Pharmacy Deserts: Why They Matter for Your Clients and What You Can Do About It

Pharmacy Deserts: Why They Matter for Your Clients and What You Can Do About It

In the last two years, more than 2,700 retail pharmacies have closed. That includes everything from big-name chains to local independent drugstores, and it leaves many employees without convenient access to their medications. For benefit consultants, this trend directly affects the health, equity and costs for the populations they serve.

What’s Happening: A Look at the Numbers

Since 2019, over 7,000 pharmacies have closed in the U.S., and the pace hasn’t slowed. Just in 2024 alone, more than 2,200 pharmacies shut their doors, averaging about eight closures per day. These closures are being driven by low reimbursement, major retail bankruptcies like Rite Aid and continued consolidation across the industry.

The result? A growing number of what public health experts call pharmacy deserts.

What Exactly Is a Pharmacy Desert?

A pharmacy desert is more than just a rural problem. It’s any area, urban, suburban or rural, where people lack reasonable access to a pharmacy. That usually means:

  • More than one mile away in urban areas.
  • Two miles in suburban areas.
  • 10 miles in rural regions.

However, distance isn’t the only factor. Even if a pharmacy technically exists nearby, lack of public transportation, limited hours or closures of independent stores can make access nearly impossible, particularly for lower-income communities or those with mobility challenges.

Today, roughly one-third of neighborhoods in our largest cities meet the criteria for being a pharmacy desert.

Why It Matters for Employers and Employees

For employees living in these areas, the ripple effects are real:

  • Reduced adherence to medications, particularly for chronic conditions like diabetes or hypertension.
  • Limited access to vaccines and preventive care services that many pharmacies now provide.
  • Increased healthcare costs driven by ER visits, unmanaged conditions and higher absenteeism.
  • More missed work days.
  • Health equity concerns, particularly for minority and rural populations.

Even access to high-demand medications like GLP-1s for diabetes and weight management can become limited, making it harder for employees to take control of their health.

What Consultants Can Do

Consultants can help clients respond through several strategies:

  1. Promote Mail-Order and Telepharmacy
    Encourage employers to work with pharmacy benefit managers (PBMs) that offer reliable delivery services and virtual consultations. Companies like Mark Cuban’s Cost Plus Drug Company offer affordable direct-to-consumer options.
  2. Support Telehealth Integration
    Make sure your clients’ benefit designs include virtual pharmacist consultations to bridge access gaps.
  3. Advocate for Biosimilars
    Promoting biosimilar adoption, such as alternatives to Humira, can drive savings and help stabilize pharmacies by improving margins on commonly prescribed therapies.
  4. Boost Wellness Programs
    Incorporate pharmacy-based services like immunizations and screenings into employer wellness offerings to make up for lost access in communities with limited brick-and-mortar pharmacies.
  5. Use Data to Identify Risk Areas
    Review workforce demographics and locations to pinpoint areas most affected by pharmacy closures and then tailor benefit strategies accordingly.

Spotlight: What’s Happening in Arkansas

One state to watch is Arkansas, where Act 624 was signed into law earlier this year, which will ban PBMs like CVS Caremark, Express Scripts and OptumRx from owning or operating pharmacies as of January 1, 2026. The law also prevents them from steering patients to their own pharmacies or underpaying independent competitors.

The intent is to protect local pharmacies, but all 23 CVS pharmacies in Arkansas could close, impacting 340,000 people and creating additional pharmacy deserts, especially in rural areas.

The law is now tied up in federal court, with major PBMs challenging its legality. Other states, including Vermont and New York, are watching closely. The outcome could shape how other states approach PBM reform and pharmacy access going forward.

Final Thoughts

Pharmacy deserts are growing, and they have real consequences for employee health, equity and cost. While benefit consultants cannot control the closures, clients can guide their employees toward solutions that help their people stay healthy and protected, no matter where they live.

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Policy Spotlight: How Trade Policy Impacts Pharmacy and the Tug-of-War of Drug Pricing

Policy Spotlight: How Trade Policy Impacts Pharmacy and the Tug-of-War of Drug Pricing

In the ongoing debate over U.S. trade policy, one ripple effect hits close to home: prescription costs. As tariff policies evolve, the pharmaceutical supply chain could feel the strain. Here’s how it all connects to patients, pharmacies and the future of drug manufacturing.

What Are Tariffs?

Tariffs are taxes on imported goods. They're used to protect domestic industries, raise government revenue and influence trade patterns. When tariffs are applied to pharmaceuticals or their ingredients, it poses the question: can they do more harm than good for American consumers?

Where Our Medicines Come From

Nearly 80% of the active pharmaceutical ingredients (APIs) in U.S. drugs are imported, with China and India serving as the two largest suppliers. This heavy reliance on imports is particularly critical for generic drugs, which make up 90% of U.S. prescriptions, making them especially sensitive to tariff-related disruptions.

Drug Pricing Under Pressure

Drug Type Tariff Impact Why It Matters
Generics High High import dependence, thin profit margins and fragile supply chains.
Brand-name Moderate-Low Diversified sourcing and higher margins make them more resilient.

