Are Retail Pharmacies and Pharmacists Becoming Endangered?

The retail world of pharmaceutical drugs is being shaken up like never before.

According to TheStreet, CVS Health stated in late 2021 that it will "reduce store density in certain locations and close approximately 300 stores a year for the next three years." Closing store locations that no longer make sense for the company might be beneficial for CVS in the long term when it comes to reducing operational costs and paying employees, but 900 is a lot of stores to close.

The company’s statement about this initiative explained that CVS “has been evaluating changes in population, consumer buying patterns and future health needs to ensure it has the right kinds of stores in the right locations for consumers and for the business.”

CVS has not released a detailed forecast of the locations being affected, but so far this year there have already been store closures in:

• Nebraska
• Iowa
• Florida
• Missouri
• Virginia
• California
• New York

Now, Rite Aid is following suit, but its intentions are even more dire and clear. According to TheStreet, the company “has been reportedly toying with the possibility of filing Chapter 11 bankruptcy and liquidating many of its stores. It currently has some $3.3 billion in debt. The proposed deal would permanently shutter 400 to 500 of the chain's current 2,100 stores and hand them over to creditors or other interested buyers.”

Beginning with a location in Berkeley, California, Daily Mail added that Walgreens has also recently announced plans to close 150 of its stores “as part of a cost-saving strategy.” The rest of its remaining stores are receiving upgrades to move the brand forward.

Combined, that’s at least 1,550 retail drug stores being closed across America.

This initial exodus is believed to be a result of how “more shoppers are turning to buying online in the wake of the pandemic, as well as rocketing levels of shoplifting affecting sales in stores.” And after these store closures, online purchases might be heavily relied upon for those who need regular medications but find their local retail drug store gone.

Yet, even as times are shifting, “retail chains remain the most popular type of primary retail pharmacy, with 47 percent of respondents selecting it. However, the likelihood of respondents reporting a retail chain as their primary pharmacy decreased as the number of monthly medications increased,” according to a survey by McKinsey.

Over the last decade and a half, several online pharmacies that operate independently from PBMs have emerged, amassing over $3 billion in financial backing so far. Simultaneously, established entities like retail chains are diversifying their offerings by incorporating a mix of in-store, online, and mail services. Take Walgreens, for instance — it not only operates a mail-order pharmacy system but also boasts same-day delivery from a vast network of 8,000 locations and allows customers to handle prescription orders via its mobile app.

One last aspect to consider is the fact that Walmart has been “asking some of its 16,000 pharmacists across the U.S. to voluntarily take pay cuts by reducing their working hours in a bid to lower costs,” Reuters reported. Additionally, the retailer “scaled back the operating hours of its pharmacies by two hours at more than 4,500 U.S. stores, amid a shortage of pharmacists and pharmacy technicians that began during the pandemic.”

Walmart’s moves might be necessitated by the company settling a national opioid lawsuit for $3.1 billion, facing challenges from insufficient pharmacy technicians, and experiencing sales losses from a weight-loss medication.

According to Reuters, Walmart attributed the hourly cuts to “a dropoff in demand for drugs during the summer and requests from pharmacists for a better work-life balance.”

Regardless, the retail pharmacy industry is being impacted by these closures, with a huge amount of jobs being affected. Employees might find themselves jobless if their retail location closes, and a Walmart “pharmacist could go from an 80-hour, two-week pay period to one lasting 64 or 72 hours.”

Pharmacists have expressed concerns over increasing work pressures, as indicated by discussions on Facebook and various independent forums popular among Walmart workers. They emphasize that, despite facing staff reductions and limited work hours, they are expected to process the same number of prescriptions.