New pharmacy chains are closing in Georgia: what’s behind it?

GEORGIA — Pharmacy chains Walgreens and Rite Aid announced a series of pharmacy closures this week, creating more uncertainty among Georgia residents about where they will get their prescriptions as pharmacy deserts become more common . CVS is also closing stores.

Pharmacy chain executives have cited a variety of reasons for closing stores in Georgia and other states, including reduced spending by inflation-weary customers, low pharmacy reimbursement rates and low dispensing fees for Medicaid enrollees.

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Additionally, they said, current business models are outdated in an environment of increased competition from stores that sell many of the same merchandise, and pharmacies are still adjusting to a rise in demand for services during the COVID-19 pandemic.

Georgia has lost several pharmacies during a wave of closures in recent years.

In 2022, two CVS locations closed in central Georgia. A year later, two more closed in Atlanta. A historic Walgreens store in downtown Atlanta also closed its doors earlier this year, much to the dismay of local students, city officials and downtown leaders.

Several independent pharmacies in Georgia have also closed in recent years, according to this map citing local news reports.

Here are the closures announced by the major pharmacy chains:

• Walgreens plans to close a “significant portion” of its 8,600 U.S. stores to turn around its struggling pharmacy model. In a conference call with investors Thursday, Walgreens Boots Alliance CEO Timothy Wentworth said up to 25% of the stores — about 2,150 of them — could close. That’s on top of the roughly 2,000 stores the Deerfield, Illinois-based chain has closed over the past 10 years, including 484 since February.
• Rite Aid, saddled with billions of dollars in debt and more than a thousand federal, state and local lawsuits accusing the chain of illegally dispensing prescriptions for painkillers, said in court documents that it would close 27 more stores in two states, nearly all of its pharmacies in Michigan and Ohio. That’s in addition to the nearly 500 stores the chain has already closed.
• CVS has closed about 600 stores since 2022 and plans to close another 300 this year. These closures “are based on our assessment of population changes, consumer shopping habits and future healthcare needs, to ensure we have the right pharmacy format in the right locations for patients,” said Amy Thibault, a spokesperson for CVS, in an email to CNN earlier this year.

What does this mean for Florida?

An Associated Press analysis in early June shows 2,179 retail pharmacies, or about 0.21 per 1,000 people in Georgia.

Whether independent or chain, pharmacies can be important assets in their communities. They are health centers where pharmacists and staff know everyone’s name and medications, and can often detect signs of serious illness. These local businesses are often stocked with supplies like catheters, colostomy supplies, and diabetes test strips that people need to stay home when facing serious illnesses.

The AP analysis focused on rural communities, finding that the gaps are widest in those states. An earlier study by researchers at the University of Southern California found that Black and Latino neighborhoods in 30 large U.S. areas. Cities had fewer pharmacies than white and diverse neighborhoods between 2007 and 2015, before the current wave of pharmacy closures.

“If you live in a low-income neighborhood, and in fact a black and Latino neighborhood, it’s less common to have a pharmacy. And having a pharmacy that meets your needs is much less common,” Jenny Guadamuz, a co-author of the study, told CNN.

Will Georgian independents close the gap?

Florida’s 654 independent pharmacies face their own challenges and are likely unable to fill pharmacy gaps, according to the National Community Pharmacists Association, a trade group that represents more than 19,400 independent pharmacists.

The group said in a statement earlier this year that new Medicare and Medicaid rules resulting in lower prescription reimbursements, in particular, put a third of independent pharmacies at risk of closure and that “millions of patients could find themselves without pharmacy.

In 2022, Georgia’s independent pharmacists filled more than 43 million prescriptions. Total sales from these stores were nearly $2.8 billion, of which $2.6 billion came from drugstore sales and just over $200 million from initial sales.

Patients suffer when pharmacies disappear.

“You can think of a shutdown as a disruption in care,” Guadamuz, an assistant professor at UC Berkeley’s school of public health, told CNN last fall. “You had a routine: You went to a pharmacy that was geographically accessible – ideally affordable – and probably preferred by your health insurance plan. And then this pharmacy is no longer there.

When CVS suddenly announced plans last March to close the store in Herscher, Ill., a village of about 1,500 people 80 miles south of Chicago, the town’s mayor met with executives and their asked to at least delay the closure. CVS executives told the mayor the storefront wasn’t bringing in enough money, the AP reported.

Access to pharmacies is an important consideration in decisions about store closures, CVS spokesman Matt Blanchette told the AP, but the company also looks at local market dynamics, population movements and competition from stores selling the same products over-the-counter, he said.

The Associated Press contributed to this report.