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Completing pharmacy residency programs, including the first year (PGY1) and second year (PGY2), results in significant short-term income loss compared to entering practice directly. This financial impact is crucial for evaluating mandatory residency policies.

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Area of Science:

  • Pharmacy education
  • Health economics
  • Pharmacist workforce development

Background:

  • Pharmacy education increasingly emphasizes clinical training and postgraduate residency.
  • PGY1 (Post-Graduate Year 1) pharmacy residency is optional but faces growing pressure for expansion.
  • Understanding the financial implications of residency is vital for policy decisions.

Purpose of the Study:

  • To evaluate the financial impact of pharmacy residency training on early-career earnings.
  • To compare cumulative income across different career pathways: no residency, PGY1, and PGY1+PGY2.
  • To quantify the opportunity cost associated with completing residency.

Main Methods:

  • A model-based analysis using national pharmacist salary data.
  • Calculated cumulative earnings over five years for three pathways.
  • Included average earnings without residency and stipends for PGY1 and PGY2.

Main Results:

  • Pharmacists without residency earned the most cumulatively ($634,950) over five years.
  • PGY1 resulted in a $66,990 (10.6%) income loss; PGY1+PGY2 resulted in a $128,980 (20.3%) loss.
  • The additional PGY2 year represented a further $61,990 reduction in earnings.

Conclusions:

  • Pharmacy residency training leads to a significant short-term financial loss compared to direct workforce entry.
  • Mandatory PGY1 training would impose this financial burden on all graduates without system capacity.
  • Expanding residency positions, preceptors, and funding is necessary for a universal PGY1 requirement to be beneficial.