7,000+ U.S. pharmacies closed between 2022-2024 creating pharmacy deserts for 50 million Americans, but the closures are driven by pharmacy benefit manager reimbursement rates falling below dispensing costs -- a problem the retailers cannot solve by improving store operations

Over 7,000 U.S. pharmacies closed between 2022 and 2024, with 2,800 closing in 2024 alone. CVS closed 270 stores in 2025, Walgreens is shuttering 1,200 stores by 2027, and Rite Aid liquidated entirely after two bankruptcies. Nearly 50 million Americans -- 1 in 7 -- now live in pharmacy deserts with limited access to a local pharmacy, disproportionately affecting rural communities, low-income neighborhoods, and communities of color. Why it matters: pharmacy departments historically subsidized the front-of-store retail business by driving foot traffic, so when pharmacy reimbursement rates fall below the cost of dispensing (which has happened for many generic medications), the entire store economics collapse, so retailers close locations starting with the least profitable -- which are inevitably rural and low-income stores, so communities lose not just prescription access but also the only nearby source of basic health supplies, first-aid products, and vaccinations, so patients in pharmacy deserts face 30+ minute drives for medications, leading to prescription abandonment and worse health outcomes, so the healthcare system absorbs higher costs from preventable hospitalizations and emergency room visits that dwarf the pharmacy reimbursement savings that caused the closures. The structural root cause is the pharmacy benefit manager (PBM) reimbursement model: the three largest PBMs (CVS Caremark, Express Scripts, OptumRx) control ~80% of prescription volume and set reimbursement rates that have been declining for years. Retail pharmacies cannot negotiate individual reimbursement rates and are locked into 'take-it-or-leave-it' contracts. The PBMs are vertically integrated with insurers (CVS/Aetna, UnitedHealth/OptumRx, Cigna/Express Scripts), creating a conflict where the PBM benefits from lowering reimbursement to pharmacies while the parent company captures the savings. The irony is that CVS Caremark's reimbursement rates are helping to close CVS retail pharmacy locations.