The U.S. pharmacy industry is crumbling. Here’s how to fix it.
The U.S. pharmacy industry is crumbling. Here’s how to fix it.
By Robert Gebelhoff, Assistant editor and Opinions contributor
Washington Post
November 28, 2023
Canby Drug & Gifts, a pharmacy in rural Minnesota, is a paradox. It does good business, yet it is always on the verge of shutting down. “I’m one bad contract from closing,” says owner Mark Whittier. His drugstore, one of a few in his county of more than 9,000 people, exemplifies the struggle many independent pharmacies face. The store is a lifeline for customers, most of whom are on either Medicaid or the state’s health-insurance program. Yet profitability is now near-impossible because of the preposterous way the United States distributes pharmaceutical drugs. Without serious reforms, businesses such as Whittier’s could disappear. The tectonic plates beneath retail pharmaceuticals are shifting, and drugstores are falling. The total number of drugstores has been falling since 2015, but the trend has been particularly pronounced in rural areas, which have lost about 10 percent of their pharmacies in two decades. There are plenty of reasons for this: As for many other businesses, revenue for pharmacies cratered during the pandemic. Labor shortages, especially among pharmacists seeking better pay and working conditions, further strained operations. Meanwhile, online retailers provided new competition, and large opioid settlements have battered many chains. ... Mail-order services can help address the problem but can’t solve it. Retail shops are essential for immunizations, for example. And drugs coming through the mail come without face-to-face guidance from pharmacists on how to take them. Plus, not all drugs can be shipped; some must be refrigerated or not shaken. An elegant solution to these problems is to make it more profitable for pharmacies to serve low-income patients. This would require a heavy hand from the government. One way to do it: raise reimbursement rates for drugs covered by Medicaid or Medicare. States should also confront PBMs. These middlemen have concocted a devious way to profit from the byzantine drug system at the expense of pharmacies.