Is the Traditional Retail Pharmacy Business Model Sustainable?

Following a host of recent retailer announcements it is time to take another look at the state of retail pharmacy. | Viewpoints | by Ann Johnson, Pharm.D.

The future of retail pharmacy is not looking rosy, thanks to increasing store closures, decreasing third-party reimbursement rates, and public complaints about high drug costs. In a January 2022 column, we discussed the retail pharmacy business model and the future of the industry. Following a host of recent retailer announcements, including a Kroger-Albertsons merger and the Rite Aid bankruptcy filing, it is time to take another look at the state of retail pharmacy.

Walgreens

In our January 2022 column, we provided a recap of Walgreens’ 2021 announcement that it was investing over $5 billion in VillageMD. At the time, VillageMD had more than 200 clinic locations and planned to open an additional 600 Village Medical locations at Walgreens stores, which would have served as primary care locations. The goal was to have 1,000 locations by 2027.