One in three retail pharmacies closed between 2010 and 2021, and patients of color may be feeling the effects of the trend more, according to a new study published on December 3 in medical journal Health Affairs.
The research out of University of California (UC) Berkeley, Johns Hopkins University, and the University of Southern California (USC) found in particular one notable trend: Unlike 2010 to 2018, when the number of openings was consistently higher than closures, more pharmacies closed than opened from 2018 to 2021, representing a 2.1% decline and suggesting an influx of retail pharmacies shuttering across the US.
In fact, 2018 was the start of declines in retail pharmacy. Between 2018 and 2021, pharmacy numbers declined in 41 states, with about one-third of counties (32.1%, or 1,009) reporting a net drop, impacting 91.6 million consumers. Meanwhile, retail pharmacy chains got $7.5+ billion in government funding for doling out vaccines during the Covid-19 pandemic, biotech research firm Drug Channels Institute reported in 2022.
The researchers used data from the National Council for Prescription Drug Programs’s dataQ database and the US Census Bureau to analyze 88,930 pharmacies across the US.
Disparities in the data. From 2010 to 2021, the researchers found communities of color were hit hardest by closures, with predominantly Black and Hispanic neighborhoods facing closure rates of 37.5% and 35.6%, respectively, compared to 27.7% in mostly white areas.
Black neighborhoods made up 6.1% of the pharmacies included in the study, along with Hispanic areas at 9.2% and white communities at 68.5%.
A 2021 study out of USC asserted that Black and Latino communities have less access to pharmacies in cities than white populations, which can make it harder for patients to access medication and care.
“Our findings suggest that closures may widen health disparities in access to prescription and other essential pharmacy services, such as vaccinations and pharmacist-prescribed regimens,” Jenny Guadamuz, an author of the December study and assistant professor at the UC Berkeley School of Public Health, said in a release.
For example, Covid-19 vaccination rates in Chicago were lower in places with mostly Black and low-income residents compared to wealthier and whiter areas of the city, according to a March study out of the University of Chicago and the University of Illinois at Urbana-Champaign.
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What caused it? The “most important finding” from the research, according to Rajiv Leventhal, senior analyst of digital health research company eMarketer, was that the risk of closure was shown to be nearly twice as high for independent pharmacies (38.9% closure rate, or 34,594) compared to chains (21.9% closure rate, or 19,476).
“That’s primarily because of declining reimbursement rates from pharmacy benefit managers (PBMs) to smaller community pharmacies. PBMs are known to steer patients to their own in-network pharmacies, with many independent drugstores left behind. In some cases, it costs more for an independent pharmacy to stock a medication than what the PBM pays them to dispense it,” he said in an emailed statement.
The Federal Trade Commission (FTC) in July published a report, and subsequently sued the three biggest PBMs in the US earlier this year, claiming they were raising drug prices. The agency asserted that PBM practices were harder on local pharmacies compared to bigger chains like CVS and Walgreens while noting 10% of independent retail pharmacies in rural areas closed between 2013 and 2022, per its report.
That’s in addition to a new Centers for Medicare and Medicaid Services rule that could lower reimbursements for prescriptions at smaller pharmacies, leaving about one-third (260) of independent pharmacies at risk of closing, Healthcare Brew previously reported.
Ongoing access. Leventhal said he was concerned retail pharmacy challenges would threaten access to medication, especially to underserved patients, citing a new study from Wolters Kluwer Health that reported 59% (589) of patients said they were “very concerned” or “somewhat concerned” that they can’t access their medications due to nearby pharmacy closures.
“Pharmacies must ramp up their digital offerings to let more consumers manage and order their prescriptions online. Speedy, low-cost medication delivery will become table stakes,” he said.