Pharmacy Closures Threaten Our Entire Public Health System

Key Takeaways

• COVID‑19 made pharmacies essential vaccination sites, then reverted to retail
• Chain closures create pharmacy deserts for 50‑60 million Americans
• Reimbursement tied to PBMs leaves pharmacies dispensing at a loss
• Deserts disproportionately impact Black, Latino, and rural neighborhoods
• Physician workload rises as pharmacists’ clinical tasks disappear

Pulse Analysis

During the pandemic, pharmacies were thrust into a public‑health role, administering vaccines, conducting tests, and serving as trusted community health hubs. This rapid expansion was not matched by a shift in their financial model; they continued to operate under retail‑centric reimbursement, where drug prices are set by pharmacy benefit managers (PBMs) rather than the pharmacies themselves. The result was a temporary surge in relevance that vanished as the emergency receded, leaving the same economic pressures that existed pre‑COVID.

The underlying economics have long been unsustainable. PBM contracts often reimburse pharmacies at rates below acquisition costs, forcing them to subsidize prescriptions with front‑store sales. As consumers migrated to online and big‑box retailers, those ancillary margins evaporated. Simultaneously, chains over‑expanded—CVS’s 2015 Target acquisition and Walgreens’ 2018 Rite Aid purchase created dense, redundant footprints. When profitability declined, corporate algorithms trimmed stores in low‑reimbursement zip codes, disproportionately affecting Black, Latino and rural neighborhoods and creating pharmacy deserts for tens of millions.

The clinical fallout is profound. Without a local pharmacist, patients lose real‑time medication safety checks, drug‑interaction alerts, and insurance navigation—services that previously reduced errors and physician workload. Physicians now absorb these tasks, increasing burnout and potentially compromising care quality. Policymakers must address the paradox by decoupling pharmacy reimbursement from PBM fees, incentivizing community‑based services, and supporting a sustainable business model that recognizes pharmacies as essential health infrastructure rather than mere retail outlets.