Drug Stores & Pharmacies

Industry Profile Report

Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters

Industry Overview Industry Structure, How Firms Opertate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.

Call Preparation Quarterly Insight, Call Prep Questions, Industry Terms, and Weblinks.

Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.

Industry Profile Excerpts

Industry Overview

The 19,200 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.

Industry size & Structure

The average drug store and pharmacy employs 15 workers and generates $15-16 million in annual revenue.

    • The drug store and pharmacy industry is comprised of about 19,300 retail or mail order pharmacy firms that operate over 44,000 stores, generating $301 billion in revenue, and employing 669,000 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.
                                Industry Forecast
                                Drug Stores & Pharmacies Industry Growth
                                Source: Vertical IQ and Inforum

                                Coronavirus Update

                                May 8, 2022 - New COVID-19 Cases Increase Again
                                • Americans may feel less comfortable about going to physician offices as the number of new COVID-19 cases increases, and the number of prescriptions written may decrease as a result. New COVID-19 case rates increased in early May, with the seven-day rolling average increasing to roughly 72,300 on May 7, up from 58,000 on May 1 and 30,000 cases per day on April 8, according to a New York Times COVID-19 case tracker. Experts note that the American population has different vaccination rates, levels of previous exposure to the virus, and degrees of underlying health conditions, so the trajectory of new cases could vary. Analysts note that the data regarding new cases are getting less reliable as the public testing infrastructure continues to wind down and home test results are less likely to be reported to officials.
                                • The Centers for Disease Control and Prevention (CDC) said in late March that certain immunocompromised individuals and people over the age of 50 who received an initial Moderna or Pfizer-BioNTech booster dose at least four months ago are now eligible for another shot of either vaccine. The CDC also said that adults who received a primary vaccine and booster dose of Johnson & Johnson's Janssen COVID-19 vaccine at least four months ago may now receive a second booster dose of either the Moderna or Pfizer-BioNTech COVID-19 vaccine. The moves follow the Food and Drug Administration's authorization in March of the second booster doses.
                                • People who test positive for COVID-19 would be eligible for a free course of antiviral medicine under a “test to treat” program announced by President Biden. The proposal has been hailed as a potential breakthrough by some doctors, who say it will make it far easier for people at heightened risk of severe disease to get the lifesaving drugs quickly — especially for those who don’t have regular doctors. But the American Medical Association is critical of the plan, saying that prescribing decisions should be made “under the guidance and supervision of physicians with expertise to deal with complex medications.”
                                • The Centers for Disease Control and Prevention is not changing the definition of "fully vaccinated," but is instead "pivoting the language" to get people "up to date" on their vaccinations, CDC director Rochelle Walensky said. Demand for booster shots may have increased if the definition was changed to include them. "If you are eligible for a booster and you haven't gotten it, you're not up to date and you need to get your booster in order to be up to date," Walensky said. "What we really are working to do is pivot the language to make sure everybody is as up to date with their COVID-19 vaccines as they personally could be," Walensky added. Booster doses of Pfizer-BioNTech and Moderna vaccines significantly reduce hospitalizations from Omicron and reduced the likelihood of a visit to an emergency department or urgent care clinic, CDC data show.
                                • Retail pharmacies are playing a critical role in the vaccination process, according to officials from the National Association of Chain Drug Stores (NACDS). "Based on conservative assumptions, pharmacies have the capacity to meet the demand for 100 million vaccine doses in one month," NACDS president and CEO Stephen Anderson said.
                                • Sales in the health and personal care retailing industry, which includes drugstores and pharmacies, were unchanged in value month over month on an adjusted basis in December 2021 but increased 9.5% in value year over year on an unadjusted basis during 2021.
                                • Dollar General has hired a chief medical officer for its planned move into healthcare. Customers will initially see more health products on shelves, such as cold and cough medication and dental supplies. The company has also piloted new ways to provide medical care. It offered free COVID-19 testing in June at select locations through a partnership with the Virginia Department of Health. The Centers for Disease Control and Prevention (CDC) said it was in talks with the company about turning stores into COVID-19 vaccine sites, though the CDC and Dollar General have yet to announce any official plans.
                                • The US Department of Health and Human Services authorized licensed pharmacists to order and administer FDA-approved coronavirus tests, including serology tests.
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