Drug Channels delivers timely analysis and provocative opinions on pharmaceutical economics and the drug distribution system. Drug Channels reaches an engaged, loyal and growing audience of more than 100,000 subscribers and followers. Learn more...
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.
Whether you support or oppose the current structure of 340B, it is becoming harder to ignore that the debate is expanding beyond manufacturers and hospitals. Employers, health plans, and policymakers are beginning to ask who ultimately finances the program—and what those economics mean for benefit costs and premiums.
It’s time for Drug Channels’ annual look at pharmacist salaries and employment. The latest data might be a tough pill to swallow.
As we predicted, the situation was grim for retail pharmacists. Employment in retail outpatient pharmacies fell by 8,200 positions in 2025, following a drop of 11,700 positions over 2023 and 2024 combined.
Meanwhile, pharmacist employment at hospitals grew by 3,000 positions, after hospitals added more than 11,000 pharmacist jobs in 2023 and 2024. Nearly half of all pharmacists now work outside a traditional retail setting.
Overall pharmacist salaries averaged $140,920, but varied widely across practice settings. Salary growth in many settings, however, did not keep pace with overall inflation.
Our 2026 Economic Report on U.S. Pharmacies and Pharmacy Benefit Managers documents how and why retail pharmacy economics are under sustained pressure. Since 2018, the two remaining national drugstore chains have collectively closed nearly 3,000 locations, reflecting margin compression and weaker front-end economics.
It's time for Drug Channels Institute’s (DCI) annual update of vertical integration among insurers, PBMs, specialty pharmacies, and healthcare services within U.S. drug channels. As you can see below, we have updated and revised our infamous illustration of the major vertical business relationships within the largest companies.
These organizations continue to exert greater control over patient access, sites of care/dispensing, and pricing, although some have started to unwind their vertical integration strategies. Scrutiny of these companies’ actions continues to grow.
For 2025, DCI estimates that total prescription dispensing revenues at retail, mail, long-term care, and specialty pharmacies reached $751 billion in 2025, up 10% from the 2024 figure.
GLP-1 agonist drugs have become the dominant driver of revenue growth. Over the past five years, increases in dispensing revenues from GLP-1 products accounted for about 60% of retail pharmacies’ total revenue growth.
The table below—one of 270 in our new report—racks up DCI's first look at the 15 largest organizations that competed for a share of those dollars. For a sneak peek at the complete report, click here to download our free 32-page report overview (including key industry trends, What's New in this edition, the Table of Contents, and a List of Exhibits).
It’s time for Drug Channels Institute’s latest exclusive analysis of the 340B contract pharmacy market, which continues to boom along with the overall program’s expansion.
However, our 2026 analysis finds that the contract pharmacy market is now entering a more mature phase characterized by consolidation, slower growth, and increasing dominance by the industry’s largest participants.
Below, we characterize the state of the marketplace:
Nearly two-thirds of the entire U.S. pharmacy industry participates as contract pharmacies for the 340B hospitals and federal grantees.
The number of 340B pharmacy locations declined for the third year, due largely to the retail pharmacy shakeout and manufacturers’ 340B policies.
Meanwhile, the total number of unique contract pharmacy/covered entity relationships continues to expand. Five multi-billion-dollar, for-profit, publicly traded pharmacy chains and pharmacy benefit managers (PBMs)—Cigna, CVS Health, UnitedHealth Group, Walgreens, and Walmart—now account for a record 77% of all relationships.
Read on for our latest analysis of this ever-expanding profit pool for pharmacies and PBMs. For a deep dive on what the 340B program’s growth means for drug channel participants, join Adam J. Fein, Ph.D., and Tyler Novotny on June 12 for a new live video webinar: 340B in 2026: Market Shifts, Policy Battles, and What They Mean for Stakeholders.
The onslaught of pharmacy-related news doesn’t end. It may even be increasing in volume due to AI.
But don’t worry—I’ve gathered some high-impact information over the last month from my LinkedIn posts that you can quickly read between your sets at the gym.
I recommend reading BETWEEN your sets, but some may be brave enough to read during the set itself.
Don't miss DCI’s upcoming webinar on Friday, June 12, 2026, from 12:00 p.m. to 1:30 p.m. ET. Adam J. Fein and Tyler Novotny will unpack the good, the bad, and the ugly of the 340B program—and what it means for you. Click here to learn more and sign up.
It's time for Drug Channels Institute’s (DCI) annual update of vertical integration among insurers, PBMs, specialty pharmacies, and healthcare services within U.S. drug channels. As you can see below, we have updated and revised our infamous illustration of the major vertical business relationships within the largest companies.
These organizations continue to exert greater control over patient access, sites of care/dispensing, and pricing, although some have started to unwind their vertical integration strategies. Scrutiny of these companies’ actions continues to grow.
