Pharmacy Deserts Offer Unique Challenges and Opportunities


October 22nd, 2019

Pharmacy deserts describe areas where there is limited access to prescription filling. Explore why these matter and how data could be the solution.

pharmacy desert

In the modern world, where it seems almost everything is immediately accessible, that’s not always the case with prescription medications. Pharmacy deserts describe areas where there is limited access to prescriptions. While you may think they exist only in rural areas—that’s not the case. Research has shown that pharmacy deserts exist in metro areas like Chicago, Philadelphia, and Los Angeles. They present both unique challenges and opportunities.

Majority of Americans Live Near a Pharmacy

According to NACDS, 92% of the U.S. population lives within five miles of a pharmacy. Five miles may seem nominal to must, but it can be a struggle for those without transportation. In these areas, there may be inconsistent public transportation, or a host of other reasons make those few miles seem almost impossible. 

So, what are the alternatives in these situations or pharmacy deserts?

For chronic medications, many patients turn to mail-order services, including PillPack. They prefer the convenience and may also be able to get 90-day supplies more easily with this channel.

There are also alternatives to get to a pharmacy with rideshare options. Both Uber and Lyft are already participating in providing transportation to medical appointments and non-emergencies. It only makes sense that patients might use them to get their meds, especially if they have just had an office visit. 

Uber recently noted that they plan to expand Uber Health with the delivery of medications. Both chain and independent pharmacies offer delivery as well, but this may only be in larger metro areas and usually comes with a cost.

Who Is Most Underserved?

 According to theCDC, 48.9% of Americans take at least one prescription medication daily. These numbers are likely to increase as the population ages on top of an increase in chronic illness diagnoses. 

Because there has been much consolidation in retail pharmacy as well as independent pharmacies that have shuttered due to competition, accessibility is not a guarantee in the 21st century. 

Studies have estimated that over 100 million Americans may not have adequate access to pharmacies, while another 100 million have challenges getting to a pharmacy. Much of this is due to economics. Areas in the country that are below the poverty line, and have more residents that are on Medicaid, Medicare, or are uninsured, typically have less accessibility to pharmacies. 

Why Are There Pharmacy Deserts?

pharmacy deserts 2

While less availability to healthcare isn’t new in rural areas, as sparse populations don’t support multiple retail businesses; pharmacy deserts are a relatively new phenomenon. Much of it can be tied to the closure of independent pharmacies.

According to the Rural Policy Research Institute, 1,231 independently owned rural pharmacies closed between 2002 and 2018. This change equates to 16% of the total rural store count. 

When these rural pharmacies close, there aren’t usually any alternatives, creating instant pharmacy deserts.

These closures can be due to acquisition by larger chains that simply transfer patients to their location, which may or may not be convenient for the patient. Their inability to stay open is also linked with reimbursement, specifically Medicaid and Medicare Part D. While Medicaid spending has increased in some states, much of that money is wiped out before hitting the pharmacy level. 

Independent pharmacies are the only closures. Large retail chains are consolidating and shuttering unprofitable stores. While the two biggest chain leaders have made closures, they are financially sound. The closures by struggling chain Rite Aid have made more of an impact on the pervasiveness of pharmacy deserts.

Closing the Gap

Pharmacy deserts don’t have to be a trend that continues. And the answer isn’t purely mail-order script fills. After all, most patients still desire in-store face-to-face pharmacy services, according to a J.D. Power survey on pharmacy customer satisfaction

However, satisfaction with pharmacy services applies only to those that can actually get to one. Regardless of where patients live, they should have accessibility to pharmacies. So, what’s the solution?

One possibility is new financial incentives for pharmacies in underserved areas via the Federally Qualified Health Centers (FQHC) subsidies. Most FQHC’s are, however, without a pharmacy. NCPA (National Community Pharmacists Association) is involved as well, pushing for better pharmacy access at both state and federal levels. 

Some states are increasing dispensing fees and improving accessibility to help independent pharmacies. States with programs include Oregon, California, Arkansas, Louisiana, and Virginia. With reimbursement being the leading cause of pharmacy deserts, these states are taking a proactive approach.

Telepharmacy is another opportunity. Telepharmacy works to help the underserved in both rural and urban settings. Telepharmacies are being opened in FQHCs, helping control skyrocketing delivery costs when patients are substantially far away. 

When a town has an FQHC but no pharmacy, it impacts the patient’s ability to get the care and treatment they need. Telepharmacy creates an opportunity to turn a pharmacy desert into a profitable business that offers better availability. The biggest reason why the costs are lower with a telepharmacy is that the heftiest expense, the pharmacist, is out of the picture.

Can Pharmacy Deserts Become Obsolete with Better Data?

pharmacy desert data

At the root of any pharmacy’s ability to remain competitive and in business is understanding its data. Key metrics could provide pharmacies with insights on the demographics of their patients, including where they are located and which payer they use. 

By tracking pharmacy analytics, independent and chain pharmacies can determine trends that may help them be more agile in their service model. This flexibility can ensure profitability, allowing them to remain open to serve those patients who need them most.

Want to see where pharmacy analytics can take your business? Get in touch today to explore how we can help.

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