The Future of Retail Pharmacy

It’s probably fair to say that the past 10-15 years have not been great times for the retail pharmacy business. In fact, in the United States, nearly three out of every 10 pharmacies operating between 2010 and 2020 had closed by 2021. The study, published in the journal Health Affairs, found that in most states not enough new stores have opened to offset the closures. The risk of closure was higher for independent (versus chain) pharmacies and for pharmacies located in Black and Latino neighborhoods. It is likely that these trends have not changed in the past few years. 

Analysts have identified a long list of contributing factors behind this retrenchment. Inflation is front and center, driving up the cost of rent, labor and business services. Competition from online, specialty and food stores has squeezed margins on both “front of store” merchandise and medicines. Dramatically increased retail theft has forced stores to pay for more security measures that further cut into profits. Pharmacies that were not part of an insurer-PBM-chain pharmacy conglomerate were at a distinct disadvantage. Because a triad of PBMs control over 80% of the scripts filled in the country, independent pharmacies are often forced by contract to fill prescriptions for which they’re reimbursed less than their acquisition cost for the medicines they dispensed. Then there are shortages of pharmacists, pharm-tech candidates and even floor staff that have made staffing a challenge. Plus, consumer shopping habits have been shifting, too, so the “drug store” is not the traffic magnet that it once was. 

Since the pandemic, a number of retail giants in the United States have made serious efforts to integrate outpatient healthcare into their retail business. Despite what appeared to be a “natural fit” between the two, most of these efforts have been abandoned. In fact, we are seeing dramatic retrenchment in the number of retail pharmacies across the United States. CVS plans to close 270 locations in 2025 after 800 net closures over the prior three years; Walgreens Boots Alliance has closed about 2,000 stores in the past decade, with 500 more planned for 2025. Rite Aid, similarly, has closed hundreds of stores as part of its emergence from Chapter 11 in Fall 2024. 

So what about the opportunities facing retail pharmacies? 

As a starting point, let’s take a look at the supply and demand for physicians across the U.S. The COVID-19 pandemic dramatically accelerated the departure of physicians from clinical practice. As of 2025, there is an estimated shortfall of 64,000 physicians relative to the demand for medical care. Given the average of 11,400 Americans turning 65 every day and the increased needs of this population for care, the prospect of a shortfall of as many as 86,000 physicians by 2036 represents a serious public health problem. 

During the pandemic, community pharmacists demonstrated their value as part of the medical community, providing medication to patients, administering tests, vaccinations and other COVID treatments. 

Since the pandemic, pharmacists have continued to expand their scope of practice to include clinical services such as wellness screenings, medication therapy management and chronic disease management, often working collaboratively with other healthcare providers. 

There is an important place for pharmacists from the perspective of patients. A 2023 Wolters Kluwer consumer survey found that 58% of Americans are likely to visit a local pharmacy as their first step with a non-emergency issue, and 81% say they trust a pharmacist, nurse or nurse practitioner to diagnose minor illnesses and prescribe medications. 

Physicians are already being overwhelmed by the growing “tsunami” of aging adults, many with chronic conditions. Pharmacists have the training and the economic incentives to play a larger role in managing these patients as part of the medical community. It’s time we recognized pharmacists as providers at the federal level. It just makes good sense.

Michael Abrams, MA, is co-founder and managing partner of Numerof & Associates, a strategy and implementation consultancy.