Don't forget to register for DCI’s next webinar on Friday, April 10, 2026, from 12:00 p.m. to 1:30 p.m. ET. Adam J. Fein and Bryce Platt will unpack the good, the bad, and the ugly of the PBM industry—and explore what it means for you. Click here to learn more and sign up.
Special launch pricing discounts will be valid through April 6, 2026.
This report—our seventeenth edition—remains the most comprehensive, fact-based tool for understanding the entire U.S. drug pricing, reimbursement, and dispensing system. If you make strategic decisions in this industry, this report is essential reading.
WHAT’S INSIDE
Nearly 1,300 endnotes, most of which have hyperlinks to source materials
If you preordered, you should have received an email with download instructions last week. Didn’t get it? Contact us at dcisupport@hmpglobal.com, and we’ll take care of it.
Our goal is simple: help you understand how the drug channel really works—and where it’s going.
That's why DCI reports are widely used by nearly every company involved in the drug channel:
Pharmaceutical manufacturers
Wholesalers, pharmacists, and pharmacy owners
Payers, insurers, and plan sponsors
Hospitals, benefit managers, and managed care executives
Policy analysts, investors, consultants, and more
In other words, this report helps you understand what your customers, partners, and competitors are reading—and how they’re thinking.
The chart below illustrates the depth and breadth of the 2026 edition. The numbers indicate the report chapter that corresponds to, explains, and analyzes each channel flow.
FUN FACTS ABOUT THE 2026 EDITION
The 12 chapters are self-contained—you don't need to read them in order. (Really!) Use the report as a reference guide or read it end-to-end. It’s designed as both a foundational resource and a deep dive into the latest trends and developments.
There are tons of internal hyperlinks to help you navigate and focus on what matters most to you.
We’ve updated all market and industry data with the most current insights, including our annual analyses of the largest pharmacies, specialty pharmacies, and PBMs.
One of the available licenses gives you the option to download an additional PowerPoint file with images of all 270 exhibits—making it easier to share insights with your team. (Note: All license versions include exhibits within the text.)
There are a staggering 1,284 endnotes (!), most of which have direct hyperlinks to original source materials. This allows you to validate, explore, and go deeper.
We have reluctantly removed all corny jokes and pop culture references. So, no memes and absolutely no references to SpongeBob SquarePants.
Thank you for your interest in our work. If you have any questions before purchasing a license to the report, please email me. We look forward to helping you succeed in the evolving U.S. drug channel.
For 2025, DCI estimates that total prescription dispensing revenues at retail, mail, long-term care, and specialty pharmacies reached $751 billion in 2025, up 10% from the 2024 figure.
GLP-1 agonist drugs have become the dominant driver of revenue growth. Over the past five years, increases in dispensing revenues from GLP-1 products accounted for about 60% of retail pharmacies’ total revenue growth.
The table below—one of 270 in our new report—racks up DCI's first look at the 15 largest organizations that competed for a share of those dollars. For a sneak peek at the complete report, click here to download our free 32-page report overview (including key industry trends, What's New in this edition, the Table of Contents, and a List of Exhibits). We’re offering special discounted pricing if you order before April 6, 2026.
Don’t miss DCI’s next webinar on April 10, 2026, from 12:00 p.m. to 1:30 p.m. ET. Dr. Adam J. Fein and Bryce Platt will unpack the good, the bad, and the ugly of the PBM industry—and explore what it means for you. Click here to learn more and sign up.
The Centers for Medicare & Medicaid Services (CMS) has just released its initial 2026 data on enrollment in Medicare Part D prescription drug plans (PDPs).
DCI’s exclusive analysis shows that 83% of seniors remain enrolled in PDPs with preferred pharmacy networks—essentially unchanged from 82% in 2025, but sharply lower than the 99% peak in 2023. Meanwhile, the number of major Part D plans offering preferred networks has fallen to a record-low eight.
The new enrollment data reveal a clear shift in competitive positioning: Albertsons and Publix are now preferred in every major plan. Walgreens is holding strong. Walmart—the company that invented the Part D preferred network model—has slipped to the middle of the preferred pack.
Meanwhile, smaller pharmacies have fully abandoned PDPs’ preferred networks in 2026.
At the same time, the IRA’s expansion of the Low-Income Subsidy (LIS) means a growing share of beneficiaries have little financial incentive to use a preferred pharmacy at all. Add in the PBM reforms in the Consolidated Appropriations Act of 2026, and the preferred network model will gradually lose relevance.
In the video clip below, I explain how PBM compensation models continue to evolve:
Traditional profit sources, such as mail dispensing of nonspecialty drugs and retained rebates, have become less significant.
Retail network spreads now account for a small portion of large PBMs’ overall profits.
Specialty dispensing profits, manufacturer administrative fees, and revenues from group purchasing organizations (GPOs) have emerged as major contributors to PBM profitability.
Understanding how PBMs generate profits is key to navigating the evolving drug channel landscape. Watch the full webinar replay and download the complete slide deck to explore these dynamics in more depth.
