Pharmacy Closure Contributors & Long-Term Consequences

Several pharmacy chains are experiencing closures. Can you elaborate on the main factors contributing to these closures, both for large chains and independent pharmacies?

I read that there are more than 7000 pharmacies have closed since 2019, and over half of them were independent pharmacies, which says, since there are way more chain pharmacies than independent pharmacies, independents are paying a much higher price for what, for what is going on. But some of the factors that that feed into this problem, one of them, the very first ones, is inflation has raised overhead for all of these stores. I mean, these are businesses, and all the independent pharmacies, of course, are often time family businesses, and one pharmacy is all they have some. There are some that are multi pharmacies, but basically, it's nothing like the chains. So increased overhead driven by inflation, increased labor inflation is worth being called out separately, because, as a consequence of inflation, the cost of getting help has gone up considerably. Theft is certainly a problem in urban environments, the cost just of trying to secure the goods that you're selling can be very consequential, and that's a factor.

Pharmacies are seeing competition for non-pharmacy items from big box stores and online sellers, and that's cutting into their sales, and that's actually where more profit is generated than in the pharmacy, in the prescription filling, part of the business economic pressure on consumers and their subsequent. And pullback, as I've said earlier, is a factor, especially in less affluent areas and, but by far the biggest factor is pressure by PBMs on reimbursement. They've been cutting back reimbursement for the products that the pharmacy dispenses for years now to the point where, by one authority, eight out of 10 pharmaceutical products that are sold in the pharmacy actually yield negative market margins that cost the pharmacy more to acquire the drug than they get back in reimbursement. So, you know, as I said earlier, you can't make a business on negative margins.

Beyond immediate access to medications, what are some potential long-term consequences for public health if these pharmacy closures continue? 

Well, it's a good question, and it would be great if public health authorities would take a look at not only the short term but the longer term view, because this is not a good thing for public health. I mean lacking access to a pharmacy means that people who take maintenance medications, for example, for complex conditions, are more likely to stop taking them, and people not taking their medications means that there are a lot of a lot more instances or episodes of acute problems because they're not taking their medications. You know, think things like blood sugar issues for diabetics who are not getting their insulin, as an example. So not only do you have more acute events, but you also have more longer term consequences, because the people that have these chronic conditions are not adequately treating their problems, and so those problems lead into longer chronic problems that that ultimately cost the health system even more.