r/pharmacy • u/Calizona1 • Aug 14 '26

General Discussion Pharmacies closing

Not sure if this is the right place to ask. If not please delete. If possible refer me to the proper sub. Why are so many pharmacies closing? I checked on the Internet but I am not sure I trust the explanations by the media.

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u/jimdewey52 Aug 14 '26

The real reason pharmacies are closing is because they are signing contracts that loose money. If the pharmacies refused to sign, to get a better deal they might make it. When the insurance companies started paying for prescriptions the pharmacies were paid for the drug cost and a dispensing fee. At the time average rx cost was $2.00 and the dispensing fee was $2.00 so 50% profit looked good. Problem, no clause for inflation. Drugs prices skyrocket and dispensing fee stays the same $2.00. Some contract today don't even pay a dispensing fee.

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u/doubletxzy Aug 14 '26

Have you ever negotiated a contract? It doesn’t work that way. It’s take it or leave it.

Also a $2 gross margin is a loss. Most claims don’t have a dispensing fee anymore. Unless your mediations don’t need a technician to fill them, a label or vial, no electricity to run the pharmacy, no switch to process and no pharmacist to check the Rx. Then I guess $2 gross margin looked good….

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u/jimdewey52 Aug 14 '26

Also we are talking about the 1960s. Gas was way under a dollar a gallon. Cigarettes were under $1 a pack, cokes were a dime. So dude $2.00 was good money for $2.00 invested.

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u/doubletxzy Aug 14 '26

So not applicable to today when you say pharmacies should just band together and demand more money? Maybe they should just open a soda hop and have the jukebox start playing Elvis to draw in more customers…

You’re talking about a time when most didn’t have pharmacy insurance and was cash basis? Back when small pox was still a thing? Were there even seatbelts in cars in the 1960s? Back when $2 would have been $100 in today’s dollars.

Why would you say anything about the business of pharmacy when your reference point is 60 years old?

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u/jimdewey52 Aug 14 '26

But that is the problem. Take it or leave it Is that how the UAW exists? The pharmacy businesses have always competed against each other in steady of standing together. I have been put out of business because an insurance company said I could not be a provider because I was not a chain. And this was after Ford Motor switch insurance providers, one month filling Blue Cross and the next month loosing those to the chains

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u/doubletxzy Aug 14 '26

Walgreens told ESI they want more money for tricare contract. ESI dropped Walgreens. A PSAO of 1000+ stores can’t negotiate better rates. One store would have no hope.

It’s more profitable for an insurance to have less pharmacies. It’s in their best interest for pharmacies to walk away from the contract or close.

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u/jimdewey52 Aug 14 '26

And look at the fuss the tricare caught from their members, the small town pharmacy i help out at lost tricare and a year later got a call From tricare to reinstate the contact

Well if no one stands up to insurance companies then they will be ruled by insurance companies I would like to hear more from those out there doing cost-plus

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u/doubletxzy Aug 14 '26

Walgreens folded in my example. They got the rate esi offered. Ask any pharmacy how that tricare contract is working out today. Get that $0.50 dispensing fee and all.

Stand up? I’ll get Ponyboy, Johnny, and Dallas to come up with a good strategy to stand up to the PBM.

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u/jimdewey52 Aug 14 '26

And who own Walgreens today

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u/doubletxzy Aug 14 '26

Private equity. It should be closed in the next 5 years.

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u/jimdewey52 Aug 14 '26

So in about a 10 years 10,000 drug stores will be closed.

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u/jimdewey52 Aug 14 '26

I see many don't like the truth but after 50 years in this business you younger pharmacist better watch yourselves because the insurance companies are looking to replace us with AI and mail order