The looming pharmacy crisis in America

Pharmacists at major chain stores like CVS and Walgreens are at a breaking point.

Many workers have staged walkouts, saying they are overworked, understaffed and risking patient safety.

Today, On Point: The looming pharmacy crisis in America.

Guests

Shane Jerominski, practicing pharmacist. Advocate who helped organize the recent walkouts at big chain pharmacies.

Sara Sirota, policy analyst at the American Economic Liberties Project, with a focus on monopoly power in health care.

Also Featured

Dr. Craig Cox, president of the American Association of Colleges of Pharmacy.

Transcript

Part I

NEWS BRIEF: Across the country, pharmacy workers are walking off the job to protest what they call unsafe working conditions at some of the biggest retail chains.

MEGHNA CHAKRABARTI: Earlier this year, thousands of workers walked off the job at CVS and Walgreens stores in 15 states, including New York, Pennsylvania, Connecticut, Florida, Texas, and Illinois.

The action was dubbed ‘pharmageddon.’ A protest by pharmacists against what they say are unreasonable and unsafe working conditions at the biggest chain pharmacies in the United States. One of their major concerns, understaffing. Protesters say the issue isn’t a shortage of pharmacists or pharmacy techs.

But a shortage of workers who want to do these jobs at big chain retail stores, where they say workers are already burning out. According to the American Pharmacists Association, the industry has approximately 7,500 job openings for pharmacists and 25,000-plus openings for pharmacy tech. Now, pharmacists are highly educated and highly trained specialists who provide medications to just about everyone in the United States, which means the shortage of qualified workers could also have an impact on just about everyone in the United States.

So how did we get here? What’s driving the changes that pharmacists say they’re experiencing in the nation’s largest corporate and retail pharmacies? That’s what we’re going to look at today.

And we’ll start with Shane Jerominski. He’s been a practicing pharmacist in Southern California for 16 years, has worked at the big chain stores like Walgreens and CVS, and now works for an independent pharmacy.

He also helped organize the walkouts earlier this year. Shane, welcome to On Point.

SHANE JEROMINSKI: Thank you for having me, Meghna.

CHAKRABARTI: Can you describe to me the worst day or one of the worst days that you had as a pharmacist when you were working at CVS or Walgreens?

JEROMINSKI: Oh, for sure. I started my career with Walgreens back in 2007.

And at that time, there was an actual real shortage of pharmacists in Southern California. So there were new pharmacists from all over the country, but all of them were immediately thrown into roles of pharmacy managers, where essentially, you’re responsible for everything. You’re responsible for maybe another pharmacist, as well as multiple technicians.

And during one of my first years there, during the swine flu epidemic, we, myself and one other pharmacist, did over 2,000 flu shots in the course of a few months. But that first day, we did about 150 flu shots, with 50 pneumonia vaccines, with one technician and two pharmacists there, with overlap for just a couple hours.

So we had lines throughout the door. This was in a busy pharmacy in Southern California, two lanes of drive-through. A golf cart drive-through lane. So when you have that many extra duties, along with just safely and accurately checking prescriptions, anyone can feel overwhelmed. And you just feel like a mistake is imminent.

CHAKRABARTI: Wow. That is a lot for a single day. But couldn’t one come back and say that was under sort of a potential epidemic scenario, and there was this, a huge spike in demand from people who wanted vaccinations? And how does that compare to what was the norm for you at CVS or Walgreens?

JEROMINSKI: For sure.

So during those first few years, there was a flu shot season, and even during the swine flu epidemic, which did see an increase in demand, the business model has changed to all vaccinations, all day, every time. You can make appointments, you can have walk ins, and that seems to be the central focus of most of these pharmacies now, because the margins are so much better on vaccinations.

It’s almost like filling prescriptions safely and accurately is now an afterthought. Because these chain pharmacies are in love with the margins associated with vaccinating.

