Sale considered ‘a healthy move’

Kittson Pharmacy sold to private owner, retains local employees

By Anna Jauhola
Kittson Healthcare will continue operating with a pharmacy in-house, with local staff, but the business has changed hands.
In 2022, officials at Kittson Healthcare along with a broker and attorneys officially sold the retail pharmacy business to Loften Deprez, who owns Healthy Pharmacy in southern Minnesota. The sale officially took place Oct. 12, 2022, but they are still in the process of changing everything over. When Deprez officially takes over, the pharmacy will continue operating as Kittson Pharmacy and patients will not be affected.
“The same system is in place, it just transferred over,” said Everett Butler, interim CEO for Kittson Healthcare. “It’s a software program. There’s a monthly fee that is transferred over to Loften. So nothing internally changed in the pharmacy.”
Butler said Deprez is now registered and licensed with the hospital’s main pharmaceuticals supplier, Cardinal Health.
When Kittson Healthcare initially purchased Anderson Pharmacy, Butler was also the interim CEO. While they projected the pharmacy would make money for Kittson Healthcare, “that wasn’t fact,” he said. “I think one of the driving factors for the board to buy (the pharmacy) from Harold (Anderson) was we weren’t going to have a pharmacy for our patients and we weren’t going to have a pharmacy for our practitioners to write scripts for.”
While Thrifty White in Karlstad was an option, that’s 30 minutes away and the board agreed there needed to be a local pharmacy.
“So we thought we could make money at it, but the money wasn’t there to be made without the 340B program,” Butler said.
The initial changeover was much different as they had to build a profile for each client in the software. But the transition to Healthy Pharmacy will be much smoother for all existing patients.
The biggest advantage of the sale is that Kittson Healthcare will keep all 340B program funds.
“The pharmacy as a retail pharmacy was at a break-even at best,” Butler said. “Where the funding for the pharmacy came in was under the 340B program. The 340B program is based on the number of prescriptions written by our providers. The medications used to fill those prescriptions is where the 340B money enters the picture.”
Money generated by that program goes into a dedicated, restricted account that can only be used for capital improvements for Kittson Healthcare. Butler said that fund currently holds about $350,000. If management wants to spend any of that money, the request is submitted to the governing board and they make that decision, Butler said.
While the sale has already happened, Kittson Healthcare and Deprez are tying up some loose ends. Through March, the pharmacist and pharm tech are still employees of Kittson Healthcare until Deprez completes his business set-up with a human resources function, Butler said.
“The way the sale was structured is that Solomon (Baah) and the pharm tech are still our employees until April 1,” Butler said. “The agreement was we would keep the employees as ours for payroll purposes and then he reimburses us for that cost. And we’re in the process of reconciling because we did his billing and we slowly got the insurance companies switched over to him, and Cardinal Health.”
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While they continue to settle up, Butler added that Pharmacist Nicole Johnson will no longer have duties in the retail pharmacy. She will now solely focus on her long-time role as pharmacist for the hospital and nursing home pharmacy, as well as other responsibilities associated with that role.
“Of course, Deprez’s business is called Healthy Pharmacy, but I think it’s a healthy move for Kittson Healthcare to do that,” Butler said. “Gabe (Mooney) called and ran it by me .. and I said, ‘I think if it works out that it’s a better deal for Kittson, you gotta sell it.’”