Pharmacy deserts appear across U.S. as drug stores closures spread

Recent Lebanon, Ohio, population 3,756, has three dollar stores, a Groceryland food market, a couple of fast-food restaurants, a public library branch, and a spirit-filled school system. What it doesn’t have is a pharmacy.

As a part of Rite Aid’s bankruptcy filing in October 2023, the chain announced it was closing 800 stores, with Ohio especially hard hit, at 180 closings slated largely in struggling small towns or Rust Belt cities. In keeping with Rite Aid’s website, the chain currently has 1,700 locations, down from the two,111 reported on the time of bankruptcy. The corporate has stated it’ll emerge from bankruptcy with about 1,300 stores.

Recent Lebanon’s Rite Aid closed in September.

“My community needs a pharmacist. It’s concerning to me that the residents do not have one here,” said Recent Lebanon Mayor David Nickerson.

Some smaller towns near Recent Lebanon have their very own pharmacies, but even those are a 15-minute drive away. Recent Lebanon’s Rite Aid prescriptions were transferred to a Walgreens half-hour away in Dayton.

Nickerson, who was just elected last yr and has a military background, recently found himself walking the Walgreens parking zone in Dayton. He even strolled across the back of the constructing at night, doing an intensive inspection to inform his constituents he had done his due diligence and made sure it was a protected place to go. But even coming away convinced that Walgreens was protected and clean won’t be enough for a few of Recent Lebanon’s residents.

“Now we have many elderly residents who’re uncomfortable going that far with the traffic and unknown area,” Nickerson said.

Getting a prescription filled in Recent Lebanon, which sits on a busy thoroughfare resulting in Dayton, wasn’t at all times so difficult.

“Before we moved to Recent Lebanon two years ago, there have been three pharmacies,” said Joyce Dingman. “Last yr Recent Lebanon’s CVS closed, and now Rite Aid is closing, leaving us with none.” 

She and her husband will head to a town half-hour away to get prescriptions filled at a Kroger pharmacy.

 A spokesman for Rite Aid confirmed the outsized impact the closings are having on Ohio.

“Nearly all our stores in Ohio will probably be closing by the tip of September as part of our recent Chapter 11 process to create a stronger, healthier company,” the spokesman said, adding that there would only be 4 Rite Aids remaining in Ohio. There have been over 140 before the most recent round of closures.

Recent Lebanon, though, is hardly alone in its struggle to carry on to a pharmacy.  Experts say the retail pharmacy model has been squeezed by complicated and sometimes lower reimbursement rates for medication while competition for sales of candy and paper towels, items that used to pad profits, has grown more fierce.   

The pharmacy squeeze

At a time when the federal government is suing the first drug market’s middlemen, the pharmacy profit managers — with the Federal Trade Commission alleging inflated prices on drugs like insulin — some are pointing the finger on the PBMs for the pharmacy deserts.

Miranda Rochol, senior vice chairman of provider solutions at healthcare technology company Prescryptive Health — who worked her way up within the business, starting as a pharmacy technician before moving to Walgreens health technology team — says the PBMs are largely in charge for the present problems within the industry. “PBMs can steer patients into their very own pharmacies, drive profit to their pharmacies, and under-pay community pharmacies,” she said.

In June, the FTC issued a scathing report about PBMs and the “squeezing” of Primary Street pharmacies brought on by a long time of mergers and acquisitions. In keeping with the FTC, the three largest PBMs control nearly 80% of all prescriptions filled in america, negotiating the terms and conditions for access to pharmaceuticals for lots of of thousands and thousands of Americans. The report blames falling reimbursement rates from PBMs for most of the financial troubles of smaller pharmacies.

“So long as the massive three PBMs go unchecked, more pharmacy deserts will appear,” Rochol said.

The three largest PBMs are CVS‘s Caremark, OptumRX (a part of UnitedHealth), and Express Scripts, owned by Cigna.

A spokesperson for Express Scripts pointed to its lawsuit filed against the FTC in response to the report, calling it unfair, biased, erroneous, and defamatory, and claims the report ” wrongly concluded that PBMs inflate drug costs and harm independent pharmacies.”

Tim Wentworth, Walgreens Boots Alliance CEO — who was CEO of Express Scripts from 2016–2021 — addressed PBMs in Walgreens’ third quarter earnings call, saying the corporate was “in lively discussions with our PBM and payer partners to align incentives and ensure we’re paid fairly.”

Walgreens has announced that it may close as many as 25 percent of its 8,200 stores, which is able to further squeeze communities that lack pharmacies. A spokesman for Walgreens identified that while they could be large in size, they’re still “independent” — unaffiliated with a PBM — in order that they face most of the same price pressures as smaller stores.

CVS has also closed stores, and for its part, a CVS Caremark spokesman disputes claims that it’s economically squeezing smaller pharmacies, citing Georgia for instance. Between 2023 and 2024, independent pharmacies within the CVS Caremark pharmacy network were reimbursed 67.5% higher on average than CVS Pharmacy locations, and 51.9% higher than other chain pharmacies within the state. 

