UPDATE: Medicap Pharmacy selling to Sterling Pharmacy – Austin Daily Herald

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Jon Engelhardt, owner and pharmacist at Medicap, sits next to the Rx Takeback box inside the business on Oakland Avenue West in this March 2019 photo. Engelhardt and his wife Ginger recently announced they were selling the business to Sterling Pharmacy. Herald file photo

Shoppers peruse the goods at Sterling Main Street In November of 2020. Herald file photo

Sterling Main Street to close in 2025

Two pharmacies in Austin are in the process of becoming one, with more changes coming next year.

In a letter to patients this week, Pharmacist Jon Engelhardt of Medicap Pharmacy, announced that he and his wife Ginger were selling their business to Sterling Pharmacy. The sale will be official on Nov. 1.

The Engelhardt’s have owned and operated Medicap for 27 years, but decided to sell the business because of a desire to step back from ownership responsibilities and a desire to spend more time with family.

However, the letter also mentioned financial strains on pharmacies over the last several years that have resulted in both independent and national chains closing as another reason to step back.

In a statement from Sam Ewing, president of Sterling Pharmacy, Ewing referred to pharmacy benefit managers (PBMs) that have lowered reimbursement rates for prescription drugs significantly leading to closures. Most recently, Walgreens announced that it would be shuttering 1,200 stores and that these kinds of struggles would impact independent businesses as well.

“Pharmacy is the heart and soul of our business, and it is there that we must focus going forward,” Ewing said. “Purchasing Medicap and merging our businesses into one building will significantly lower our overhead, create our highest-volume retail pharmacy, and strengthen our commitment to — and presence in — our hometown of Austin.”

 “Combined, we have been taking care of the Austin community’s prescription needs for over 90 years,” he added. “This purchase ensures that we will continue to do so for many years to come.”

However, in a letter from Sterling to patients, it was explained that these changes would result in the closing of Sterling Main Street next year.

“Unfortunately, these changes also mean that we will be closing our Sterling Main Street location in 2025 and moving on from the gift and toy business,” the Sterling letter read. “For many years, due to the growth of online retail stores, our gift shop has not made financial sense. This part of our business brought us so much joy, but more importantly, it brought us the most amazing employees, and we will miss them so much.”

In selling Medicap, the Engelhardts noted a desire to find the right partnership to continue serving customers.

“Like Medicap, Sterling is an Austin-based, family-owned independent pharmacy with deep roots in the local community,” Engelhardt said in the letter. “They have also demonstrated that they are willing to commit resources and capital to the long-term growth, continuity, and future of our business. Put simply, we are stronger together.”

It’s also a chance for Engelhardt to come full circle. For 10 years, between 1986 and 1996, Engelhardt had worked for the Astrup family at Sterling Drug when it was situated where Ace Hardware currently is. He has been hired once again by Sterling.

“I am grateful to have the opportunity to wind down my career with them as your pharmacist and as a part of the Sterling team once again,” Engelhardt said.

Engelhardt stressed that very little would change, with customers still able to pick up prescriptions at the location. Staff currently at Medicap have also been offered positions and that at some point in 2025 the two pharmacy teams will merge and operate out of the current Medicap building.

“We are working with Sterling to make the transition as smooth as possible, but please understand that there may be a few bumps in the road,” Engelhardt stated. “Thank you for your loyalty over the years. I look forward to continuing to serve you and your family for many years to come.”

In the Sterling letter, it was stated that there will be an upgrade to the drive-thru lane at the Medicap location, added workstations to accommodate more staff and improvements made to dispensing automation.

To that end, Sterling said that it was planning to construct a state-of-the-art, highly automated dispensing facility. The plan is to initially fill prescriptions for Sterling pharmacies and quickly begin offering services to other pharmacies.

“This automation will allow pharmacy teams more time to provide safe, thorough, patient-centered care while still allowing same-day, local access to pharmacists, vaccinations and medications,” the release explained.