Tim Kosty, R.Ph., and Don Dietz, R.Ph.
Tim Kosty, R.Ph., and Don Dietz, R.Ph.

With the start of a new decade, we expect changes for pharmacy 2020 that have been a long time coming. We see a continual decline in reimbursement rates, albeit at a slower rate, and continued consolidation of retail pharmacies. There is now an oversupplyof pharmacists, leading to lower wage rates for graduating students. The new graduates are seeking to use their clinical skills, and we believe the lower wages and lack of jobs will lead new graduates and displaced pharmacists to create and offer innovative clinical services that meet the needs of our patients and/or payers.

Over supply of Pharm.D. Graduates

Since 2010, 38 new pharmacy schools have opened, and nearly 5,500 new pharmacists are graduating each year. With average student debt upon graduation rising to $163,494 (a $40,000 increase from 2012) and over 25% of new Pharm.D. graduates unable to find full-time work upon graduation, the landscape for pharmacy will inevitably have to change.

Creating value for patients and payers will be the path to obtaining equitable reimbursement for new pharmacy services. 

We find that universities have been incorporating more clinical-services training into the curriculum. However, retail pharmacy chains realize that clinical services performed by pharmacists have not generated sufficient gross profit to divert resources from the dispensing of prescriptions to the provision of these services. However, the oversupply of pharmacists and reductions in wages for new graduates could make the provision of clinical services more attractive.

Furthermore, pharmacists are retiring at an older age. Only 47% of baby boomers have retired at age 65, creating fewer openings for new graduates. Using Social Security as a barometer, retirement age has increased from 65 to 67, so conceivably more seasoned pharmacists are working longer instead of retiring. With the supply-and-demand curve changed from the last 30 years, we expect that pharmacists’ wages will stagnate at best, and likely go lower, until a new equilibrium is reached. Lower wages will change the opportunity-cost dynamics when comparing dispensing prescriptions to new clinical services being created by pharmacists. Innovation will be a necessity as pharmacists create new opportunities to employ their skills and leverage technology to offer these new services.

Patient Engagement Strategies

Patients are taking more ownership of their medical decisions. The mantra has switched from “What can the healthcare system do for me?” to “How can I be involved in obtaining optimal care?” Pharmacies have responded and begun implementing virtual services such as text message reminders, adherence calls, and electronic transfer of prescriptions to other pharmacies. These innovations have been beneficial, but we believe a more holistic approach to patient engagement strategies will soon be undertaken.

While there are numerous successful efforts throughout the country, we see value in the integration of clinical services in community pharmacies provided by CPESN (Community Pharmacy Enhanced Services Network) as a clinically integrated network. 

Episodic interactions between a patient and pharmacist can cause patient confusion and focus on specific issues rather than overall patient health. Retail chains are evaluating global patient engagement strategies that enable patients to select the frequency and channels of communications with their pharmacist. We believe these programs will engage patients in their prescription drug therapy and enable pharmacists to play a more central role. With advances in technology, the costs of providing these interactions are decreasing through automation.

Chains Testing the Waters

This year we have seen the large chains pilot innovative programs in healthcare, including pharmacy.  Walmart is testing strategies for clinical services provided by pharmacists and other healthcare professionals. Walmart has also launched a health center initiative that will provide family practice care along with pharmacy, optical, and laboratory services that cost $59 to $99 per visit for an individual without health insurance, although many major insurance plans are accepted. CVS has pivoted away from its MinuteClinic model to a newer, improved HealthHUB that provides more comprehensive clinical services.

Other patient engagement strategies that will continue to evolve are telehealth and telemedicine. Easy access to care is valued by consumers. CVS has expanded its telehealth services to 32 states and will continue to expand in rural areas where access to healthcare is not as readily available. Rite Aid has partnered with InTouch Health and launched telehealth kiosks in several pharmacies. Their attempt to incorporate point-of-care testing will facilitate patient engagement and clinical service opportunities for patients via collaborative practice agreements. These retail giants are creating an ease of care for individuals and families that potentially will change how primary care is delivered. CVS Health believes it will be successful with this model and use the Aetna acquisition to drive members to its new HealthHUBs.

An Opportunity for Independents

We see independent pharmacies as another incubator for pharmacy-based clinical services. While there are numerous successful efforts throughout the country, we see value in the integration of clinical services in community pharmacies provided by CPESN (Community Pharmacy Enhanced Services Network) as a clinically integrated network. CPESN is providing a network of pharmacists and engaging payers with an integrated approach to clinical services, leading to a reduction in costs for payers. The primary objective of CPESN is quality improvement through new enhanced services and improvement on existing service offerings. Our hope is that this serves as a pathway for individual pharmacies to expand clinical services in an organized fashion.


Pharmacy consolidation will be ongoing. The resulting oversupply of pharmacists will create incentives to explore, test, and implement new clinical services models. We are entering a new labor market for pharmacists that will require changes in thinking and services compared to what we have experienced in the past. Creating value for patients and payers will be the path to obtaining equitable reimbursement for new pharmacy services. New technology will make patient engagement a new focus for pharmacists, both at chains and independents. Will you be leading the change or following? Best wishes for a healthy and prosperous 2020! CT 

Tim Kosty, R.Ph., is president, and Don Dietz, R.Ph., is VP of Pharmacy Healthcare Solutions Inc. The authors have more than 68 years of experience, combined, in the pharmacy market. The authors can be reached at tkosty@phsirx.com and ddietz@phsirx.com.