The United States has almost 8,000 fewer retail pharmacies than it did in 2018, and more than 2,000 closed in 2025 alone. Rite Aid has liquidated. Walgreens is working through a multi-year plan to shutter hundreds of stores. CVS has trimmed hundreds more.
Yet total U.S. prescription dispensing revenues for all dispensing formats reached a record $751 billion in 2025, up 10% from 2024.
Record closures and record revenue in the same year may seem contradictory, but national totals obscure very different effects on the community. The impact of the retail pharmacy shakeout on patient access has become geographically K-shaped: dense markets can absorb pharmacy closures with little loss of patient access, while rural communities can lose their only nearby pharmacy.
The economic pressures on pharmacies are similar across the country. The access consequences of a closure are not. Below, we examine what is driving the shakeout and why geography determines which communities can absorb them.
K-EPT THE SCRIPTS, LOST THE MARGIN
The pharmacy industry's revenue growth has been driven overwhelmingly by specialty drugs, which are less commonly filled at retail pharmacies. The $751 billion headline therefore says little about the economics of the average retail prescription.
As we have covered in Section 3.3.4. of the 2026 Economic Report on U.S. Pharmacies and Pharmacy Benefit Managers, 12% of total specialty prescription revenues were derived from retail chains and supermarkets in 2025. These figures are comparable to previous years' findings.
Both manufacturers and payers can limit the dispensing of specialty drugs to a defined set of pharmacies, often those affiliated with PBMs.
Instead, retail is largely where the everyday prescription gets filled, and it's almost always a generic. Generics make up ~90% of retail prescriptions, and there are only so many margin dollars to extract from a prescription whose total reimbursement is $25 and continues to deflate.
On top of that, store front and OTC sales may be much smaller than the pharmacy dispensing business, but they still depend on consumers walking through the door. As shopping habits have shifted to e-commerce and big box stores, that foot traffic has fallen sharply.
That leaves retail pharmacies dependent on large volumes of comparatively low-dollar prescriptions. When the margin on each prescription is thin, maintaining volume is vital to staying open.
K-OMPETING FOR VOLUME
For a typical pharmacy, total annual operating costs do not change based on small variations in the total number of prescriptions dispensed. These costs include pharmacists' salaries and benefits and general overhead costs like rent, utilities, insurance, advertising, computer systems, and other items.
Consequently, the incremental cost of dispensing one extra script is very low. This cost structure encourages competition for network position to acquire additional prescription volume.
In markets where consumers have several nearby alternatives, plans can narrow their networks with relatively little disruption, saving themselves and patients money. One estimate puts the savings at $1.3 billion in additional savings if all commercial plans adopted preferred networks.
That can be a sensible strategy in a metro areas with nine pharmacies per zip code. However, recent Part D data quantifies the geographic difference with rural pharmacies: rural enrollees were over 7 miles away from the nearest preferred pharmacy compared to 1.9 miles in metro areas.
The lack of alternatives becomes even more consequential when a pharmacy closes. IQVIA found in rural zip codes, 54% of patients are displaced after a closure, compared with 17% in metro areas.
To understand why those closures produce such different outcomes, it helps to look at where the pharmacy churn is actually occurring.
K-LOSURES CUT TWO WAYS
Every year, a significant number of pharmacies close and others open, though not always in the same areas. A JAMA Health Forum study from last year found an overall turnover rate of 6.2% a year from 2010 to 2023.
However, that topline average splits sharply by ownership.
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Chain pharmacies had a 49.9% turnover rate over the study period (3.6% annually), with more net closures than openings. Independent pharmacies churned far more at 152.7% (10.9% annually), yet they also opened roughly as many stores as they closed, staying near the same net number between 2010 and 2023.
Ownership tells us which pharmacies are opening and closing, but geography tells us what those openings and closures mean for access.
An opening and a closure can cancel each other out in national statistics even when they occur hundreds of miles apart. A new independent opening in a growing suburb does nothing for a rural county that just lost its only store.
MedPAC's April 2026 analysis shows why raw closures can be misleading. Chain pharmacies are the majority of closures—up from 25% of closures in 2021 to 62% in 2025—but most close where alternatives exist nearby. In rural areas, closures more often lead to patient access issues.
There's the K—dense markets can absorb closures without materially reducing patient access, while rural communities can lose access completely.
K-NOCK-ON EFFECTS
Rural access was already thin before these record closures. Using 2020–2022 data, a Health Affairs Scholar study found 15.8 million Americans (4.7% of the country) lived in low-income communities far from a pharmacy—A.K.A. pharmacy deserts.
The rural U.S. population is about 46.2 million. Because rural residents account for only about 14% of the country, deteriorating access in rural communities can be easily obscured by national pharmacy-density and closure data.
An analysis in our pharmacy report found only about 42% of people in the most rural counties lived within five miles of a pharmacy in 2020. And the pressure is getting worse: more patients are being affected as the rural pharmacy closure rate has more than doubled since 2021.
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Today 33% of rural Medicare Part D beneficiaries live in a zip code with no pharmacy at all, which started trending slightly up in 2023.
Unlike a metro area, a rural market that loses its pharmacy is losing an access point that a smaller, older population may never get again.
K-NOWING WHAT'S WORTH PRESERVING
Not every pharmacy closure creates an access problem. In a zip code with nine pharmacies, losing one may leave patients with several convenient alternatives. However, in a lot of these rural areas like my hometown in Kansas, the pharmacy is the most accessible (and sometimes only) healthcare location around.
The policy challenge is therefore not preventing every pharmacy closure. It is identifying the communities where a closure would eliminate reasonable pharmacy access, then deciding whether preserving that access warrants intervention when the local market can no longer support a viable pharmacy. The market can't always tell which store is a vital access location.
The market may see two pharmacy closures, but patients can experience two very different outcomes. That's the split effect on patient access from the retail pharmacy shakeout.
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