In recent years, the American drugstore industry has faced major challenges. Stores are closing, services are being cut back, and once-thriving pharmacies are struggling to survive, according to an article by MARKETWATCH. But why is this happening? The answer lies in a combination of government overregulation, corporate greed, and the growing power of pharmacy benefit managers (PBMs)—middlemen who manipulate drug pricing and reimbursements to their own advantage.
For decades, local pharmacies served as the backbone of American healthcare. However, as government regulations continue to expand, small and independent pharmacies have found it nearly impossible to compete. The federal government, along with state bureaucracies, has imposed complex rules, price controls, and red tape that make it increasingly difficult for businesses to turn a profit.
While lower prescription drug prices might sound like a win for consumers, in reality, it forces pharmacies to operate with razor-thin margins, leaving small businesses unable to cover operational costs. Meanwhile, large chain pharmacies like Walgreens and CVS—both of which donate heavily to questionable causes—have the resources to absorb these financial hits while continuing to consolidate the industry, making it harder for local pharmacies to survive.
One of the biggest threats to drugstores today is the unchecked power of Pharmacy Benefit Managers (PBMs). These corporate middlemen negotiate drug prices between manufacturers and insurers, but instead of passing savings onto consumers, they manipulate pricing to maximize their own profits.
PBMs determine which drugs are covered by insurance plans, and they routinely force independent pharmacies to accept payments that are far below the actual cost of the drugs they dispense. This has led to widespread closures of independent pharmacies, many of which simply cannot afford to sell drugs at a loss.
Who benefits from this system? Big Pharma, Big Insurance, and the bureaucrats in Washington who turn a blind eye.
It’s not just independent pharmacies that are struggling—major chains like Walgreens, CVS, and Rite Aid are also closing locations across the country. Why? Because despite their size, even they are struggling to deal with inflation, theft, and declining foot traffic.
- Rampant theft: Soft-on-crime policies in Democrat-led cities have led to skyrocketing shoplifting rates. Many Walgreens and CVS locations in cities like San Francisco and Chicago are shutting down because thieves steal with zero consequences—and corporate leadership refuses to push back out of fear of "bad optics."
- Economic downturn: Thanks to the Biden administration’s reckless spending and inflation crisis, everyday Americans are cutting back on discretionary spending—including impulse purchases at the pharmacy.
- Healthcare “reform” failures: Government-controlled healthcare systems—like Obamacare—have driven up costs while limiting competition, leaving both patients and businesses worse off.
So what does the future look like? If current trends continue, America will see fewer drugstores, longer wait times, and less consumer choice. In the name of "cost-cutting" and "efficiency," we will likely see more government-controlled distribution of medications, forcing Americans into a system where bureaucrats, not doctors or pharmacists, decide what drugs you can access.
Meanwhile, large corporations will continue to push for automation and online pharmacy models, removing the personal touch and expert advice that local pharmacists once provided.
The collapse of the pharmacy industry isn’t inevitable, but action is needed:
- Push for PBM reform: Congress must rein in PBMs and force transparency in drug pricing and reimbursements.
- Support local pharmacies: Whenever possible, choose independent drugstores over big chains.
- Demand real healthcare reform: We need free-market solutions, not more government interference, to bring down drug prices while preserving competition.
- Hold politicians accountable: Stop electing leaders who push for regulations that favor massive corporations at the expense of small businesses and everyday Americans.
If we don’t act now, we risk losing one of the most important pillars of American healthcare. And once it’s gone, government-run medicine will be the only option left—a reality that history shows never ends well.