CHAKRABARTI: Okay. Wow. Actually, now that you mentioned that, Shane, I’m just thinking on my neighborhood chain pharmacies. And there are sort of “Get your vaccine now” posters up year-round, which I guess, several years ago, I hadn’t noticed that. But what about if there’s a steady increase in demand or even a sharp temporary increase? I guess the real question is, did the company adjust staffing to keep up with the increase in demand?

JEROMINSKI: No. I think that the company is doing a terrible job at really staffing appropriately. And as you mentioned, there’s lots of open jobs out there. And it’s not a shortage of pharmacists or a shortage of pharmacy technicians, but a shortage of pharmacists and technicians willing to practice in these settings. There’s a lot at risk for a pharmacist when a medication error occurs.

And after all of that education, you don’t want to put your license at risk working for a company where you don’t feel like you’re supported.

CHAKRABARTI: We did reach out to CVS and Walgreens and several other big pharmacy companies across the United States, and CVS sent us back a response to some detailed questions that we emailed them. And first of all, they did say that they employ more than 30,000 pharmacists and 70,000 pharmacy technicians and that revenues for the company from their pharmacy business comprised about 77% of CVS’s overall revenue. So there’s indication that it’s a huge or the biggest part of their business.

I’m going to add another little wrinkle here for context. And those were revenue percentages I gave you. In terms of actual dollars, CVS Pharmacy and Consumer Wellness, that segment of their business, in 2022 brought in about $28 billion in revenue. So that’s a dollar figure. But when you take into account their costs, their overall profit was $1.4 billion, when adjusted again for operating income.

So a significant part of CVS’s business, which is why they told us in their statement, Shane, that they’re committed to providing access to consistent, safe and high-quality health care to patients, and they are making targeted investments to address pharmacy teams’ key concerns. What’s your response to that?

JEROMINSKI: I’m sorry, Meghna. I actually lost you there for a few minutes, but I did get the end of that. So it’s great. It’s most of the talking points that we hear pretty regularly. That they’re making these investments, but that doesn’t really set well with a lot of pharmacists who are there combating this every single day.

You have, CVS has taken overlap almost out of every store. So in most places, there’s a pharmacist, one pharmacist behind the counter working a 12- or 14-hour shift and everything that leaves that pharmacy is squarely on their shoulders, whether it’s right or wrong. And they will not close a store if they have three call outs of technicians.

So there’s a lot of scenarios in this country. And the reason why the walkout started in Kansas City was because pharmacists were working alone. It’s essentially like running a McDonald’s by yourself.

CHAKRABARTI: Shane are you still with us?

JEROMINSKI: Yes.

CHAKRABARTI: Okay, good. I just wanted to be sure. So no matter what’s been happening, just to clarify what’s happening on staffing on a given day, they keep the pharmacy open.

That’s what you’re saying.

JEROMINSKI: Yeah. Okay. Yes. There’s no scenario where they would want that store to close, even if no one shows up except for the pharmacist. Because a pharmacist has to be there in order for the pharmacy to open. So the only way a store is closed is if that pharmacist doesn’t show up.

Everyone else can call out, but they’ll still stay open. We’ve had a ton of images of pharmacists that they decided to close the store and just have drive-through only because they were working by themselves.

CHAKRABARTI: Oh, okay. And is part of this that we have reached a place in American health care where people do expect to get a, if their doctor’s calling in a prescription to the pharmacy or putting it in online, people do expect to get it in an hour or so.

So there’s no imaginable scenario, which I think Americans would accept, that because of low staffing, their local CVS or Walgreens pharmacy has closed down for the day, right?

JEROMINSKI: For sure, and I think there’s just a misunderstanding of what filling a prescription entails, like you hear that so often, people joke about it, that you’re just putting pills from one bottle into another bottle, slapping a label on it and handing it to a patient.

But the adjudication process is not easy, when you’re billing something. There’s lots of things that could go wrong. Even if you get the prescription from the doctor’s office, whether it’s sent in electronically or a patient brings it in, you have to decipher that. You have to make sure it’s correct.

