By Jaymie Baxley
People in rural communities depend on local pharmacies for more than just prescription medicines.
Many rural pharmacies offer immunizations, blood pressure testing and other services that can be difficult to get in remote places where traditional health care providers are few and far between. In some areas, a rural pharmacist “may be the only trained health professional in town,” according to Professor Delesha Carpenter of the Eshelman School of Pharmacy at UNC Chapel Hill.
“If you wake up with a rash or some kind of bite, the pharmacist is the most accessible health professional,” she said. “You don’t need an appointment, you don’t need health insurance and they’re often open after providers’ offices have closed.”
But rural pharmacies across the country are struggling. A recent study by the Rural Policy Research Institute (RUPRI) at the University of Iowa found that the number of retail pharmacies in rural communities across the U.S. declined by 5.9 percent from 2018 to 2023.
North Carolina is not immune to the trend. In an email to NC Health News, Fred Ullrich, program director for RUPRI, said at least three rural municipalities in the state — Faison, Selma and Tryon — lost access to retail pharmacy services during that period.
Carpenter said pharmacy closures can be devastating for rural communities, where residents skew older and are more likely to live with obesity, high blood pressure and other conditions than their urban counterparts. They also face greater transportation challenges and higher rates of poverty.
“When a rural pharmacy closes, people lose access to that health care provider and there may not be anything else in town,” she said. “There might not be anywhere else for them to go, especially if they’re uninsured — and there’s high levels of people being uninsured in rural communities. Where can those folks now go?”
Competing with cities
Joe Moose, who with his brother runs Moose Pharmacy, a 142-year-old business with eight locations in the Central Piedmont, fears the state will lose more rural pharmacies in the future.
He said the ever-rising cost of prescription drugs has created a “volume market” that favors corporate drug stores in urban areas. Smaller, independently owned shops in more sparsely populated communities, meanwhile, “make very little or nothing at all” from filling prescriptions.
“You can’t even keep the doors open if you don’t have volume, and density generally creates volume,” Moose said. “That becomes really challenging when you’re trying to pull from 10,000 patients over a 30-mile, rural setting versus 10,000 patients over a half a mile setting.”
While rural pharmacies get a higher reimbursement rate for some prescription drugs, Moose said the difference is negligible and not enough to sustain a pharmacist’s salary.
“Pharmacists are expensive,” he said. “You’ve got to get a certain amount of volume just to cover that expense before you get into all the other stuff like the electricity and water bills, the rent and the insurance.”
Another challenge, Moose said, is attracting qualified pharmacists to rural communities, which may be seen as less desirable places to live.
“If a person’s invested a ton of money in their education to become a pharmacist, do they want to go back to a rural area Or do they want to be in a city like Charlotte, Raleigh or Greensboro?” he asked.
Reimbursement woes
Moose believes many of the financial issues plaguing rural pharmacies can be traced back to pharmacy benefit managers.
These companies set the reimbursement rates for prescription drugs. They also decide which drugs are covered by health insurance plans and where those drugs can be dispensed — often with little government regulation.
States have been reluctant to regulate pharmacy benefit managers, but some states have started. This year, 12 state legislatures made moves to rein in pharmacy benefits managers, according to a report in Politico, with more anticipated after this fall’s election.
“If you want to pinpoint one thing that has led to closures, it’s that the hands of pharmacies are tied on the amount of money that they can charge,” Moose said. “Somebody tells them how much they can charge and how much they’re going to get reimbursed, and that number keeps ratcheting down every year. It’s consistently declining.”
“Legislatively, we need to make their activities more transparent so people can see the cost of things and see where their dollars are going,” he said.
Moose isn’t the only rural pharmacist who wants to rein in pharmacy benefits managers. Carpenter, who directs a rural pharmacy research network that includes more than 150 pharmacies, said the network’s members identified the companies as a top financial threat in a recent survey.
“Pharmacies get reimbursed less than what they pay for these prescriptions,” she said of the rates set by the pharmacy benefit managers. “On some brand name medications like Ozempic, a pharmacy can lose up to $100 per prescription to dispense it.”
And many contracts with the pharmacy benefit managers require local pharmacies to dispense a medication, even if it’s a money-losing proposition.
“They’re having to take a financial loss on the medication,” Carpenter said.
If that hemorrhaging of money cannot be stemmed, Carpenter and Moose say, more rural pharmacies are likely to fold.
Some of these at-risk establishments may convert to alternate dispensing sites, which is what RUPRI said happened to the pharmacy at Crescent Foods in Faison. These facilities are more specialized and limited in their operations, according to RUPRI.
Others, like Creech Drug in Selma and Owen’s Pharmacy in Tryon, could simply shutter.
“In rural communities, it’s particularly negatively impactful when a pharmacy closes because people know their rural pharmacists,” Carpenter said. “It’s not like an urban CVS where somebody walks in, gets their prescription and leaves without even exchanging names.
“These are folks that have significant relationships with their customers that are coming in. They know their customers’ families. They know their names.”
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