MIAMI, FLORIDA – DECEMBER 22: Sonia Rojas, a pharmacy technician, works in the P & P Pharmacy on December 22, 2020 in Miami, Florida. Reports indicate that drugstores around the country are rushing to hire thousands of pharmacists and technicians to administer COVID-19 vaccines and handle the additional work in the drugstores. (Photo by Joe Raedle/Getty Images)
More pharmacies are closing in Ohio and Michigan small towns amid complaints about middleman reimbursements and a difficult retail environment.
Philadelphia-based Rite Aid is closing an additional 27 stores in the two states, according to a bankruptcy filing reported on Monday by WTOL in Toledo. The stores are among 200 of the company’s 2,000 stores that it said it would close when it filed for bankruptcy protection last October.
They include pharmacies in 15 Ohio towns such as Ashtabula, Defiance, Coshocton, Wheelersburg, St. Mary’s, and Tiffin. Another 12 listed for closure in Michigan include such towns as Ludington, Wyandotte, Spring Lake, Bay City, Burton, and Flint.
The company didn’t immediately respond to a request for comment, but it and other brick-and-mortar pharmacies have been struggling with a difficult environment as they compete with online retailers such as Amazon. For example, CVS is finishing up a process in which it closed 900 stores nationally over three years and Walmart last year asked 16,000 pharmacists to help reduce costs by working less.
In addition, pharmacies nationwide have been complaining for at least eight years about diminishing reimbursements and clawbacks from middlemen who control access to so many insured patients that pharmacies believe they have no choice but to contract with them.
The businesses, known as pharmacy benefit managers, or PBMs, represent insurers and the biggest three are all part of the same corporation as a major insurer. They decide which drugs are covered, and they decide how much to reimburse pharmacies in a non-transparent system.
The biggest three, CVS Caremark, OptumRx, and Express Scripts, are estimated to control access to 80% of all insured patients in the United States.
After years of complaints and state attempts to rein in the companies, the Federal Trade Commission in 2022 undertook an investigation. It continues, although FTC Chair Lina Khan in March complained that the big PBMs weren’t cooperating despite obligations to do so.
Rite Aid’s disclosure this week that it will close 15 more pharmacies in Ohio will only add to the hundreds that have closed in the Buckeye State over the past decade. Closures in small towns here, in Michigan and elsewhere are especially concerning because they can create pharmacy deserts.
For the poor and elderly particularly, a pharmacy can be the most frequent — if not the only — point of contact with a healthcare professional. Closing a small town’s only pharmacy can create transportation issues that are all but insurmountable for some patients.
The Rite Aid Stores to be closed:
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