You have to make sure that all the necessary details are on a prescription to be able to fill it. You have to check it against the patient’s profile, bill that to the insurance. You may find out that it’s not covered. You can call the doctor’s office, try to do a prior authorization, or it’s a formulary switch, something that’s covered by their insurance.

So there are many steps, and you can imagine that in between those steps, if you’re doing COVID testing, vaccinations, counseling patients on over the counter medications, it’s required to counsel on all new prescriptions, as well. So there’s only one pharmacist that can do most of those tasks. That’s the reason why we’re being drawn in so many directions, and sometimes it takes more than an hour to fill your prescription.

CHAKRABARTI: Can you tell me a little bit more about how much time you had to spend, again, focusing on your time with the corporate pharmacies. How much time did you have to spend on the phone on average with insurance companies?

JEROMINSKI: Oh yeah. You’re spending a lot of time on the phone, not just with insurance companies, but transferring prescriptions.

I’m in the Palm Springs market out here, so … lots of snowbirds and seasonal visitors to the area. So every time you have to transfer a prescription from another pharmacy, if it’s not within your own chain, you have to get on the phone and ask the pharmacist to give you a verbal transfer or fax it over.

So you’re constantly on the phone, not just answering questions for patients. And then when a patient is expecting something, they might be calling 20 times a day, just to see if it’s ready, as well. So there’s a lot of time spent on the phone and there’s a lot of things drawing you in every direction.

CHAKRABARTI: Yeah. Can you tell me what was it that finally led you to leave your jobs with the corporate pharmacies and take up work at an independent pharmacy?

JEROMINSKI: Sure, so I worked for Walgreens right out of school. I ended up in the Palm Springs area because there were sign-on bonuses to come out here.

I liked working for Walgreens, but after about five years as a pharmacy manager, I got a cold call from Target Pharmacy. Target Pharmacy was an excellent place to work for. Their business model was a little different because they didn’t derive those 70% revenues from the pharmacy, like you had mentioned. So it was more of an afterthought for guests in the store.

Plus, it was a really great working environment. You could kill an hour in Target way easier than you could kill an hour in CVS. You didn’t have people staring at you and demanding that they need to get it done as quickly as possible. Halfway through my time at Target, CVS came in and acquired the Target pharmacies.

So now when you walk into Target, it’s a CVS pharmacy inside there. Change the culture, change the model. At this time, I started my social media account called The Accidental Pharmacist, now has about 125,000 followers on Facebook. But we have a presence on all the social media platforms. At that time, it was my creative outlet, but I did start talking about working conditions and safety concerns. And that’s when CVS said basically, “Find another job or shut the page down.” So I decided to find another job.

Part II

CHAKRABARTI: Shane, hang on here for just a second because I want to introduce Sara Sirota into the conversation.

Sara is a policy analyst at the American Economic Liberties Project with a focus on monopoly power in health care. Sara, welcome to the program.

SARA SIROTA: Hey, thanks for having me.

CHAKRABARTI: So what does the monopoly have to do with this issue that pharmacists are raising about their working conditions?

SIROTA: Yeah, so the monopoly issue really exists all over the place.

It’s important to look at the way that pharmacies buy drugs, and the way that they get reimbursed for drugs. And how that is driving a lot of the financial troubles that we’re seeing, not just at the big retail chains, but also at the small independent pharmacies across the country. So on the buying side, that market is driven by really three major wholesalers, McKesson, AmerisourceBergen and Cardinal that dominate the industry and are driving up costs for pharmacies that are acquiring the medications.

And then on the other end is the way that they get reimbursed through entities called pharmacy benefit managers that represent the insurance industry. And they, too, are represented by three major companies. Express Scripts, Caremark, and OptumRx. And they, too, hold monopoly power and are systemically under reimbursing pharmacies, potentially even below their costs.

And so this is creating a situation where pharmacies are stuck in the middle, and they’re not able to generate enough revenue and profit margin to stay in business, and that’s manifesting differently depending on the kind of pharmacy you have. So the small independent pharmacies simply can’t stay in business.