“Local, independently owned pharmacies function vital partners in CVS Caremark pharmacy networks, representing greater than 40% percent of our in-network pharmacies,” the spokesman said. “CVS Caremark reimburses independent pharmacies substantially more, in aggregate, than chain pharmacies.”

The CVS spokesman also said that CVS pharmacies will not be all serviced by Caremark, working with over 70 different PBMs. None of CVS’s closings, the spokesman said, were related to PBM issues, but resulting from changes in consumer buying patterns and population shifts.

“Claiming that PBMs are under-reimbursing independent pharmacies will not be based on the actual fact. Research in reality shows that PBMs are reimbursing independent pharmacies at higher amounts than chain pharmacies,” said Greg Lopes, spokesman for the Pharmaceutical Care Management Association, the national trade group representing PBMs. “There are unfortunately many aspects for pharmacy closures in rural areas, including population declines and the growing use of online pharmacies.”

Data from the National Community Pharmacists Association illustrates the priority over PBM pricing.

Just about all pharmacies (99%) have experienced a discount within the reimbursed dollar amount of prescribed medications at the purpose of sale. Greater than half say that insurance policy and their PBMs are reimbursing pharmacies lower than the price to buy the drug for no less than three of each 10 prescriptions they fill.

The National Association of Chain Drug Stores is pressing for PBM reform laws. “The U.S. Congress has done the exertions to get bipartisan pharmacy profit manager (PBM) reform able to go, and that’s ‘must-pass laws’ before the 118th Congress adjourns,” said Steven C. Anderson, president and CEO of NACDS.

CVS pulled out of NACDS in 2022 amid the trade association’s support of PBM reform.

The vital role of the local pharmacist in Amazon era

In keeping with experts, PBMs, are only one in every of many reasons retail pharmacies are struggling.

With the neighborhood pharmacy’s demise, patients need to get more creative in getting their medicines. Dr. Colin Banas, chief medical officer of health-care solutions company DrFirst, says there are numerous other ways for patients to get medicine if their neighborhood pharmacy closes.

“For urgent medications, if patients cannot drive to an available pharmacy, they could explore prescription pickup and delivery services offered by ride-share services similar to Uber and Lyft,” Banas said.

He added that it is also value checking with local hospitals to see in the event that they have in-house pharmacies that may dispense prescriptions. “Even some doctors’ offices and urgent care centers stock certain medications, so it’s value making a couple of calls,” Banas said. 

But Banas believes the pharmacy deserts will only grow, and result in a rise the variety of apps and digitization.

“As pharmacy deserts develop into more common, patients should control recent apps and digital tools that may increasingly begin to fill a number of the gaps,” Banas said.

This week, Amazon announced that its same-day prescription delivery would expand to roughly half the U.S. next yr.

Patient advocates say that technology cannot replace humanity.

All of the give attention to PBMs, reimbursements, and profits misses the human features of the career, says Dr. Tamera Hughes, an assistant professor at High Point University’s School of Pharmacy who spent several years working at a community pharmacy in Georgia in the course of the last decade before entering academia.

Hughes says PBM business models do prefer to shuttle people more towards medication by mail, but what could also be gained in short-term savings is lost in the worth of the pharmacist-patient relationship.

“Medication delivery takes away the engagement and rapport that pharmacists construct inside the communities they serve,” Hughes said.

During her time working at a pharmacy, she got to know her regulars, their needs, and their ailments. “I knew all my customers by name; I asked about their holidays and grandchildren. By removing that one-on-one upfront engagement with the communities they serve, you strip away what it means to holistically have a look at another person’s health,” Hughes said. “Pharmacists will not be just shelling out the medication, but a number of the other lifestyle things that produce a healthy individual, and pharmacies have been great historically doing it.”

The truth is, Hughes says that a pharmacist often serves as a de facto doctor for somebody who cannot afford a visit.

“People would come to the pharmacy counter to choose up a prescription, while one other two to 3 people would come to pharmacy because their child is sick and say to the pharmacist ‘What are you able to recommend for a sore throat or a cough?’ … A minimum of five times an hour, I walked from behind the counter to help someone in picking out medication for his or her children, and we’re in a position to ask inquiries to get them one of the best over-the-counter medicine,” Hughes said.

Pharmacies are being squeezed from all directions — by rising PBMS costs, competition from online pharmacies like Amazon, and retail competitors like dollar stores — but Hughes says by serving as a primary defense against illness, neighborhood pharmacists can save greater strain on the larger health system. With the drug store chains like Rite-Aid closing lots of of retail locations, that line of defense is being lost.

A spokesman for Rite Aid said the closings were the results of attempting to create a more “efficient company.”   

In Recent Lebanon, city officials and the mayor just want their pharmacy back. Acting village manager Rob Anderson says it’s an actual inconvenience for some residents, and the Rite Aid closing served as a blow to the town.

“Having Rite Aid leave makes it appear to be your town is on a negative path when, in point of fact, Recent Lebanon’s doing is just effective,” Anderson said.  “Nevertheless it makes you’re thinking that the massive corporations don’t value your town like they once did.”