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How pharmacy deserts form
In recent years, several factors, including reimbursement challenges, rising costs, changing consumer behavior, and staff shortages, have forced many pharmacies to close, further worsening access to pharmacy services.
Pharmacy closures can lead to a rise of pharmacy deserts, meaning that there is no retail pharmacy within one mile (in urban areas), two miles (in suburban areas), or 10 miles (in rural areas) from an individual household. Households located in pharmacy deserts must travel further to get prescriptions, vaccines, screenings, and other necessary services inherent for healthy communities [1].
Pharmacy closures can lead to a rise of pharmacy deserts, meaning that there is no retail pharmacy within one mile (in urban areas), two miles (in suburban areas), or 10 miles (in rural areas) from an individual household. Households located in pharmacy deserts must travel further to get prescriptions, vaccines, screenings, and other necessary services inherent for healthy communities [1].
Factors that impact pharmacy closures
Reimbursement
Lowering reimbursement rates significantly contributes to increased pharmacy closures. In 2022, nearly 94% of sales for independents derived from the prescription department, making reimbursement a pivotal part of success and profitability for the independent pharmacy business and the pharmacy sector at large [2]. Additionally, a 2019 study found that between 2009 and 2015, 1 in 8 operating pharmacies had closed, disproportionately affecting independent pharmacies and low-income communities [3].
Rising costs
Sliding revenue and rising expenses are driving forces in pharmacy closures. For years, reimbursement rates for filling most prescriptions have shrunk while costs continue to climb, and according to AP News, it can take new pharmacy locations up to three years to build a customer base and break even. This is challenging when customers are also less reliant on drugstores now than in decades past [4].
Consumer behavior
As the rate of pharmacy closures continues to rise, so does the trend of consumers shopping for their retail and over-the-counter products online and choosing convenience first. According to a research study conducted by Cencora, 36% of shoppers said they do not currently buy products from an independent pharmacy and 37.8% of pharmacy shoppers said convenience was their lead driver. This shift impacts not only front-end sales, but also overall foot traffic leading to further erosion of pharmacies’ retail revenue and some prescription sales [5].
Staff shortages
The pharmacy sector is not immune to labor shortages. In fact, pharmacists, technicians, and support staff claim that increased demands on understaffed teams have become untenable and impede their ability to do their jobs, putting pharmacies at increased risk for closure [6]. According to NCPA, 25% of neighborhoods in the U.S. are pharmacy shortage areas. This reiterates that pharmacies are a key factor in both losing and maintaining access to healthcare in rural, suburban, and urban communities [7].
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Patient access
The upward trend of pharmacy closures inherently affects both providers and patients. For patients, it can lead to pharmacy deserts for those most reliant on a pharmacy for medication adherence and ongoing chronic illness. With access to fewer patients who may live in their community due to limited networks, independents may not have the opportunity to serve the volume of patients and business to keep their doors open [8].
How Cencora is part of the solution
We work together with our partners to improve access and accelerate positive outcomes in healthcare.
- Advocacy for fair reimbursement
- Meaningful investments, both financial and intellectual, to support communities and partners
- Data and insights to inform tailored solutions that can impact access to care
References
[1] Anderson, Maia. How pharmacy deserts are formed. Healthcare Brew. 15 Mar 2023. Accessed 7 Aug 2024. Available at: https://www.healthcarebrew.com/stories/2023/03/15/how-pharmacy-deserts-are-formed .
[2] The 2023 NCPA Digest sponsored by Cardinal Health (“NCPA Digest”). National Community Pharmacists Association. The Voice of the Community Pharmacists®. Accessed 8 August 2024. Available at: https://www.cardinalhealth.com/content/dam/corp/web/documents/Report/cardinal-health-2023-ncpa-digest.pdf .