As I’ve been warning for years, the Inflation Reduction Act of 2022 (IRA) has nearly obliterated the stand-alone Medicare Part D prescription drug plan (PDP) market.
DCI’s exclusive analysis of Center for Medicare & Medicaid Services’ (CMS) data reveals:
The number of PDPs has plummeted by 55% since the IRA’s passage, to a record low of 360 plans for 2026.
Preferred cost-sharing pharmacy networks are disappearing, with their share falling to the lowest level since 2014. That’s a post-IRA net loss of 505 plans with these networks.
Just five companies—Aetna, Health Care Service Corporation, Humana, UnitedHealthcare, Wellcare—will account for 94% of all PDPs in 2026. In recent years, four major plan sponsors—Cigna, Clear Spring Health, Elevance Health, and Mutual of Omaha—have exited the PDP market.
See the charts below and our analysis of the remaining national players, along with updated data on preferred networks in Medicare Advantage prescription drug (MA-PD) plans.
Even with the demonstration program handouts, the Part D market is increasingly fragile: fewer choices, greater concentration, and massive disruption for beneficiaries.
Thanks, IRA! 🙃
What else should you expect for 2026? Find out during my upcoming live video webinar, Drug Channels Outlook 2026, on December 12, 2025, from 12:00 p.m. to 1:30 p.m. ET. Click here to learn more and sign up. As always, we are offering special discounts if you want to bring your whole team.
The 340B Drug Pricing Program has emerged as a growing source of profits for pharmacies and pharmacy benefit managers (PBMs).
Drug Channels Institute’s latest exclusive analysis of the 2025 market reveals a highly concentrated market structure increasingly dominated by a handful of major players:
About 32,000 pharmacy locations—nearly 60% of the entire U.S. pharmacy industry—function as contract pharmacies for the hospitals and federal grantees that participate in the 340B program.
The 340B contract pharmacy has become increasingly concentrated with five multi-billion-dollar, for-profit, publicly traded pharmacy chains and pharmacy benefit managers (PBMs)—Cigna (via Express Scripts), CVS Health, UnitedHealth Group (via Optum Rx), Walgreens, and Walmart.
Pharmacy services administrative organizations (PSAOs), which operate between pharmacy benefit managers (PBMs) and smaller pharmacies, are among the most mysterious—and misunderstood—intermediaries in our complex U.S. drug channel.
Adding to the mystery: the largest PSAOs are owned by the three multi-billion dollar, public companies that also dominate pharmaceutical distribution—Cencora, Cardinal Health, and McKesson. These companies sit atop the Fortune 500 list and distribute more than 96% of prescription pharmaceuticals in the U.S.
Below, we draw on data from our forthcoming 2025-26 Economic Report on Pharmaceutical Wholesalers and Specialty Distributors to profile the largest PSAOs and highlight crucial business trends affecting each company. We also examine how wholesalers are leveraging PSAOs as part of a broader vertical integration strategy that is building significant positions in businesses beyond drug distribution.
So, buckle up and let’s take a trip through the tollbooth to visit yet another overlooked—but powerful—corner of the drug channel.
During my recent video webinar—What’s Next for Retail Pharmacy: Data, Debate, and Disruption—Antonio Ciaccia of 46brooklyn Research joined me to explore the data, trends, and strategic shifts driving a major shakeout in the retail pharmacy sector.
In the short video excerpt below, I break down five key economic forces putting intense pressure on U.S. drugstores. This clip offers just a glimpse of our broader conversation, which also covered PBMs, wholesalers, the evolving competitive landscape, and more.
Let’s cut through the steamy summer haze with a refreshing breeze of industry insights from Drug Channels—perfect for pondering while you float in your favorite pool:
P.S. Want more real-time insights? Join my more than 64,000 LinkedIn followers for daily links to neat stuff, along with sharp and thoughtful commentary from the DCI community.
This week, I’m rerunning some popular posts while I prepare for tomorrow's live video webinar: What’s Next for Retail Pharmacy: Data, Debate, and Disruption. I’ll be joined by special guest Antonio Ciaccia, CEO of 46brooklyn Research, and President of 3 Axis Advisors.
It's time for Drug Channels’ annual update of vertical integration among insurers, PBMs, specialty pharmacies, and healthcare services within U.S. drug channels. As you can see below, we have revised, renovated, and refurbished our infamous illustration of the major vertical business relationships among the largest companies.
Proponents of these vertical integration arrangements argue that they create opportunities to mine healthcare costs. However, these organizations remain highly controversial, due to the potential for anti-competitive behavior. We summarize some of the key issues below.
While some major companies have narrowed their focus or unwound previous integration efforts, ongoing consolidation and selective deconsolidation will continue to reshape the healthcare biome by trying to build something epic, block by block.
By 
This week, I’m rerunning some popular posts while I put the finishing touches on DCI’s 
