The demise of pharmacies: How ‘bloated’ chains limit health care access

Walgreens announced this morning it's closing 1,200 locations

They are built on helping every person that walks through that door

That's why they got into business. I mean, that's why they got into pharmacy is to help patients. All three locations for Dick's Pharmacy will be shutting down

Pharmacists are the most accessible healthcare professionals in America. CVS Pharmacy will be closing 900 stores all over the country over the next three years

About one in three U.S. pharmacies have closed since 2010, according to research from USC and UC Berkeley

Closures are affecting big-name chains and independent providers who've served communities for generations

And the real losers in all of this are the customers who rely on them

If we keep closing these pharmacies, particularly in the rural areas, that accessibility to health care is going to suffer

Americans are losing access to the first line of health care, and we're going to break down the reasons why

We'll show you how industry consolidation led to closures, pharmacy benefit managers, and the fallout of pharmacy deserts

These pharmacies are still treating everybody as what Customers And they not taking the success of the customers personally and that what killing them Britton Ladd is a business strategy consultant with decades of experience The other problem that these pharmacy chains have is that they bloated

They have too many stores. They have too many residual businesses, the healthcare

businesses and so forth. National retail pharmacy chains have only gotten bigger over the decades

Walgreens started its growth campaign by purchasing a malted milkshake company owned by an employee back in 1922

Its merger with Alliance Boots, Europe's largest pharmaceutical wholesaler, made that growth international

Just this year, private equity firm Sycamore bought Walgreens for just shy of $10 billion with the intention of taking it private

Walgreens even tried to acquire Rite Aid, but regulators stopped that. By 1996, Rite Aid purchased enough regional pharmacies

to reach 4,000 locations. It continued gobbling up locations in 2007, buying 1,854 Brooks and Eckerd stores

and in 2020, it bought Seattle-based Bartell Drugs. CVS picked up 2 Revco drug stores in 1997 and took over Target pharmacy and health business in 2015 accounting for more than 1 stores Its growth strategy also involves owning an insurance

provider and a pharmacy benefit manager. Despite the size these companies are now

and the incredible amounts of money that is flowing through them, they're not making enough money to satisfy Wall Street. Wendell Potter is a former health

insurance executive turned health care reform advocate. Because of that, these companies have

to do even more to meet the expectations of those investors. And that means they're going to be

looking at the stores to close and they're going to be looking at accounts to get rid of

The traditional drugstore is split into two sections. There's the pharmacy that dispenses

prescription drugs and there's the front end that handles the retail, you know, when you buy snacks

toilet paper, or even over-the-counter medicines like Tylenol. And there are so many easier ways for the consumer to be able to get the pharmaceuticals they need

They can do it online. It's so easy to just go into a Target, into a Walmart or whatever

They just simply not been able to crack the code when it was related to retail A lot of pharmacy companies just are not very good at retail at all Consolidation in this space goes well beyond just buying up your competitors And that

where pharmacy benefit managers come in. That's right. I'm your insurance company's pharmacy

benefit manager. A pharmacy benefit manager is a middleman between a drug manufacturer and the

pharmacy and ultimately to the patient who needs the medication. The vertical integration has just really put kerosene on the fire

So the vertical integration was when the health insurance companies and the PBMs used to be

separate, but then they merged. You have the insurance company that owns the PBM, that owns the group purchasing organization

that owns the pharmacy, that owns the doctor. your competitor is deciding how much you get paid and also steering the patient into the pharmacy

that your competitor wants. Those are competitive disadvantages that are almost impossible to

overcome. These pharmacy benefit managers play a big role in America's drug stores

but how do they impact the everyday consumer? We'll dive into their role in part two of our

series, The Demise of American Pharmacies