stores in San Francisco by Thursday, part of a plan to close 1,200 nationwide.
After the Walgreens closures, San Francisco will have lost nearly 40% of its licensed pharmacies over a decade, from 167 in 2015 to 104.
Eva Sutton said she’s been coming to Reliable Rexall from her 15th Avenue home for eight years. The 62-year-old said having a pharmacy nearby is important because she’s not comfortable filling prescriptions online and prefers meeting face-to-face with a pharmacist.
“It’s just sad,” she said of Rexall’s potential closure, clutching a bottle of heart medication. “He works so hard, and it’s terrible for this to happen.”
The nearest pharmacy to Reliable Rexall is the Walgreens at 2050 Irving St., which is not currently slated to close and is a 17-minute walk, or a 12-minute ride away on the N-Judah.
Gill said he is calling on his landlord, Adib Dudum, to drop the eviction lawsuit and offer discounted rent until he can make his business profitable.
Dudum’s attorney, Nick Colla, said his client has been “very generous” with Gill, charging rent well below the market rate. Dudum allowed Gill to open before paying a $9,000 security deposit, which is still owed, Colla said. The lawyer denied that Gill has asked for a rent reduction or for the eviction to be scrapped.
Representatives for Supervisor Myrna Melgar, whose district includes the Inner Sunset location, said it would be “devastating” for the store to close and has connected Gill with the city’s Office of Small Business for help. But they conceded that he has to pay what is owed.
“At the end of the day, you have to pay rent,” Melgar aide Emma Heiken said.