Broader Effects Across the Board

  • Drug shortages may worsen as international supply chains are squeezed.
  • Pharmaceutical companies might cut back on research and development (R&D) to offset rising costs.
  • Other countries could impose retaliatory tariffs, escalating global drug pricing pressures.

What’s Next?

The short-term outlook for the pharmaceutical industry suggests potentially higher prices at the pharmacy counter and more frequent medication shortages. In the long-term, there is a possibility of a shift toward domestic drug manufacturing. However, such a transition demands time, capital and policy incentives.

The Bottom Line

Tariffs may aim to boost American industry, but when it comes to medicine, they could mean higher care costs, fewer options and supply challenges. Staying informed is key to understanding how international trade decisions end up affecting local pharmacies.

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GLP-1s in Transition: From Compounding Bans to Click-to-Clinic Access

GLP-1s in Transition: From Compounding Bans to Click-to-Clinic Access

What Is Direct-to-Consumer Pharmacy?

Direct-to-consumer (DTC) pharmacy is one of the newest trends in healthcare delivery. This model, which allows medications to be shipped directly from manufacturers or fulfillment partners to patients, is reshaping how people access treatment — especially in the weight loss space.

DTC pharmacy bypasses traditional retail and mail-order pharmacies. Prescriptions are sent directly from a provider to a manufacturer or third-party fulfillment partner. Telehealth platforms like Hims & Hers, Noom, Ro and Hone are leading the charge, offering integrated virtual consultations, prescribing services and providing medication fulfillment.

While this model improves convenience and adherence ‒ thanks to home delivery and auto-ship options ‒ it also raises safety concerns. Because DTC often bypasses the pharmacy benefit, medications may not be checked for interactions or duplications. For example, a patient could unknowingly take both Wegovy and Rybelsus, not realizing they share the same active ingredient, semaglutide. Additionally, DTC programs often lack utilization management strategies, allowing patients to access medications like Zepbound without prior authorization or clinical review.

Why the Growth?

The DTC surge is a response to the explosion of GLP-1 compounding. With branded medications like Wegovy and Zepbound in high demand, manufacturers are fighting back against unregulated compounded alternatives. Novo Nordisk, for instance, launched public awareness campaigns ‒ “Choose the Real Thing” and “Check Before You Inject” ‒ to educate patients on the risks of counterfeit semaglutide.

As of May 22, 2025, compounding of semaglutide and tirzepatide is no longer permitted unless specific patient needs justify it. However, some compounders are skirting regulations by:

  • Adding ingredients like vitamin B12 or glycine to claim the formulation is “customized.”
  • Offering micro-dosing strategies, where patients receive smaller, nonstandard doses for maintenance or to reduce side effects.
  • Claiming medical necessity, such as allergies to commercial excipients or the need for intermediate strengths not commercially available.

These tactics aim to exploit regulatory exceptions that allow compounding when a significant clinical difference exists between the compounded and commercial product.

Market Shifts and Telehealth Turbulence

Telehealth platforms have played a pivotal role in expanding access. Some platforms still offer branded GLP-1s through partnerships with manufacturers. However, a major shake-up occurred in June: Novo Nordisk terminated its partnership with Hims & Hers after accusing the company of promoting and selling knockoff versions of Wegovy under the guise of personalization. The fallout was swift ‒ Hims & Hers’ stock dropped over 30% as the news broke.

This development underscores the heightened scrutiny around DTC and compounding practices. Novo Nordisk cited patient safety and legal noncompliance as key reasons for the split, reinforcing its stance against mass sales of compounded drugs.

Spotlight on LillyDirect and NovoCare

Two major DTC programs are leading the charge.

LillyDirect offers Zepbound at discounted self-pay prices ($349–$499 depending on dose). Patients receive vials ‒ not pens ‒ requiring self-measurement and injection. Manufacturer coupons are available for those with pharmacy benefit coverage. LillyDirect also partners with lifestyle coaching programs to support long-term success.

NovoCare provides Wegovy in pre-filled pens for easier administration. Pricing is a flat $499/month. The program emphasizes authenticity and safety, steering patients away from compounded alternatives.

Formulary and Coverage Shifts

A major formulary change went into effect July 1: CVS Caremark now excludes Zepbound from its preferred list, favoring Wegovy instead. This could significantly disrupt treatment for members currently using Zepbound. Clients should explore alternatives to avoid gaps in care. For those wishing to continue offering Zepbound, solutions are in development.

CVS pharmacies, in partnership with Novo Nordisk, will offer Wegovy at the same $499/month cash price through the NovoCare program. Meanwhile, Cigna is capping copays at $200/month for covered GLP-1s, helping members manage costs while maintaining benefit integration.

Implications for Employers and Patients

The direct-to-consumer pharmacy model is rapidly transforming how patients access GLP-1 medications, offering convenience and affordability — but not without trade-offs. As compounding restrictions tighten, strategies like micro-dosing and formulation tweaks are emerging to maintain access. Meanwhile, shifting partnerships and formulary exclusions ‒ such as CVS Caremark’s move to drop Zepbound ‒ are creating ripple effects across the market. Staying informed and proactive remains essential for clients navigating this evolving landscape.

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