Tuesday, June 04, 2024

Pharmacist Salaries and Employment in 2023: The Grass Keeps Getting Greener in Hospitals

It’s time for the annual update to Drug Channels Institute’s (DCI) analysis of pharmacist salaries and employment.

2023 was another tough year for pharmacists working in retail settings. While average salaries grew, they did not keep pace with overall inflation. Pharmacist employment at drug stores shrank but grew at supermarkets and mass merchants.

Meanwhile, employment and salaries in non-retail settings—hospitals, physician offices, outpatient centers, and home healthcare—continued to grow. These settings now employ one in three U.S. pharmacists. Greener grass—or just different soil?

Full salary and employment data below for your enjoyment or sorrow.

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We mowed through the data from the U.S. Bureau of Labor Statistics (BLS) to profile overall employment and salaries for U.S. pharmacists in 2023. Details on the data and our methodology are planted at the bottom of this article.

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Observations about recent employment trends:
  • Retail pharmacist employment was trimmed again. The BLS reported that there were more than 178,000 pharmacists employed at all retail outpatient settings: chain drugstores, independent pharmacies, supermarkets, mass merchants, and mail pharmacies. (As we discuss below, employment at mail pharmacies was included within the three retail categories shown above.)

    In 2023, retail pharmacist employment dropped to its lowest level since 2011. (The only exception was 2021, when employment was still affected by the COVID-19 pandemic.) Employment at pharmacies and drug stores fell, while employment at grocery stores and mass merchants increased slightly.
  • Pharmacist jobs continue to sprout at hospitals and physician offices. Total U.S. pharmacist employment has grown, from more than 286,000 in 2013 to more than 331,000 in 2023. The share of pharmacists employed in non-retail settings—hospitals, physician offices, outpatient care centers, and home health—grew significantly during this period, from 27% in 2013 to more than 33% in 2023. (See the chart below.) Consequently, pharmacist employment at non-retail settings grew by about 33,000 from 2013 to 2023.

    Note that the non-retail figure likely understates pharmacist employment by hospitals. That’s because hospital-owned retail pharmacies are included within the retail category. (See our Notes for Nerds, below.)
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Observations about recent salary trends:
  • Pharmacists' salaries across all settings grew in 2023. Overall average salaries across all industry settings were $134,790—a 4.2% increase over the 2022 figure of $129,410. Those in retail outpatient dispensing formats (+3.4%; orange line in chart below) experienced the fastest growth in average wages since DCI began tracking these data. However, salaries for pharmacist in both hospitals and physician offices grew by more than 4%. Pharmacists working in home health care settings experienced the fastest salary growth of any major practice setting for the second year in a row (+7.2%; not shown in chart below).

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    Overall consumer price inflation (CPI-U) grew by 4.0% over the measurement period shown above (May 2022 to May 2023). Consequently, pharmacists working in retail settings were the only group for which real (inflation-adjusted) average wages fell.

    Retail pharmacists understand that their businesses are being weeded out. Reduced hours, understaffing, and increased workloads have led to walkouts at multiple CVS and Walgreens locations as well as a call to unionize. Additionally, retail chain pharmacists are reporting exhaustion and little job satisfaction. Last year, Walmart announced higher salaries for its 3,700 pharmacists, only to follow it up a few months later by asking some of their 16,000 pharmacists to take voluntary pay cuts in the form of reduced working hours.

    Here in sunny Philadelphia, Rite Aid has effectively vanished from downtown center city and the pharmacy department at CVS doesn’t even open until 9 AM.
  • The salary gap between a pharmacy owner and an employed retail pharmacist remains meaningful. Our analysis of industry survey data indicates that the average pharmacist owning a single pharmacy earned about $172,000 in 2022 (the most recent year for which data are available). Independent pharmacy owner profits decreased due to a decrease in COVID-19 vaccinations, after an exceptionally high performing 2021. Even with a decrease over the previous year, owning a pharmacy, with all of its hassles and obligations, remained somewhat more lucrative than being an employee. (Note that the "Pharmacies and drug retailers" category includes pharmacists employed by an independent pharmacy as well as the paid owners and officers of incorporated independent pharmacies.)
One final thought: If the grass is always greener on the other side of the fence, perhaps it's time to stop looking over there and water your grass.

  • We rely on the 2023 Occupational Employment and Wage Statistics (OEWS) program (formerly known as the Occupational Employment Statistics program) from the Bureau of Labor Statistics (BLS). BLS and the State Workforce Agencies (SWAs) collaborate on the OEWS survey. BLS funds the survey and dictates its structure, while the SWAs collect most of the data. The OEWS survey categorizes workers by detailed occupations based on the Standard Occupational Classification (SOC) system. For more on these data, see the OEWS FAQ page.
  • The Pharmacist occupation code is 29-1051. The SOC defines pharmacists’ roles as follows:
    “Dispense drugs prescribed by physicians and other health practitioners and provide information to patients about medications and their use. May advise physicians and other health practitioners on the selection, dosage, interactions, and side effects of medications.”
    Using these data, we identified pharmacists working in various retail and non-retail settings based on the NAICS (North American Industry Classification System).
  • Beginning with the 2022 OEWS, BLS updated from the 2017 NAICS to the 2022 NAICS. Data on pharmacists that had been coded to mail pharmacy establishments within the industry code NAICS 4541 (“Electronic Shopping and Mail-Order Houses”) were placed back into the corresponding retail NAICS shown in the table above. Consequently, the figures for the retail outpatient subcategories will not be precisely comparable to the figures reported in our analyses published prior to 2022.
  • BLS computes the annual wage data by multiplying an hourly mean wage by a "year-round, full-time" figure of 2,080 hours. These data exclude bonuses and employer costs of nonwage benefits, such as health insurance and contributions to retirement plans.
  • Pharmacists employed by an independent pharmacy are included, as are paid owners and officers of incorporated independent pharmacies. However, the data exclude business owners and partners in unincorporated pharmacies.
  • The data show the location of employment as a "pharmacist." They do not specify the duties that the pharmacists perform or the entity that operates the pharmacy.
  • The NAICS industry code “446110 Pharmacies and Drug Stores” includes drug stores, pharmacies, and on-site institutional pharmacies. Thus, a pharmacist employed in a hospital’s retail outpatient pharmacy may be classified as an employee of a retail pharmacy.

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