Understanding Pharmacy Deserts: How Can We Impact This Growing Trend?

When a community loses a pharmacy, it loses a trusted health care provider. Understanding the root causes of these closures—and what we can do about it—can drive change.

Nearly a third of independent pharmacy owners may close their stores in 2024, according to an NCPA survey.1,2 Just take my home state of Oregon as an example: A recent report by the Associated Press found that 36 stores in Oregon closed last year, with the state second only to Alaska in terms of limited pharmacy access.

In a geospatial survey conducted by Wittenauer et al, investigators found that nearly 16 million people live in “pharmacy deserts” in rural and urban settings all over the country, and the recent spate of closings in both community and chain pharmacies will surely impact these numbers further. The most urgent issue to improve this pharmacy ecosystem now is working to make sure pharmacies are reimbursed correctly and transparently.

Pharmacy Reimbursement
The FTC’s interim report on pharmacy benefit managers (PBMs), helped shine a light on the business practices of these middlemen that are impacting everyone, including patients, employers, payers, and pharmacies.5 Included in the report were early findings on how PBMs “may be steering patients to their affiliated pharmacies and away from smaller, independent pharmacies.”

Furthermore, large PBMs are vertically integrated with health care entities, sometimes with their own mail order or pharmacy businesses.6 By steering patients to their own pharmacies, PBMs can “retain high levels of dispensing revenue,” with one anecdote in the FTC report pointing out “nearly $1.6 billion in excess revenue on just 2 cancer drugs in under 3 years.” Steering isn’t the only issue—there’s also the PBM practice of adding margin to the price they pay the pharmacy vs what they charge the health plans and patients, a practice known as spread pricing.7 The PBM keeps the spread while raising drug prices, and any savings comes out of the pockets of pharmacy owners and patients. And we haven’t even addressed DIR clawbacks in this mix.

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