We see studies showing that they are being driven out. Thousands of independent small pharmacies have been forced to close, and that’s driving a lot of the distress that you alluded to. At the large pharmacy chains, the way they’re dealing with that is by cutting staff, by closing down stores. I think it’s interesting that you said CVS responded to an email saying that they are so invested in their pharmacies, and yet they are pledging to close hundreds of their pharmacies over the next few years.

So this is part of the problem that we’re seeing, this issue of monopoly and consolidation across the supply chain of the pharmacy business that are creating all of these economic problems.

CHAKRABARTI: Interesting. Just to read a little bit more from CVS’s response to our questions, they said, “We’re making targeted investments to address there being the pharmacy employees’ key concerns, including enabling teams to schedule additional support as needed, enhancing pharmacist and technician recruitment and hiring and strengthening pharmacy tech training.” They say they’re rolling out these changes or they started rolling out them last month in November and will continue through to next year. So repeatedly in their statement, they assured or tried to assure us that they’re listening to the concerns coming from the pharmacy employees.

As you heard Shane a little bit earlier, Shane just doesn’t see evidence of that, but do you think that some of the changes that CVS, for example, says it’s making are going to make a meaningful difference, Sara, in these underlying drivers?

SIROTA: Yeah, I don’t see them addressing those underlying issues of the wholesalers, the pharmacy benefit managers and also this issue generally of CVS and Walgreens closing down pharmacies and relying more on their mail order pharmacy and more on their other subsidiaries as highly diversified companies.

CHAKRABARTI: So let me ask you one quick thing. Just to be clear, because the world of pharmacy services, anything related to American health care is extremely confusing. I’m a visual learner, so I want to be sure I understood what you said. So that we’ve been seeing a consolidation in the endpoint pharmacies, right?

The corporate pharmacies, because as you said, they’re driving the smaller independent ones out of business. Then regarding the pharmacy benefit managers, you said there’s only, did I hear you right, when you said there’s only three companies there?

SIROTA: There’s three companies that pretty much own about 80% of the market.

CHAKRABARTI: Okay, across the United States.

SIROTA: Across the United States.

CHAKRABARTI: Repeat to me again what you said about wholesalers as well.

SIROTA: Similarly, that there are three major companies that control the majority of that market, and they’re driving up costs, PBMs are driving down the reimbursements, and pharmacies are getting squeezed in the middle.

CHAKRABARTI: So there’s been an overall like narrowing of the pipeline from the beginning, where wholesalers are receiving the medications, all the way to the end point, which is you, me, Shane, everyone who needs drugs.

SIROTA: Yes.

CHAKRABARTI: Okay. Wow. One more question about details here. You mentioned Caremark, right? Which I understand is actually CVS Caremark.

SIROTA: Yes. And great to point that out. So part of this whole problem is that all of these companies are very vertically integrated, as we call them. And Caremark is the largest pharmacy benefit manager, and it is owned by CVS, which is the largest pharmacy chain. So that means that independent pharmacies are getting reimbursed by Caremark, which also has an interest in driving them out of business so that its CVS Pharmacy stores can have more business.

This is a pretty blatant conflict of interest that would not really stand in any other industry. Because health care is rather corrupt, if I must say, we allow this to happen here.

CHAKRABARTI: Oh, because I was wondering. Is Caremark also, they must be having differential pricing based on the end pharmacies that they’re selling the drugs to, right?

Because I was wondering, like, why would they want to drive out their own CVS pharmacies out of business?

SIROTA: Yeah, I think part of this is also that they own a large mail order pharmacy, so that’s part of the problem, too, is that through their pharmacy benefit manager, in addition to excluding independent pharmacies from their networks, they can also basically force insurance members to go to their mail order pharmacies and rely less on their brick-and-mortar stores.

CHAKRABARTI: Okay, Shane, thank you for listening along with me. Because like I said, the web here, it’s hard to keep track of all of it. So I wanted to get Sara to explain stuff a couple of different times.

