Rural pharmacies have been forced into closure for years; now bigger chains are shuttering stores - Entrepreneur Generations

A Walgreens pharmacy in Murphy, North Carolina,
pop. 1,600. (Wikipedia photo)

 

Over the past decade, rural, independent pharmacies faced shrinking profits and many closed. But now, even big chains are struggling to keep the current drugstore model profitable, reports Nathaniel Meyersohn of CNN News. "CVS is closing 900 stores. Walgreens announced it plans to close 1,200 stores, meaning 1 in 7 will disappear. . . .They are now shutting down because of shifting consumer habits, competition and changes in the pharmacy industry."

Both independent and larger drugstore chains blame some of their financial decline on pharmacy benefit managers, or PBMs, which negotiate rebates from drug manufacturers to insurers. "PBMs have been cutting reimbursement rates to boost their own profits, Elizabeth Anderson, an analyst at Evercore IRI," told CNN. "The pharmacy industry has complained that PBMs have too much control and can squeeze pharmacies. PBMs argue that they help keep drug prices down by negotiating with drug makers."

Walgreens added primary care clinics to try and bolster its bottom line, but the venture was unsuccessful. "Walgreens took a $5.2 billion stake in VillageMD, a primary care network, in 2021. But VillageMD has not been profitable for Walgreens, and Walgreens has tried to cut costs," Meyersohn writes. "The chain has been closing VillageMD locations and said over the summer it will divest from the company."

When the past 20 years of pharmacy availability for Americans is scrutinized, rural residents usually end up with fewer options and a longer drive for medication treatment, but the same can be true for poorer neighborhoods. Meyersohn reports, "Roughly one out of every eight pharmacies closed between 2009 and 2015, which disproportionately affected independent pharmacies and low-income neighborhoods, according to a study published in the Journal of the American Medical Association."

from The Rural Blog https://ift.tt/OlMuIGf Rural pharmacies have been forced into closure for years; now bigger chains are shuttering stores - Entrepreneur Generations

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