(FORTUNE Magazine) – OVER THE YEARS STREET LIFE HAS had more than a passing interest in drugstores, which is why a small news item about Toyota caught my eye. Seems the Japanese automaker is opening up its own pharmacies at its U.S. operations. The cost of reimbursing all those pill-popping American workers has had such an ill effect on its bottom line that Toyota has apparently decided to dispense the medicines itself.

Toyota, of course, is responding to the escalating cost of employee health care in this country and has seized upon one component of the problem--the expense of prescription drugs. According to a Toyota spokesman quoted in the Cincinnati Enquirer, the amount Toyota spends on prescription-drug costs "has been in the millions and has more than tripled since 1998, with a 15% increase projected for 2004."

Here are some of the particulars of Toyota's voluntary cost-saving plan. For medications taken on a regular basis, employees can save by using the company pharmacy or a mail-order service. Toyota will try to get employees to buy higher doses of medications and ask them to split the tablets. ("Get a really sharp knife ...") And the company will pay for the entire cost of some medicines if the employee uses a generic instead of a brand-name drug, in which case the employee may have a co-pay as high as 20%.

Toyota won't actually be running its own drugstore--that work has been contracted to an outfit called CHD Meridian Healthcare (which recently merged into a company called I-trax). Toyota will pay CHD a management fee and the cost to run the pharmacy; in return CHD passes on the drugs at cost. CHD's website claims it can purchase drugs for 30% to 50% less than a pharmacy benefit management vendor (which in turn sells the drugs to a pharmacist). CHD runs a couple dozen of such closed-door pharmacies--in which the store accepts only customers from a designated group, like a company or government agency--for the likes of U.S. Steel, Smithfield Foods, and General Electric.

The idea of employers providing health care goes back decades. (The history of HMO Kaiser Permanente dates to the 1930s, when Henry Kaiser started a hospital to look after his workers building the Grand Coulee Dam.) But the trend toward company-run pharmacies is a hot one now. Connecticut's giant Mohegan Sun casino just opened a pharmacy for its 10,000 employees and their families that's run by a CHD competitor called DrugMax. And Caesars opened one in Las Vegas serving its 15,000 Vegas health-plan participants. Smaller companies, too, like the 1,700-employee ARUP Labs (one of FORTUNE's Best Companies to Work For in 2003), now have their own druggists.

I recall reading a few years ago that one excellent way of becoming rich in America was to run a solid, high-margin small business. A dry cleaner, a liquor store, and a pharmacy were some of the examples given. But increasingly those of us who use full-service pharmacies are just subsidizing everybody else--customers in foreign countries, yes, but also Americans who buy drugs through the mail or online, or those who get medicine through Medicare and Medicaid, or those in nursing homes. Even people in prisons. All those folks get drugs cheaper than the rest of us. I'm not suggesting that drugstores will go the way of the buggy whip, but like record, movie-rental, and mom-and-pop hardware stores, pharmacies may be losing their grip on a once cozy little piece of the American business pie. The moral of the story? Forget drugs. Stick with liquor.

ANDY SERWER, editor at large of FORTUNE, can be reached at aserwer@fortunemail.com. Read him online in Street Life on fortune.com and watch him on CNN's American Morning and In the Money.