Walgreens Store Closures: Impact on the Pharmacy Industry

In June 2024, Walgreens announced plans to close around 2,150 stores by 2027, driven by stagnant profits, increased competition, and changing consumer behaviors. The chain has faced challenges such as high inflation squeezing consumer spending, decline in retail sales, and pressures from cheaper alternatives like dollar stores and big box retailers. Compounding these issues, the pharmacy business is also facing reimbursement challenges from Pharmacy Benefit Managers (PBMs), which have led to a shift towards generic prescriptions, further impacting profits. The declining presence of chain pharmacies creates the risk of 'pharmacy deserts' in low-income urban areas, where access to essential medications becomes limited. Both Walgreens and CVS have acknowledged the issue, with Walgreens aiming to maintain access for underserved communities. The role of PBMs is critical, as they negotiate drug prices and determine coverage, which can adversely affect pharmacies without significant negotiating power. Legislative changes may be needed to address these healthcare access issues. Despite the struggles of large chains, a rise in independent pharmacies could offer solutions for communities left without access to essential health services, suggesting a potential resurgence in localized pharmacy care.