Opportunity? Yes! No. Maybe? | NCPA Executive Update | September 15, 2023

NCPA September 14, 2023

Dear Colleague,

Doug Hoey
Chain pharmacies in the United States are closing left and right, leaving Americans on both sides of the aisle looking for new pharmacies and independent pharmacies often scrambling to rescue these abandoned patients. It's unclear if this is an opportunity or threat for independent pharmacies. But one thing is clear: It's a wake-up call to the American public that having access to community pharmacies is in peril without PBM reform!

Rite Aid's rumored Chapter 11 bankruptcy filing may see as many as 400 of its 2,000 stores shuttered, according to news outlets. In addition to Rite Aid's struggles,

  • CVS announced it would be closing 10 percent of its pharmacies and is laying off 5,000 employees

  • Walgreens has closed several hundred of its stores and its CEO, Roz Brewer, recently resigned

  • WalMart asked its pharmacists to take a pay-cut by reducing the number of hours worked

  • Winn-Dixie is selling the files of its 400 pharmacies to CVS and Walgreens following being acquired by Aldi

This activity is what McKinsey researchers have called a phase of "rationalization," which followed all the acquisitions and consolidations between 2010 and 2020.

In Seattle, the last remaining 24-hour pharmacy, Bartell Drugs, purchased by Rite Aid in 2020, closed its doors for good this past Sunday, Sep. 10. On the closure, Jenny Arnold, CEO of Washington State Association of Pharmacists, told NBC affiliate KING-TV5, "Mail-order pharmacies aren't giving vaccines, they aren't doing important testing. We need pharmacies to keep communities safe," she said.

Does this constitute an opportunity for independents? Sort of.

As the chains close and there are fewer accessible healthcare providers, independents have a chance to fill the void. But not all new business is good business. Pharmacies will have to decide if they want to take on these abandoned patients if their prescription insurance pays below the pharmacy's cost. Or, PBMs may try to coerce patients into their mail order pharmacies. In the first case, community pharmacies might decide they can't afford new business (which sounds crazy to everyone outside of pharmacy). In the second case, they're boxed out (which sounds shady to everyone outside of pharmacy). It doesn't have to be this way.

PBM reform is essential before it's too late—not just for independent (and chain) pharmacies, but for patients who are caught in the crossfire. NCPA and its members are doing their part. We just concluded NCPA's second annual Month of Action, which connected legislators to pharmacists in real time and in-person—orchestrating 50 visits this year in 25 states, and an additional 64 visits in 2022 to make sure we could speak truth to power. What's more, NCPA's advocacy staff continue to actively meet with legislators and their staff about why PBM reform is imperative and Congressional support is imperative for the health of their constituents. The chains' high-profile difficulties underscore the message that the negative impact of PBMs is not just a "little guy" problem.

So, when we ask what it means to hear opportunity knocking—in this case taking care of patients seeking a new pharmacy—let's not just answer the door. Let's kick it down and defeat anticompetitive practices.


Doug Hoey

B. Douglas Hoey, Pharmacist, MBA

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