Some independent community pharmacies are thriving through expanded clinical services and service areas in Eastern Washington, while some large retail chain pharmacies are confronting headwinds, namely bankruptcies and store closures.

Dr. Julie Akers, executive associate dean at Washington State University College of Pharmacy and Pharmaceutical Sciences, says the health care industry is seeing a resurgence of some independent pharmacies that have transitioned to provide clinical services and, "they're not just surviving. They're thriving."

Erik Nelson, who owns three pharmacies in Eastern Washington, concurs with Akers and says his pharmacies are growing through innovation.  

Nelson owns Sixth Avenue Medical Building Pharmacy Inc., which does business as Sixth Avenue Pharmacy, at 508 W. Sixth, in Spokane. He also owns First Pharma Associates LLC, which does business as Koru Pharmacy, at 1802 N. Monroe, in Spokane, and Suncrest Pharmacy Group LLC, which does business as Suncrest Pharmacy, at 5919 U.S. Highway 291, in Nine Mile Falls.

Those pharmacies are part of a network of 34 independent pharmacies, dubbed Cascadia Pharmacy Group, that helps pharmacies expand services through collective bargaining for the price of drugs and other goods.

"It allows us to compete on similar playing fields to the big box stores," Nelson says.

He says locally owned pharmacies are competing by offering services that chain retailers aren't providing, such as personal home delivery, compliance packaging, and medication compounding.

New weight loss drugs on the market are boosting consumer demand for compounded formulas, he adds.

"Our main goal is to bring convenience to the patient," he says.

Outside of dispensing medication, the pharmacies offer point-of-care testing, where a customer can get tested, diagnosed, and prescribed medication in one visit. The pharmacies also provide other immunizations, travel vaccines, monthly blood pressure monitoring, and wellness consulting.

Koru Pharmacy goes further by offering consumers access to an infrared sauna, a red-light therapy room, a variety of licensed, therapeutic-grade supplements, and has a registered dietician on staff.

The Suncrest Pharmacy location, which opened in 2019, is the only pharmacy serving the rural community, Nelson says.

As other pharmacies close or go out of business, Nelson's companies are growing, he says.

To meet the strong demand for pharmacy services, he's planning to open a new store next year in North Idaho.

Meanwhile, three large pharmacy chains—Philadelphia-based Rite Aid Corp.; Walgreens Boots Alliance Inc., of Deerfield, Illinois; and CVS Health Corp., of Woonsocket, Rhode Island—have closed thousands of locations combined nationwide due to changing consumer preferences and shopping habits, according to a report from CoStar News.

Akers says pharmacy retailers also are contending with challenges associated with a broken reimbursement model tied to medications instead of patient health care outcomes.

There is a growing momentum to shift toward value-based contracts for providers, which she explains are contracts tied to health care outcomes instead of compensating providers for the number of patients seen or the amount of time spent seeing patients.

That's driving more providers to hire pharmacists to refer their patients to for care, Akers says. 

"It's driving health care to what should be the core mission of keeping our patients healthy," she says.

Other headwinds facing the pharmacy industry here include a growing prevalence of pharmacy deserts, that are typically rural areas without access to pharmacy services, she explains. 

WSU's Pharmacy College is working with community pharmacies to close health care gaps for rural patients by advocating for expanded pharmacy care services in conjunction with primary care providers.

"For many of those rural communities, the pharmacist is the only health care provider in their community," Akers says. "Serving patients in that way (provides) quick, quality access to that care."

Mail-order prescriptions are one solution to increase rural pharmacy access, but the service has been disruptive to the health care industry, Nelson contends, adding that it has some advantages but also has presented some challenges.

Some patients who can't physically get to a pharmacy find mail-order services convenient, Akers contends.  

On the other hand, a growing number of patients, who would prefer to see a pharmacist, are mandated to receive their medications through the mail by their health care plans, she explains.

Some independent pharmacies can expect a drop off of in-store visits due to mail-order services, and for pharmacies that don't have a substantial inventory of other consumer goods or services, declining consumer visits can add financial pressure to the business and contribute to store closures.

"The mail-order pharmacy isn't providing a flu test or a COVID test," says Akers about how the service compares to independent pharmacies. "They're not giving senior patients their pneumonia vaccinations."

Medications sometimes can be compromised when delivered by mail as well, says Nelson.

"A lot of times those meds are sitting in a hot mail carrier truck or a mailbox and when inside of those containers it's not good for the product integrity," he explains.

The closure of pharmacies also is contributing to a workforce shortage across the pharmacy industry, both Nelson and Akers say.

"I could hire three or four people right now if I had good, qualified candidates," Nelson says, adding that a total of 45 employees work at his three stores.

As of May 2023, Spokane County had a total of 710 pharmacists, down from 730 pharmacists in May 2022, according to data from the U.S. Bureau of Labor Statistics.

From an academic lens, Akers says she's noticed fewer students are applying to pharmacy schools here and nationwide, causing a ripple effect in the industry that is struggling to keep up with community care. 

"We've seen an unfortunate trend post-COVID of less applicants. ... Many pharmacy schools have not been filling their full desired seats," says Akers.

WSU College of Pharmacy's 2024 graduating class had an estimated 97 doctor of pharmacy graduates, she says. There were 110 graduates in 2023, according to WSU's website.

One silver lining is that pharmacy students at WSU are learning about health care gaps and are optimistic about filling those gaps in their future careers, she adds.

"I'm seeing students who are change agents," says Akers. "They're not blind to the challenges they're seeing." 

Additionally, pharmacists in Washington state have been recognized as medical providers and billing specialists since 2015. That recognition provides an opportunity for a growing number of clinics and outpatient facilities to hire pharmacists into positions they weren't in before.

Some health care providers are hiring pharmacists to serve as patient care specialists for complex or chronic disease states, increasing employment opportunities for pharmacists, says Akers.

For instance, patients with diabetes who aren't meeting their health care goals often will be referred to a pharmacist who can spend more time explaining treatment therapies, such as medication or lifestyle modification and coaching to help patients reach their clinical goals, she explains.

"Those are kind of offsetting each other at the same time we've had a decrease in applications nationwide," says Akers. "We still definitely have a shortage."

The presence of sign-on bonuses for pharmacist jobs is another indication of a worker shortage, Akers says, adding that both community pharmacies and health systems have been offering hiring incentives for a few years.

"They're not getting a strong applicant pool or the quantity of applicants that they've seen in the past, so they're having to use (bonuses) as a way of enticing applications," says Akers.

Going forward, Nelson says he plans to remain an independent pharmacy operator and will build and expand in ways that make sense for his customers.

"We really pride ourselves on high quality customer service, and I think people will seek us out because of that," he says. "We're busier than ever trying to keep up."