With hundreds of pharmacies closing their doors this year alone, experts fear more vulnerable Americans may not be able to get the drugs they need.
Pharmacy closures have been a problem for years. CVS said it will close 244 stores between 2018 and 2020 and close another 900 locations in 2021 through 2024. Walgreens said it will close 200 stores by 2019. This year, it announced an additional 150 closures. And Rite Aid recently filed for bankruptcy and announced it would close about 100 of its nearly 2,200 stores as part of a restructuring effort, with more closings to come. Brick-and-mortar pharmacies are facing a number of challenges: more competition, a few years left by the pandemic and squeezed margins as prescription drug reimbursement rates decline as the business changes.
Patients suffer when drug stores disappear, said Jenny Guadamuz, an assistant professor in the Department of Health Policy and Management at UC Berkeley’s School of Public Health. “You can think of closure as a disruption in care,” she said. “You had a routine: You’d go to a pharmacy that was geographically accessible — ideally affordable — that was probably the best fit for your health insurance plan. And that pharmacy no longer exists.
When pharmacies are closed, some patients have to walk long distances to get the medicines they need. That extra distance and time often means they never take their medication, Guadamuz says.
Melvin Thompson, now a health care consultant, was formerly the executive director of the Endelo Institute, a nonprofit organization working on health, education and community development on Chicago’s South Side. Thompson said four or five major drug stores in his area have closed since 2016, and new ones haven’t opened to fill the void.
“Losing the first pharmacy was a shock to the system,” he said. Some people have lost connections to trusted pharmacists or a nearby place to buy groceries. He noted that because of the closures, people were traveling long distances to get to drug stores. “We’re driving miles from our neighborhood to pharmacies.” During the Covid outbreak, Indelo organized transport to take the elderly to pharmacies for vaccinations, he said.
Thompson, who lives near the pharmacy on the south side, now has more pressure on the remaining spaces. “There are lines for seniors out the door for prescriptions … and now it’s a result of people all going to the same pharmacy,” he said.
While major chains have closed their doors, the number of independent pharmacies in the United States has remained fairly stable over the past three years, according to data from the National Association of Community Pharmacists, which represents the interests of independent pharmacists. But chain closures are unlikely to drive more business to independents, which face challenges outside of competition from national chains.
The negative impact of this trend is more pronounced for minority groups. In the year A USC study published in 2021 by the Guadamuth Collaborative Black et al Latino Neighborhoods in 30 US cities had fewer pharmacies than white and diverse neighborhoods from 2007 to 2015.
“If you’re in a low-income neighborhood and you’re in a Black and Latinx neighborhood, it’s not uncommon to have any pharmacies. And it’s very rare to have a pharmacy that meets your needs,” she says.
In some areas, pharmacies do more than fill medications. “They play an important role in society,” said Omolola Adepoju, a health services researcher and clinical associate professor at the University of Houston’s Tillman J. Fertitta College of Family Medicine. “You don’t need an appointment to talk to a pharmacist,” she added. Patients can walk in to get medications, vaccines and answers to their questions, making pharmacies “a critical access point for primary care services in underserved communities.”
In theory, Amazon or mail-order services could fill the gap, delivering prescriptions directly to patients. But online pharmacies cannot give vaccines, and not every medicine can be sent.
Additionally, some patients may not have access to the Internet. Even if they do, they may not trust online vendors, fearing that medication for high temperatures or childbirth may be harmful.
In some sectors, chain closures may open the door to more competition from local businesses. But the market situation in the pharmacy sector does not allow independent pharmacies to prosper.
Drug stores like Rite Aid face intense competition from online pharmacies and big box stores like Walmart and Target, which fill prescriptions.
But some say the biggest challenge for pharmacies comes from pharmacy benefit managers, or PBMs, who act as middlemen between different parts of the health care business, including insurance providers, drug companies and retailers.
PBMs are “a very, very powerful entity,” said Douglas Hoy, CEO of the National Association of Community Pharmacists. “They control drug prices, they control prescription drug payments,” he said, adding that the groups negotiate discounts and pay administrative fees. PBMs originally started in the 1960s as insurance claims administrators and have evolved over time to manage more of the health care business.
Business costs on the PBM side are squeezing margins and sometimes putting pharmacies in the red, Hoy said. And the impact on independents is disproportionate because a higher percentage of their business comes from prescription drugs compared to national chains, he said.
Pharmacy benefit managers argue that they can help lower drug prices by negotiating with drugmakers.
In September, the House Oversight and Accountability Committee heard testimony from benefits administrators that the groups were raising prices. During the hearing, said Jesse Scott, president and CEO of the Pharmaceutical Care Management Association, a trade group representing PBMs. They work with insurers to “maintain lower costs for prescription drugs and achieve better health outcomes.”
But elected officials are skeptical: The law was enacted to curb the power of PBMs, which lawmakers say are making drugs more expensive for consumers.
These dynamics mean less competition in the space is not good for independents, Hoy said. What it can do, he said, is burden already burdened pharmacists with new customers.
“I think we’re going to see more … unacceptable practices in pharmacy,” Hoy said.
Recently, pharmacy workers have been staging a walkout over working conditions they say put patients at risk. Some have said that focusing on vaccines will put them behind in filling prescriptions, create stress for staff and negatively impact patients who need the medicine.