Profitability, third-party reimbursement, and access to community pharmacies

The purpose of this study was to analyze the extent to which third-party reimbursement programs have affected the profitability and availability of community pharmacies. Data were taken from records maintained by the Virginia Board of Pharmacy and a survey of 177 community pharmacies. Between 1989 and 1994, 258 outpatient pharmacies opened and 342 closed. Chain and independent pharmacies suffered net losses, and supermarket and mass merchandiser pharmacies experienced net increases. Few significant changes occurred in the distribution of pharmacies over the study period. Fifty-nine chain and independent pharmacies and 1 supermarket pharmacy chain provided usable profit and reimbursement data. These pharmacies experienced declines in profits and increases in the percentage of prescriptions reimbursed by private third-party prescription programs over the last several years. Regression analyses indicated that higher ratios of sales of private third-party prescriptions to private-pay prescriptions were associated with lower profits. All respondents indicated that changes in private third-party reimbursement had substantially reduced profits over the past 5 years. The results indicate that the growth of private third-party payment has led to lower pharmacy profits but has not yet resulted in problems of consumer access.