More pharmacy chains are closing in Michigan: What’s behind it?

MICHIGAN — Drugstore chains Walgreens and Rite Aid announced a slew of pharmacy closures this week, adding to the uncertainty among Michigan residents about where to fill 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 Michigan and other states, including lower spending by inflation-hit customers, low reimbursement rates for pharmaceutical care and low dispensing fees for Medicaid beneficiaries.

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In addition, current business models are outdated given increasing competition from stores selling many of the same goods, their statement said. Additionally, pharmacies are still adjusting to a surge in demand for their services during the Covid-19 pandemic.

Michigan has lost several pharmacies in a wave of closures in recent years. Rite Aid, one of the largest drugstore chains in the country, initially announced the closure of three Michigan stores before adding 12 more stores in Michigan earlier this month. Those stores include:

• Allen Park, 15411 Southfield Road
• Bay City, 3880 Wilder Road
• Burton, G4033 Fenton Road
• Burton, 6026 Lapeer Road
• Flint, 4519 Richfield Road
• Grosse Pointe Farms, 107 Kercheval Ave.
• Livonia, 37339 Six Mile
• Ludington, 936 E. Ludington Ave.
• Marlette, 2985 Main St.
• Milford, 640 N. Milford Road
• Spring Lake, 603 E. Savidge St.
• Wyandotte, 1998 Biddle Ave

Here are the closures announced by major pharmacy chains:

• Walgreens plans to close a “significant portion” of its 8,600 U.S. stores nationwide as it seeks to overhaul its struggling pharmacy model. In an earnings call with investors Thursday, Walgreens Boots Alliance CEO Timothy Wentworth said up to 25 percent of the stores – about 2,150 – could be closed. That’s in addition to the roughly 2,000 stores the Deerfield, Illinois-based chain has closed over the past decade, 484 of them since February.
• CVS has closed about 600 stores since 2022 and plans to close another 300 this year. The closures “are based on our assessment of population changes, consumer purchasing behavior and future healthcare needs to ensure we have the right pharmacy format in the right locations for patients,” CVS spokeswoman Amy Thibault said in an email to CNN earlier this year.

What does this mean for Michigan?

An Associated Press analysis from early June shows that there are 2,338 pharmacies in Michigan, or about 0.23 per 1,000 residents. In Detroit’s 48228 ZIP code, there are 10 pharmacies for about 54,000 residents; in Rochester Hills’ 48307 ZIP code, there are 16 pharmacies for about 43,000 residents.

In Canton Township, there are 15 pharmacies serving approximately 53,000 residents in the 48187 zip code.

Whether independent or a chain, pharmacies can play an important role in their community. They are health centers where the pharmacists and staff know the names of all patients, the medications they take, and can often spot signs of serious illness. These local stores often have supplies like catheters, colostomy supplies, and diabetes test strips that people need to stay home when they are seriously ill.

The AP analysis focused on rural communities and found that the disparities are greatest in those states. An earlier study by researchers at the University of Southern California found that black and Latino neighborhoods in 30 major U.S. cities had fewer pharmacies than white and diverse neighborhoods from 2007 to 2015, before the current wave of pharmacy closures.

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

Can Michigan’s independents close the gap?

Michigan’s 798 independent pharmacies face their own challenges and are unlikely to be able to fill the gaps in their pharmacies, according to a statement from the National Community Pharmacists Association, an industry organization that represents more than 19,400 independent pharmacists.

The group said in a statement earlier this year that new Medicare and Medicaid rules, which particularly result in lower reimbursements for prescription drugs, put a third of independent drugstores at risk of closure and that “millions of patients could be left without a pharmacy.”

In 2022, Michigan’s independent pharmacists filled 52,510,874 prescriptions. Total revenue from these businesses was $3.35 billion, with $3.10 billion coming from pharmacy sales and another $101 million coming from front-end sales.

Patients are suffering from the disappearance of pharmacies.

“You can think of a shutdown as a disruption of care,” Guadamuz, an assistant professor at the UC Berkeley 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 health insurance. And then that pharmacy is no longer there.”

When CVS suddenly announced last March that it was closing its store in Herscher, Illinois, a village of about 1,500 people 80 miles south of Chicago, the town’s mayor met with executives and asked them to at least delay the closure. CVS executives told the mayor that the front part of the store 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 AP, but the company also takes into account local market dynamics, population shifts and competition from stores selling the same over-the-counter products.