These are things that you already know well, I’m sure, about Shane. What did this sort of narrowing of the pipeline look like from your perspective as a pharmacist?

JEROMINSKI:  I see the product of this every day, working in an independent pharmacy. Independent pharmacies are dying across the country because of reimbursements, predatory audits and the pharmacy benefits managers.

A lot of drugs, especially brand name drugs, get reimbursed below cost. So that’s an unsustainable business model for any small business owner. Usually, the only way that these independent pharmacies can survive is to find a specialty niche market. The independent I work for currently services skilled nursing facilities, personal care homes, does hospice patients, some of those things that the regular chain pharmacies do not want to be involved with.

But it’s very difficult to have an independent pharmacy. And that’s the reason why I would say if we don’t have wide scale PBM reform, 10 years from now, there’ll be very little independent pharmacies left.

CHAKRABARTI: Yeah. Pharmacy benefit managers are one of the sort of less understood parts of the American health care system that I haven’t gotten my head fully around yet, so I’m thinking we need to do some explainer shows about that.

But let me just play some feedback that we got from one On Point listener. Karen Hendricks of Charleston, South Carolina. Now she told us she was a pharmacy intern, a pharmacy tech, and a professional pharmacist for 37 years, and that over the past decade, working conditions at the big chain pharmacies where she was at got progressively worse, and in her opinion, it all came down to money.

KAREN HENDRICKS: Worked 12-hour days, nights, weekends, holidays. I was lucky if during the day I had time to sit, eat, or even use the bathroom. The constant barrage of prescriptions, phone calls, audits, customer questions, vaccines, and insurance problems never stopped. If I had any tech help, I was lucky. I was so burned out I left five years ago and never looked back.

It feels as if I did 30-years hard time in prison. I’m now an insurance adjuster with my husband and I live a very free and happy life.

CHAKRABARTI: Shane, can I just turn that back to you quickly? How does that land with you, what Karen said?

JEROMINSKI: That’s a standard line that we hear a lot. We get thousands of direct messages to The Accidental Pharmacist page on a regular basis, whether they’re pharmacists who’ve done 30 years, or pharmacists right out of school that don’t realize that they just feel very trapped with hundreds of thousands of dollars’ worth of student loans and a job that they just don’t understand.

They can’t even see what life is going to be like for the next 30 years, working in these conditions. And a lot of it has to do with the ancillary support staff, that the one thing that I think we haven’t talked about yet is technicians are the backbone of every pharmacy in America.

And the biggest problem, why there’s so many openings, is that the pay scale just is not commensurate with their skillset. And they’re the ones who are, they really are the true frontline workers, pharmacy professionals. They’re the ones that are dealing with angry patients. They’re the ones taking in prescriptions and really putting out fire after fire.

And when you’re only making 17, the Bureau of Labor and Statistics has the average pharmacy technician in America making $18.12 an hour. And it’s a very stressful job for that, when you could work down the street somewhere else for the same amount of pay.

CHAKRABARTI: Now, my personal experiences with pharmacies are purely anecdotal to me.

I’m not saying that they’re representative at all of larger trends in America, but over the past few years, every time I’ve walked into my local pharmacy, happens to be a CVS, I’m seeing a lot of tired faces behind the counter, more and more. And some of those folks just have to stay on the phone while the line for people waiting for their prescriptions gets ever longer.

But the professionals behind the counter just on the phone dealing with insurance companies or the kinds of other things you described, Shane, and even, I would say we’re somewhat fortunate in my neighborhood because there are many techs and the pharmacists like working on prescriptions while all this is going on, and it’s still a painful process for everyone.

Now Shane, you mentioned something which I want to just pick up on, about future pharmacists, right? And looking at working conditions right now, because, as you mentioned, it takes a ton of education to become qualified to be a pharmacist in the United States. And it just so happens that between 2011 and 2021, the number of students applying to pharmacy schools has declined by more than a third, by 36%.

Dr. Craig Cox is president of the American Association of Colleges of Pharmacy, and he says it’s very concerning, and this is what he identified as the biggest driver of the decline.

