Dive Brief:
- About one in three retail pharmacies in the U.S. have closed their doors since 2010, according to a study published Tuesday in Health Affairs.
- Pharmacies shut down at higher rates in predominantly Black and Latino neighborhoods, as well as in communities with more uninsured or publicly insured residents.
- Independent pharmacies were also at higher risk of closure, possibly because pharmacy benefit managers — middlemen in the drug supply chain — steered patients toward their own pharmacy networks, according to the research.
Dive Insight:
The study, which analyzed closures between 2010 and 2021, found new pharmacy openings outpaced shutdowns for most of the 2010s. But closures later began to accelerate as the industry consolidated, combining large pharmacy chains with major PBMs, according to the study.
From 2018 to 2021, the research tracked a net 2.1% loss in pharmacies. The decline was largely due to a decrease in the number of chain pharmacies, which fell 5% during this three-year period.
Independent pharmacies were also hit by the vertical consolidation of major pharmacies and PBMs. Overall, the risk of closure was more than twice as high for independent pharmacies compared with their chain counterparts, according to the study.
Insurers incentivize their members to use preferred pharmacy networks managed by PBMs by offering reduced cost-sharing. But independent pharmacies are more frequently excluded from these networks, which could be a “key factor” increasing their risk of closure, said study author Jenny Guadamuz, an assistant professor at the University of California Berkeley School of Public Health, in a statement.
Independent pharmacy closures could disproportionately harm neighborhoods with more Black, Latino and low-income residents. They’re nearly two times more likely than chain pharmacies to be located in communities with high rates of uninsurance. Independent pharmacies are also more than two times more likely to be the only pharmacy in the neighborhood, according to the study.
These shutdowns could worsen racial disparities in prescription access, as well as use of essential healthcare services like vaccinations and contraceptives, the researchers wrote.
“Without safeguarding pharmacies in marginalized neighborhoods, expanding health care services at pharmacies may enhance convenience for more affluent populations while failing to address the health needs of communities disproportionately affected by pharmacy closures, particularly Black and Brown populations in low-income urban areas,” Guadamuz said in a statement.
PBMs have recently received significant criticism from federal regulators and lawmakers over their role in driving up medication costs and potentially harming independent pharmacies.
This summer, the Federal Trade Commission published a report arguing the nation’s largest PBMs — including CVS Caremark, Cigna’s Express Scripts and UnitedHealth’s Optum Rx — have enough market power to force independent pharmacies to accept arbitrary and unfair contracts.
