Elizabeth Anderson, an analyst at Evercore IRI, explained that “if reimbursement rates start to come down and drug stores can’t offset it with other growth, then it has a negative impact on their profitability”. This economic strain has led many pharmacies to close locations, especially in areas where reimbursement rates are lower, such as communities with a higher percentage of public insurance recipients.
Pharmacy Deserts and Community Impact
One of the most concerning consequences of widespread store closures is the creation of “pharmacy deserts”—areas where residents have limited or no access to a nearby pharmacy. Research shows that these closures disproportionately affect low-income and minority communities.3 A study conducted in major U.S. cities revealed that pharmacy deserts are predominantly found in Black and Latino neighborhoods, exacerbating existing healthcare disparities.
In Boston, for instance, Walgreens faced protests after announcing the closure of several stores in predominantly minority communities. Local activists voiced concerns that the loss of pharmacies would negatively impact access to essential healthcare services.
