Tuesday, June 02, 2015

Pharmacist Salaries Keep Rising, Hitting $119K in 2014

Time for Drug Channels’ exclusive annual analysis of pharmacist salaries, based on the Bureau of Labor Statistics’ (BLS) recently released Occupational Employment Statistics (OES).

In 2014, the average gross salary for a pharmacist at a retail, mail, and specialty pharmacy was $119,400—up 1.6% from 2013. The higher salaries correspond with the pharmacy industry’s better-than-expected profit picture, as I noted in Surprise! Government Data Again Show Rising Drugstore Profits. Employment headed in a different direction, with slightly fewer pharmacists working at drugstores and mass merchants.

Full details below. I also highlight a new Health Affairs analysis of pharmacy school graduates. The new pharmacist pipeline also looks pretty full. Will we have too many pharmacists, or not enough?

THE PEOPLE

BLS and the State Workforce Agencies (SWAs) collaborate on the OES survey. BLS funds the survey and dictates its structure, while the SWAs collect most of the data. The OES survey categorizes workers by detailed occupations based upon the Standard Occupational Classification (SOC) system. Your many questions about these data are answered on the OES FAQ page.

The “pharmacist” occupation code is 29-1051. Using these data, we identified pharmacists working at retail, mail, and specialty pharmacies by analyzing the following NAICS (North American Industry Classification System) industries:
  • Chain and independent pharmacies: NAICS 446110
  • Supermarkets with pharmacies: NAICS 445100
  • Mass merchants with pharmacies: NAICS 452000
  • Mail pharmacies: NAICS 454100
Note that BLS computes the annual wage data by multiplying an hourly mean wage by a "year-round, full-time" figure of 2,080 hours. The data below show full-time, gross salary data. The wage data exclude bonuses and employer costs of nonwage benefits, such as health insurance and employer contributions to retirement plans.

THE PAYDAY

In 2014, pharmacists at retail, mail, and specialty pharmacies earned annual salaries averaging about $119,400, up 1.6% from 2013. (See table below.)

[Click to Enlarge]

Here are my observations about 2014 trends:
  • For the third consecutive year, pharmacists at mass merchants had the highest average salaries, earning a full-time average of $123,000. Annual salaries at supermarkets and mail pharmacies were lower.
  • Pharmacist employment at mail pharmacies grew, while employment in drugstores and mass merchants dropped. Salary growth for pharmacists at mail pharmacies also grew faster (+4.8%) than at other outpatient dispensing formats. Since overall mail prescription growth is flat-to-negative, I presume that these data reflect the growth in specialty pharmacies. See 2014's Top Pharmacies: Specialty Shifts Industry Leadership
  • In 2014, retail, mail, and specialty pharmacies accounted for 63% of total U.S. pharmacist employment, which comprised about 291,000 people. Hospitals accounted for an additional 24% of pharmacist employment. The remaining 13% worked at manufacturers, wholesalers, government agencies, non-hospital healthcare providers, and other organizations. These percentages have remained stable over the past few years.
  • The average pharmacist salary grew at the same rate in 2014 as did the average salary for all healthcare workers. Salaries for all “Healthcare Practitioners and Technical Occupations” averaged $76,010. Thus, pharmacist salaries at retail, mail, and specialty pharmacies were $43,000 (+57%) higher than average healthcare salaries.
Note that the OES data exclude self-employed pharmacists and pharmacy owners. Based on industry survey data, the average pharmacist owning a single pharmacy earned about $247,000 in 2013 (the most recent year available). See Profits Up Again for Independent Pharmacy Owners.

THE PIPELINE

The Health Affairs blog recently examined the pharmacist pipeline. Key findings:
  • In 2014, the number of pharmacy graduates was 13,838, up 84.8% from 2003.
  • The American Association of Colleges of Pharmacy (AACP) projects that the number of annual graduates will grow to 15,632 by 2017.
Here’s a look at the 2003-2014 trend and 2015-2017 projection.

[Click to Enlarge]

Does this chart point to oversupply? So, will we have too many pharmacists, or not enough? Wish I could find someone who knew something about supply and demand...

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