[3] Fink III, Joseph L. et al. Pharmacy Closures Spark Need for PBM Reform. Pharmacy Times. 24 May 2024. Accessed 8 Aug 2024. Available at: https://www.pharmacytimes.com/view/pharmacy-closures-spark-need-for-pbm-reform .
[4] Murphy, Tom and Kasturi Pananjady. As pharmacies shutter, some Western states, Black and Latino communities are left behind. AP News. 3 June 2024. Accessed on 8 Aug 2024. Available at: https://apnews.com/article/pharmacy-closure-drugstore-cvs-walgreens-rite-aid-91967f18c0c059415b98fcf67ad0f84e .
[5] Internal data from Cencora’s 2023 Voice of Consumer Research study with 3,007 participants
[6] The 2023 NCPA Digest sponsored by Cardinal Health (“NCPA Digest”). National Community Pharmacists Association The Voice of the Community Pharmacists®. Accessed 8 August 2024. Available at: https://www.cardinalhealth.com/content/dam/corp/web/documents/Report/cardinal-health-2023-ncpa-digest.pdf .
[7] Gregg, Aaron and Jaclyn Peiser. Drugstore closures are leaving millions without easy access to a pharmacy. The Washington Post. 22 Oct 2023. Accessed on 8 Aug 2024. Available at: https://www.washingtonpost.com/business/2023/10/22/drugstore-close-pharmacy-deserts .
[8] Qato, Dima M, et al. Association Between Pharmacy Closures and Adherence to Cardiovascular Medications Among Older US Adults. JAMA Network Open. 19 Aug 2019. Accessed 7 Aug 2024. Available at: https://jamanetwork.com/journals/jamanetworkopen/fullarticle/2730785 .
[1] Anderson, Maia. How pharmacy deserts are formed. Healthcare Brew. 15 Mar 2023. Accessed 7 Aug 2024. Available at: https://www.healthcarebrew.com/stories/2023/03/15/how-pharmacy-deserts-are-formed .
[2] The 2023 NCPA Digest sponsored by Cardinal Health (“NCPA Digest”). National Community Pharmacists Association. The Voice of the Community Pharmacists®. Accessed 8 August 2024. Available at: https://www.cardinalhealth.com/content/dam/corp/web/documents/Report/cardinal-health-2023-ncpa-digest.pdf .
[3] Fink III, Joseph L. et al. Pharmacy Closures Spark Need for PBM Reform. Pharmacy Times. 24 May 2024. Accessed 8 Aug 2024. Available at: https://www.pharmacytimes.com/view/pharmacy-closures-spark-need-for-pbm-reform .
[4] Murphy, Tom and Kasturi Pananjady. As pharmacies shutter, some Western states, Black and Latino communities are left behind. AP News. 3 June 2024. Accessed on 8 Aug 2024. Available at: https://apnews.com/article/pharmacy-closure-drugstore-cvs-walgreens-rite-aid-91967f18c0c059415b98fcf67ad0f84e .
[5] Internal data from Cencora’s 2023 Voice of Consumer Research study with 3,007 participants
[6] The 2023 NCPA Digest sponsored by Cardinal Health (“NCPA Digest”). National Community Pharmacists Association The Voice of the Community Pharmacists®. Accessed 8 August 2024. Available at: https://www.cardinalhealth.com/content/dam/corp/web/documents/Report/cardinal-health-2023-ncpa-digest.pdf .
[7] Gregg, Aaron and Jaclyn Peiser. Drugstore closures are leaving millions without easy access to a pharmacy. The Washington Post. 22 Oct 2023. Accessed on 8 Aug 2024. Available at: https://www.washingtonpost.com/business/2023/10/22/drugstore-close-pharmacy-deserts .
[8] Qato, Dima M, et al. Association Between Pharmacy Closures and Adherence to Cardiovascular Medications Among Older US Adults. JAMA Network Open. 19 Aug 2019. Accessed 7 Aug 2024. Available at: https://jamanetwork.com/journals/jamanetworkopen/fullarticle/2730785 .
