Drug Stores & Pharmacies

The 18,857 Drug store and pharmacy firms in the US are the primary channel for selling prescription drugs. Mail order pharmacies typically sell only prescription drugs, while retail drug stores usually market a large number of other drug and non-drug products, and may offer several healthcare-related services. Both retail drug stores and mail order pharmacies may act as Prescription Benefit Managers (PBMs), designing and administering prescription drug benefit plans on behalf of private employers, unions, insurance companies and other benefit plan providers.

Reduction in Prescription Drug Reimbursement

Sales of prescription drugs reimbursed by third party payers, including the Medicare Part D plans and state sponsored Medicaid agencies, typically represent over 95% of drug store and pharmacy prescription revenues.

Increased Government Regulation

Prescription drug pharmacies are subject to rapidly changing and increasingly complex government regulations at the federal, state and local levels.

Sep 2, 2026 - President Trump Strikes New Drug Pricing Deal

• President Donald Trump announced in late August drug-pricing agreements with nine more pharmaceutical companies. The agreements expand a program that President Trump says will save Americans more than $600 billion and mark the largest drop in prescription drug prices in US history. Lower pharmaceutical prices may increase foot traffic at drugstores and pharmacies. The nine new companies join 17 larger drugmakers already under agreements, bringing the total to 26 companies covering roughly 90% of the US pharmaceutical market. The nine companies agreed to provide discounts on outpatient drugs to every state Medicaid program so that prices states pay align with what companies charge in foreign countries. The agreements impact drugs that treat several chronic and rare diseases, such as hemophilia, liver disease, skin conditions and certain forms of cancer.
• Fewer than half of Americans (49%) can consistently afford the care and medications they need, according to the latest West Health-Gallup Healthcare Affordability Index. Drug stores and pharmacies may be negatively impacted by decreasing health care affordability. The share of adults who are “cost secure” has decreased from a 2022 peak of 61%, and an estimated 2.8 million more people fell out of that category between 2024 and 2025 alone. Cost insecurity now reaches groups long considered insulated: just 61% of adults 65 and older are cost secure, down from 73% in 2021.
• Many drug store and pharmacy firms are under financial pressure as ongoing challenges persist into 2026, according to The Street. Walgreens plans to close roughly 1,200 stores through 2027, while CVS closed about 270 locations in 2025. Independent pharmacies are twice as likely to close and are often excluded from preferred pharmacy networks. Small, independent pharmacies say that reimbursement rates from pharmacy benefit managers are falling below their costs, according to First Alert 4. Pharmacist Jerry Callahan, owner of a The Medicine Shoppe in Pacific, Missouri, said that he has to buy name-brand medications directly from drug manufacturers, often paying thousands of dollars up front, but when a pharmacy benefit manager reimburses him for filling the prescription, it’s often less than what he paid to get it. A common asthma medication, for example, costs more than $600 but reimbursement is $30 under cost, according to Callahan. About a third of America’s pharmacies have closed since 2010, amounting to an unprecedented decrease in neighborhood drug stores, according to Powers Health. Store closures accelerated in 2018, primarily driven by closures among chain pharmacies during a period of consolidation in the industry, Powers Health reported.
• The prices that drug stores and pharmacies charge for their products increased slightly during the first eight months of 2026, according to the US Bureau of Labor Statistics (BLS). Drug store and pharmacy employment decreased slightly and wages for nonsupervisory employees increased slightly during the first seven months of 2026, according to the BLS.

Industry size & Structure

The average drug store and pharmacy employs 38 workers and generates $18 million in annual revenue.

• The drug store and pharmacy industry is comprised of about 18,857 retail or mail order pharmacy firms that operate over 42,700 stores, generating $336 billion in revenue, and employing 709,800 people.
• About 39% of stores have less than 20 employees, and 29% have fewer than 10 employees.
• Three large chains dominate the retail drug store segment (CVS Caremark, Walgreens, and RiteAid).
• Express Scripts dominates the mail order segment.