By Ima Riter
Staff Writer

BOSTON, Mass. -- Chinese line drawings and plants fill the windows, and rows of herbal medicines, homeopathic remedies and nutritional supplements fill the aisles of the small shop on Kneeland Street. Painted in sea-green, with signs in Chinese and English, the store seems more like an oriental wellness center than a chain drugstore. But its owned by CVS Corp., the giant Woonsocket, Rhode Island based drugstore chain.

One of about 50 CVS ProCare specialty pharmacy stores in more than 30 cities, the shop provides medications and natural health care for patients with HIV/AIDS, cancer, organ transplants and other serious conditions. At the counter, pharmacist Alice Chung chats amiably with the mostly Chinese customers from the neighborhood. Occasionally, she talks on the phone with customers who have questions about side effects of medications they're taking.

Known for its 4,100 drugstores in the east and midwest, many with drive-through windows and 24 hour operations, CVS takes a step back from the hustle and bustle of its regular stores with its ProCare subsidiary.

Aimed at patients requiring complex drug therapies, the ProCare stores, called apothecaries, average 3,000 square feet -- less than a third the size of a typical CVS store.

The staffing ratio though, is higher, with at least 2 pharmacists usually on duty. "The goal is to have technicians fill, and pharmacists counseling," said John Ryan, a ProCare market manager.

Unlike standard CVS stores, where records are kept in open bins, prescriptions are stored in closed drawers, to protect patient confidentiality. In the back room, a refrigerator is filled with vials of medicines that most drugstores would have to special-order because they wouldn't be in stock.

Here, Ryan said, they are "fast movers."

They are also expensive.

For example, a package of 10 vials of Neupogen, used to boost white blood count cells after chemotherapy, costs about $1,400. While the store does a brisk walk-in business, many of the sicker patients stay in contact with Chung and the other pharmacists by phone.

ProCare does same-day, FedEx delivery to patients. For CVS, which posted $18 billion in sales last year, the company's three-year-old ProCare subsidiary is a small but growing piece of the business. Nationwide, the specialty pharmacy market is estimated at $14 billion, and is expected to grow 20 percent a year. CVS estimates that ProCare sales will reach $2 billion a year within four years, according to spokesman Todd Andrews.

CVS has two ProCare stores in Boston -- on Kneeland Street and on Tremont Street. In Rhode Island, there is one ProCare shop, inside Rhode Island Hospital in Providence. Another store is being considered for Boston, as well as outlets in New Haven and Hartford, according to Dennis Burton, president of ProCare.

Like many of the ProCare stores, the Rhode Island hospital store was formerly an independent pharmacy that was acquired by CVS. Ernie DiFazio, the pharmacy's manager, said being inside the hospital improves interactions with customers.

He regularly goes along on hospital rounds, discussing medications with patients, sometimes shipping prescriptions to their homes before their return. ProCare also processes patients' often-complicated prescription drug insurance bills.

Last February, Robert Urquhart, 34, of Cranston, was discharged from Rhode Island Hospital five days after a transplant procedure, with a new kidney and a battery of prescriptions. "When I first got out of the hospital, I was taking between 35 and 40 pills a day," said Urquhart, a salesman for Rizzo Ford in North Providence. His medications cost about $2,500 a month, but through ProCare's handling of his claims, Urquhart pays only about $100 a month.

"They take care of all the billing," he said. "I've never had to sign or fill out anything. They do a very good job; they make it very convenient."

For pharmacists, working for ProCare is a chance to escape the chain drugstore grind. "I really love this," said Chung, 30. "In a retail store, its just basically filling prescriptions. You don't have much contact with the customer at all." Here, she said, she develops relationships with patients, and uses her expertise to answer questions about the medications they take. "They feel comfortable," she said. "They call with any little side-effects question."

ProCare staff members also do community outreach work, such as conducting sessions on AIDS medications at clinics and support groups in Providence, Boston and Frammingham, Mass. Last month, CVS completed the acquisition of the specialty pharmacy business of Stadtlander Pharmacy of Pittsburgh, a subsidiary of Bergen Brunswig Corp., for $124 million. In the deal, CVS acquired 4 wellness centers and 16 mail-order facilities, boosting the total number of ProCare facilities to 56. Some consolidation is expected, though, and ProCare expects to have about 50 facilities at year's end.

Locations include New York, San Francisco, Los Angeles, Dallas, Washington, Philadelphia and Baltimore.

"The stores really are urban in focus," Burton said. "They are typically either in a neighborhood with a prevalence of HIV/AIDS, or near a major treatment center such as Rhode Island Hospital." Ron Gonscak, Rhode Island Project AIDS's wellness coordinator, said ProCare "is something that's been welcomed by a lot of people."

Pharmacists at the ProCare store in Providence have helped patients with AIDS obtain low-cost or free medications through drug programs at pharmaceutical companies, and have come into the project's offices to talk about medications with patients, Gonscak said.

"Specialty pharmacy is a very-fast growth area and CVS is a leader in it now," said Mark Husson, a drug-store industry analyst with Merrill Lynch Global Securities. "It seems to me a very smart and strategic thing to do."

While the specialty pharmacy market is fragmented, other major drug chains are eyeing it. Walgreen Co., Right Aid Corp., and Eckerd Corp., have all recently begun giving pharmacists special training in AIDS. And Eckerd operate two patient centers in Atlanta, Georgia, that provide pharmacist counseling for patients.

"They're all in it to a certain extent," Husson said. But no one has made as much of an effort as CVS to dominate the specialty pharmacy market, he said. "To make sure they keep those very high-usage customers, they give them the treatment they need and try to capture as much of their drug bill per year as they can," Husson said.

John Ransom, a drugstore industry analyst with Raymond James, said he thinks highly of the specialty pharmacy business, but added, "It's harder than it looks, because you have to pick the right drugs." Certain drugs don't provide high enough profit margin.

Epogen, for example, an anemia drug for kidney dialysis patients, is manufactured with "very little pricing concessions" to the distributors, he said. To be profitable, a specialty pharmacy needs to sell a drug with a "high growth rate," but enough profit margin for the pharmacy. Otherwise, he said, "there are a lot of expensive drugs, but the manufacturer keeps all the margin."

Meanwhile, he said, CVS is big enough to operate ProCare as an "incubator" business until it hits the right mix of costly drugs and healthy profits. In the future, CVS' Burton said he expects biotech injectibles will be a fast-growth product for ProCare. Burton said CVS began ProCare because it recognized specialty pharmacy as an emerging area, and also realized that patients requiring complicated drug therapy "had very different needs.

"We think it's a profitable venture," he said, "and the nice thing about it is the patient benefits as well."