The Demise Of Pharmacies: How ‘bloated’ Chains Limit Health Care Access

Closures of American pharmacies person surged complete nan past decade and a half, taking a toll connected nan nation’s wellness attraction system. Consolidation wrong nan manufacture has weighed connected ample unit chains arsenic large players person amassed thousands of locations passim nan country.

This is portion 1 of a three-part bid connected struggles wrong American pharmacies and nan effect those struggles person connected entree to wellness care. 

Roughly 30% of U.S. pharmacies closed from 2010-2020, according to researchers from nan University of Southern California and UC Berkeley. A study published astatine nan extremity of 2024 recovered closures had accelerated astatine nan extremity of nan decade, contributing to a nett nonaccomplishment successful nan full number of pharmacies. 

‘Bloated’ nationalist drugstore chains

“The problem that these drugstore chains person is that they’re bloated,” proviso concatenation and business strategy advisor Brittain Ladd told Straight Arrow News. “They person excessively galore stores, they person excessively galore residual businesses, wellness attraction businesses and truthful forth.”

National unit chains person grown complete nan decades. Acquisitions were an early portion of Walgreens’ strategy. It started its maturation run by buying a malted milkshake company owned by an worker successful 1922. More recently, it completed a two-step merger pinch Alliance Boots, nan largest pharmaceutical wholesaler successful Europe.

This year, backstage equity patient Sycamore agreed to buy nan company for $10 cardinal pinch plans to return it private. Walgreens attempted to get Rite Aid, but regulators stopped nan acquisition.

Rite Aid itself amassed enough location pharmacies to scope 4,000 locations by 1996. It continued its acquisition run by buying 1,854 Brooks and Eckerd stores successful 2007. Rite Aid besides bought Seattle-based Bartel Drugs successful 2020. The institution past filed for bankruptcy successful 2023.

In 1997, CVS started increasing aft it added 2,500 Revco Discount Drug Stores. In 2015, it took complete Target’s drugstore and wellness business astatine 1,600 locations. CVS’ maturation strategy yet progressive buying an security provider and pharmacy use manager. 

“These pharmacies are still treating everybody arsenic customers, and they’re not taking nan occurrence of nan customers personally, and that’s what’s sidesplitting them,” Ladd added. 

“Despite nan size these companies are now, and nan unthinkable amounts of money that is flowing done them, they’re not making capable money to fulfill Wall Street,” erstwhile wellness security executive Wendell Potter told Straight Arrow News. “Because of that, these companies person to do moreover much to meet nan expectations of those investors. And that intends they’re going to beryllium looking astatine those stores to adjacent there, and they’re going to beryllium looking astatine accounts to get free of.”

Retail struggles

Most U.S. supplier stores are divided into 2 sections. The drugstore dispenses medicine drugs, while nan beforehand extremity handles nan retail operations of convenience items and over-the-counter medicines. 

“They’ve conscionable simply not been capable to ace nan codification erstwhile it was related to retail,” Ladd said of brick-and-mortar concatenation drugstore struggles. “A batch of drugstore companies conscionable are not very bully astatine unit astatine all.”

Industry advocates pass that if stores proceed to close, it will person a awesome effect connected nan accessibility of wellness care.

“Pharmacists are nan astir accessible wellness attraction professionals successful America,” Rep. Buddy Carter, R-Ga., who is simply a pharmacist by trade, told Straight Arrow News. “But if we support closing these pharmacies, peculiarly successful nan agrarian areas, that accessibility to wellness attraction is going to suffer.”

Consolidation successful nan manufacture goes good beyond expanding nan number of stores. In nan 2nd portion of this series, Straight Arrow News digs into really consolidation wrong security providers has fixed emergence to drugstore use managers.