Chains Feeling the Squeeze

It’s time for the folks in Washington to stop paying lip service to the problem and pass legislation that will rein in the PBMs.

A recent cover story in Barron’s (Feb. 12),  “Pharmacies in Crisis: Drug Deals Gone Bad” and a related sidebar article “An Inside Look at Troubled CVS,” caught my eye. These did a good job of articulating the problems faced by the national chains.

The article stated, “In eight years national pharmacy chains have gone from an invasive species to an endangered one. Today their entire business model is under pressure.” According to the article, they contributed to putting out of business a third of independents from 1990 to 2010.

Put in perspective, the financial picture isn’t pretty. The article stated that adjusted operating income for Walgreens’ U.S. retail pharmacy division fell from $5.4 billion in the 2016 fiscal year to $3.7 billion in 2023, a 31.1% drop. At CVS the company’s retail division had operating profits of $7.3 billion in 2016. In 2023 it was $6 billion.

We have all heard how chains are closing stores, leaving consumers who rely on these locations for their prescriptions in…