Wondering why your hometown drugstore suddenly closed or why your local pharmacist seems more frazzled than ever? You’re not alone–the grim reality of what’s happening behind the counter reveals that it goes way beyond counting pills and filling prescriptions, but is about surviving a broken system.
The Local Pharmacy Is Dying–Here’s Why
One of the last hometown pharmacies right here in Oxford, Michigan, suddenly closed, shocking the community, with employees being notified only days before. Sad as that one story is, in 2024, over 2,300 independent pharmacies closed, which averages out to a loss of 8 local pharmacies every single day!
Many people assume that owning a pharmacy is lucrative–and it used to be. However, the rise of Pharmacy Benefit Managers (PBM), the middlemen between insurers, drug manufacturers, and pharmacies, is squeezing independent pharmacies dry. The PBMs decide what pharmacies get reimbursed for medication, and too often that reimbursement is less than the actual cost to buy the medication, forcing independent businesses to cover the shortfall.
The Prescription Reimbursement Problem
Here’s an example: Say a pharmacy pays $100 for a bottle of medication. The PBM may only reimburse them $75. That’s a $25 loss per prescription, which pharmacies aren’t even allowed to negotiate. If they signed the PBM contract, they eat the loss. Over time, this model becomes completely unsustainable.
Brand-name drugs like Ozempic or Wegovy (popular GLP-1 medications) make matters worse. Many independent pharmacies have simply stopped stocking them because the losses are automatic and significant.
Not Just Meds—The Overhead is Crushing
Pharmacies also face massive overhead, including rent, electricity, insurance, tech platforms, staff salaries, and compliance costs. We’ve heard from one pharmacist that they haven’t paid themselves a proper salary in 2 years. Another had to ration medication orders to the bare minimum just to stay afloat. Meanwhile, PBM executives are raking in tens of millions of dollars in annual salaries.
Corporate Greed, Mail Order Robots & Audits
Giant PBMs like CVS Caremark, Express Scripts, and OptumRx control over 73% of the market. Not only that, but they also own the insurance companies and the pharmacies. This vertical integration allows them to manipulate drug prices and funnel patients to their own stores. In the not-so-distant future, AI and mail-order services will start replacing human pharmacists. Efficient? Maybe, but it comes at the cost of personalized care. When you lose independent businesses, you lose the relationship.
Even if an independent pharmacy can hang on, PBM audits can be the final nail in the coffin. A single audit in 2024 cost pharmacies an average of $26,499. These audits nitpick technicalities (like prescription directions) and hand out fines without negotiation. This level of pressure would bankrupt most small businesses, and it’s doing just that to local pharmacies.
How You Can Help
Here at Apothecary and Company, we’re running our functional medicine pharmacy without taking insurance. This bold, cash-based model prioritizes transparency and patient relationships, with a focus on consulting, supplements, and personalized care. Even though the outlook seems bleak, change is possible, but we need to educate, fight PBM overreach through legislation, and most importantly, support independent pharmacies.
- Shop local: Pick up cough syrup, vitamins, supplements, or even a last-minute birthday card at your local pharmacy, even if you fill prescriptions elsewhere.
- Ask about cash prices: You might be surprised to find out-of-pocket costs beat your co-pay.
- Support tougher laws: States like Arkansas and Alabama are already cracking down on PBM abuses. Urge your own legislature to join the fight.
- Spread awareness: Share this with friends and family. Awareness is the first step toward fixing a broken system.
Pharmacies used to be the heart of the community. If we don’t act soon, they’ll become a thing of the past—and we’ll all be worse off for it. Learn more about our self-pay pharmacy and let us show you a better way to care for yourself and your loved ones.
