The results of a study published October 21 in JAMA Internal Medicine found that despite an overall increase in the number of pharmacies in the U.S. from 2009 to 2015, one in eight pharmacies, or 9,654, had closed during this period.
Specifically, 9,654 pharmacies closed from 2009 to 2015. Independent pharmacies in both cities and rural areas were three times more likely to close than chain pharmacies.
Fast forward to today’s market, and we continue to see numerous pharmacy closings due to the growth of specialty pharmaceuticals and related rising drug prices, declining generic drugs profits and consolidation among drug chains, drug distributors and pharmaceutical manufacturers. Reduced government reimbursements and direct and indirect remuneration (DIR) fees have also played a role.
Recent examples of pharmacy closures range from the national chains to the independent mom and pop pharmacies.
Walgreens recently disclosed it will close 200 U.S. stores as it aims to cut $1.5 billion in annual costs by 2022. CVS Health announced that it had decided to close 46 underperforming stores.
HealthPartners, the largest consumer-governed, non-profit health care organization in the nation. announced plans to close its retail pharmacies in early 2020. The closure includes 30 retail pharmacies, as well as the organization’s owned mail-order pharmacy operations. HealthPartners will continue to operate its specialty, infusion and hospital pharmacies, as well as health plan pharmacy management and medication therapy management services.
Raley’s, which owns and operates 129 grocery stores in California and Nevada, announced plans to close a portion of the company’s pharmacies. The company will transfer prescriptions from 27 Raley’s, Bel Air and Nob Hill pharmacies to a combination of Walgreens, CVS Pharmacy and Rite Aid locations. Raley’s will continue to operate 69 pharmacies located across California and Nevada.
Eugene, Oregon-based Bi-Mart will close all pharmacies in its stores in the Portland metropolitan area, saying they are no longer profitable. The company has 79 stores in Idaho, Oregon and Washington.
Maximart Pharmacy, one of the few remaining independent pharmacies in Palo Alto, CA, is closing its doors at after serving the city’s residents for more than four decades.
Takeaway: The market will continue to see pharmacies close as the industry struggles to develop innovative ways to reach the consumer, such as CVS HealthHubs, Walgreens Feel More Like You and Walmart Health Centers.