What Walgreens Now Understands, Mark Cuban Misses (for the Time Being)

Pharmacy TimesDecember 2022
Volume 88
Issue 12

For almost half a century, the pharmacy business pulled away from serving patients into retailing, spreadsheet wars; COVID-19 changed the game.

“Cash is king” is a phrase often used to imply that assets such as bonds, ownership in a business, and real estate are nice to have but cash is ultimately necessary to buy goods and navigate life. Similarly, community pharmacies run on personnel. It is nice to have electronic prescriptions, machines that fill prescription bottles, patient-texting applications, safety systems that help prevent mistakes, and well-stocked OTC aisles. But the individuals who use such utilities ultimately make a community pharmacy.

I was a floating pharmacist for 20 years and worked in more than 100 locations with identical hardware, software, and standard operating procedures. Each location’s work effectiveness and experience were determined almost exclusively by the team members with whom I worked on a given day.

The Retail Pharmacy Business Is Dying

By 2025, 90% of all prescription fills will be for nonbranded generic drugs, accounting for just 7% of total drug spending in the country.1 Without a dramatic shift in the specialty and specialty-lite marketplace, several community pharmacies (or the majority of them) will dispense only generic medications. The average gross cost and reimbursement for prescription fills will likely plummet as branded drugs cease to exist, yielding to specialty categorization. Fundamentally, a shift toward an average cost of less than $20 with an inventory cost of less than $100,000 means that retail pharmacy is dying as a business model. Fortunately, the health care services pharmacy model is rising.

COVID-19 Services Drive the New Pharmacy Business Model

Profit and loss statements, balance sheets, and community perceptions of what pharmacies are and what they do changed dramatically during the past 2 years. The health care setting of choice for immunizations and point-of-care testing has become the local pharmacy. The place to go when all others have closed for convenient care services is the local pharmacy. And increasingly, the local pharmacy will be the place where patients receive primary care. The Little Clinic, VillageMD, Walmart Health, and other colocated primary care strategies, have been added to the first-of-their-kind MinuteClinic convenience care and HealthHUB deployments. Thousands of pharmacies are prescribing medications because of policy changes and collaborative practice agreements with onsite or near-site primary care facilities and other team members. The new business model is coming, and community pharmacy can scale more quickly than any other profession or care setting.

Pharmacies Must Adjust to Lower Demand for Prescription Refills

Profits from the sale of behind-the-counter prescriptions will decrease in the not-so-distant future, and community pharmacies will fill prescriptions as a means of engaging patients more effectively and successfully in services delivery and associated products in front of the counter. The battle over the $5-or-less item will be reduced to a game of who can sell the candy bar cheaper. Walmart’s $4 list strategy has lasted nearly 2 decades. Yes, there is a segment of the marketplace where GoodRx and billionaire Mark Cuban’s Cost Plus strategies take advantage (to the patient’s benefit, no doubt) but that is likely to represent just a small percentage of prescription fills in the future.

Mail Order Pharmacies Work Best for Patients With Low Risk of Poor Outcomes

I have had a high-deductible health plan for more than a decade for my family of 5, and I cannot recall a single time when my employer’s plan reduced the out-of-pocket cost for one of our prescriptions. We are fortunate to not have major chronic illnesses, and although we use a community pharmacy for prescription fills, we would likely do fine with a mail order pharmacy. However, other patients such as my parents and neighbor need a community pharmacy. Twenty percent of Americans represent 70% of spending on health conditions and 82% of prescription fills.2 They need community health care providers to make sure their drug regimens work together and are continually adjusted, updated, and administered correctly and on time.

Consequences of Eliminating Care Delivery From Pharmacies

Reducing community pharmacy to a retail establishment that sells drugs like they are candy bars has profound consequences on a community’s well-being, not just in terms of health care but also economic health (especially in rural and urban locations) and sense of community. Healthy individuals with healthy relatives may dismiss the importance of a community pharmacy presence, but individuals with disease and their caregivers know that losing a pharmacy is incredibly disruptive and unhealthy for all in its proximity.

Reinvestment in Human Capital Toward a Service Model May Be a Turning Point

Let’s go back to human capital. Walgreens’ recent press release announcing the removal of taskbased performance metrics for its pharmacists’ rote prescription fills is significant. The company that employs approximately 10% of the US pharmacist workforce just told the world, “The change in approach to talent management comes as Walgreens is laying the groundwork for new areas of pharmacist care, such as testing and [managing] routine illnesses. Moving forward, pharmacy teams will be evaluated solely on the behaviors that best support patient care and enhance the patient experience, in line with the company’s core values.”3

In combination with CVS’ press release promoting point-of-care testing, condition and drug regimen evaluation, and prescription of Paxlovid, this move indicates that times really are changing.4 Savvy businesspersons should take note and do what entrepreneurs do best: evolve with the marketplace.

About the Author

Troy Trygstad, PharmD, PhD, MBA, is the executive director of Community Pharmacy Enhanced Services Network USA, a clinically integrated network of more than 3500 participating pharmacies.


1. The use of medicines in the U.S. 2022. IQVIA. April 21, 2022. Accessed November 17, 2022. https://www.iqvia.com/insights/the-iqvia-institute/reports/the-use-of-medicines-in-the-us-2022

2. Medicine use and spending in the U.S. IQVIA. May 9, 2019. Accessed November 17, 2022. https://www.iqvia.com/insights/the-iqvia-institute/reports/medicine-use-and-spending-in-the-us-a-review-of-2018-and-outlook-to-2023

3. Walgreens sharpens focus on patient care and experience, eliminating task-based metrics for pharmacy staff performance reviews chainwide. News release. Walgreens Newsroom. October 26, 2022. Accessed November 17, 2022. https://news.walgreens.com/press-center/news/walgreens-sharpens-focus-on-patient-care-and-experience-eliminating-task-based-metrics-for-pharmacy-staff-performance-reviews-chainwide.htm?utm_source=Mentors%2C+Investors%2C+%26+Friends&utm_campaign=97b8080227-Weekly+Update+2%2F6%2F18_COPY_01&utm_medium=email&utm_term=0_29d89f8a0d-97b8080227-1361202760

4. Pharmacist prescribing of COVID-19 antiviral treatment now available at CVS Pharmacy. News release. CVS Health. November 15, 2022. Accessed November 17, 2022. https://www.cvshealth.com/news-and-insights/press-releases/pharmacist-prescribing-of-covid-19-antiviral-treatment-now

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