DR. CRAIG COX: There really are high stress workplace conditions, and staffing shortages in corporate community pharmacies that are discouraging young people from considering a career in pharmacy in general.

And the reason for that is that this really is the most visible sector of our profession, community pharmacy. People do this often. And I think because of it being the most visible sector, that’s what our future students see. And when they see these high stress workplace conditions, I think that’s having an impact on them.

And it’s discouraging them from picking this career.

CHAKRABARTI: Dr. Cox told us that in 2018, There were about 15,000 pharmacy graduates in the United States, and the projection for 2026, so just a couple of years from now, is about 9,000 graduates, so a 6,000 drop for future pharmacists. Sara Sirota, I just wanted to get a sense from you, your response of this kind of downstream effect that apparently we’re seeing in terms of people wanting to go into the business.

SIROTA: Yeah, I think it’s very telling. Pharmacy schools were booming 20 years ago now people are not interested in going to pharmacy school. Because they see the kinds of conditions that are imposed. Both at the retail chains and also the inability of small pharmacies to survive under the current economic problems that they’re facing.

And this is a huge problem. It’s important to emphasize that for a lot of communities, their pharmacists are their first line of access to the health care system. Many communities don’t have doctors nearby, but they do have pharmacists. And those are really important and trusted health care advisors to them, providers to them.

And they’re being neglected right now. And it’s important to note this.

CHAKRABARTI: Once again, we did reach out to many of the biggest pharmacies in the United States. Rite Aid did not respond to our request for comment or answers to questions. Costco did not respond either. Walmart did return our calls and told us that Walmart does not break out revenues from the 5,000 pharmacies it has.

They say most of their pharmacies are in rural areas. And Walmart also told us that their company’s health and wellness business are about 11% of Walmart’s total U.S. revenue last year. So that’s an interesting comparison compared to the 76%, 77% of revenues that we see from CVS.

Now, Walgreens did respond to us, sent us a statement talking about how much they’re trying to they value pharmacists and what they are trying to do to assist their concerns about working conditions. They also answered a question that we had about whether there are quotas that pharmacy, pharmacists are expected to have and before I get to their response, Shane, did you experience quotas or a minimum number of prescriptions that you had to fill every day when you’re working at CVS and Walgreens?

JEROMINSKI: Yes. So when I worked for the company, quotas were still tied to your pay, to your evaluation, to the bonus that you might receive. And they always had really high vaccination quotas. I worked at a store that did 2,300 vaccines, and the next year my goal was 6,000. So that gives you the perspective of how much they’ve ramped up what’s expected and these quotas.

California just recently passed … SB 62, two years ago, which took quotas being attached to pay and bonuses. But it’s not that they don’t have these metrics anymore. The metrics are used more so to put pressure on the front of the store and dangle hours, technician hours and budget hours.

So they don’t tie it specifically to pay and bonuses, but those metrics are used, and quotas are used to determine how many hours you’re going to get in the pharmacy. So everyone’s concerned about hitting these anyway, because they want to make sure that they have enough tech support and hours attached to their pharmacy.

CHAKRABARTI: Interesting. Because Walgreens in their response to our questions about this said that in October of 2022, Walgreens announced that, quote, “We are removing task-based metrics from performance reviews for all retail pharmacy staff. A significant step is. Because we are the first and only retail pharmacy to do which helps create a differentiated working environment while supporting pharmacists’ ability to focus on patient care,” end quote.

And as for CVS, when we asked them about quotas, CVS said in a statement, quote, “It is inaccurate to characterize them as quotas. While we’ve reduced the number of metrics we measure in recent years, the information gleaned from safety and quality metrics provides us with a clearer picture of what’s working and where improvements may be needed.”

And then they went on to say, “Our use of metrics mirrors what’s commonly used throughout the health care industry.” So we’re going to talk more about what the pharmacy crisis says about the health care industry overall. And of course, we’re going to try and see. Or at least explore what the potential fixes are.

This article was originally published on WBUR.org.

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