The Future of Pharmacies: Mom-and-Pop Shops

JC Telemedicine
7 min readNov 7, 2021


Despite a growing number of challenges, the future of pharmacies will be independent, mom-and-pop operations.

Life is hard for an independent pharmacy owner. The list of challenges goes on and on, including, but not limited to, changing consumer expectations in a technology driven world, the broad challenges faced by all healthcare providers during COVID, the pharmacy benefit managers’ (PBM’s) grip on the pharmaceutical industry as a whole, and uncertainty surrounding reimbursement rates. Yet independent pharmacies are actually well-positioned to overcome these challenges. They can quickly create digital programs to optimize daily workflow and serve customers’ needs. They already possess the pieces required to provide an added layer of personalization using telemedicine approaches, and the readiness to pursue creative strategies to reach more patients. Even though it seems like all odds are against them, the smaller pharmacies that have managed to survive in the last twenty years are now learning to thrive. Here’s the latest from JC Telemedicine.

The drug store down the street is simply not what it used to be

Earning, serving, and retaining customers is a grind for the small business pharmacy owner, but independent operations continue to be the face of the digital transformation and innovation in our new age of healthcare.

It’s not as if owning a mom-and-pop pharmacy has ever really been easy. Rewind fifty years back, when the local drugstore was the pillar of the community—nobody built innovative solutions because there wasn’t a need. But because independent pharmacies are typically founded with a passion for providing exceptional care to their patients, their owners’ personal values and entrepreneurial spirit helped them to navigate a challenging enterprise. These values have never changed. And now, the drug stores down the street are getting left behind as the world changes around them.

The new generation of patients require personalization and technology in their buying experience, and from a consumer perspective, these changes are absolutely a good thing.

Millennials, for example, have a high incidence of chronic conditions compared to other generations, such as migraines, asthma, diabetes, and depression. Each of these present a unique opportunity for independent pharmacies.

This patient population is willing to pay a premium for products or services that help to maintain their wellness — and, in fact, they are transferring this preference to the older population, as well. Patients across the whole healthcare ecosystem are focusing time and effort on overall wellness and seeking out treatments to extend their longevity.

As patients increase demand for these new modalities of care, independent pharmacy owners who are closely in tune with the market are seeing an opportunity for growth. It’s an ideal time for independent pharmacy owners to expand service offerings and to capitalize on new demands in their community.

The number of challenges continues to rise, but …

Mom-and-pop pharmacies face myriad obstacles in today’s healthcare climate, beyond those of the COVID-19 pandemic. As consumer expectations change, so does the level of technology required to deliver a stellar patient experience.

The pandemic exacerbated long-standing economic pressure in the local pharmacy market, a consequence of lockdowns and diminished foot traffic. Before the pandemic, a pharmacy could rely on foot traffic to increase profitability with other drugstore purchases that subsidized the historically slim margins on mainstream medications. That’s just not the case when nobody comes to the pharmacy in person.

As of late, local pharmacies are being forced to shut their doors at an alarming rate, with drugstores in rural areas of the country being hit the hardest. This can be attributed to a number of things, but most notable is, perhaps, the grip that the pharmacy benefit managers (PBMs) have on the pharmacy ecosystem. The PBMs have made it difficult to break even, let alone make a profit, on dispensing costs for prescription medications.

A pharmacy’s reimbursement rates for medication is determined by a PBM. PBMs are third-party companies that act as the administrators of drug benefits for health plans and consumers. When PBMs came into the picture, their goal was to lower the cost of drugs for Americans by negotiating with the manufacturers and pharmacies. The PBM industry is highly concentrated in the United States. The three largest PBMs — Express Scripts, Caremark, and Optum — collectively handle around 75% of all prescription claims.

Within the last decade, the biggest issue facing small pharmacies is that PBMs control the pharmaceutical industry and the prices patients pay, which makes it hard for independent pharmacies to stay afloat.

For example, when a pharmacy dispenses an insurance-reimbursed medication to a patient, the pharmacy will generate a few dollars in profit. But there are costs associated with running a pharmacy beyond just the medication — overhead such as labor expenses, operational expenditures, insurance, and rent all eat into profits. The cost to dispense a single medication can be as much as $7–10 in labor expenses, and reimbursement often does not come close to covering these costs. This combination of slim margins on pharmaceutical products and costly overhead expenses can force many pharmacies to close their doors.

Independent pharmacies have the necessary attributes and are well-positioned to successfully navigate the many challenges of the healthcare market. Because the pharmacist possesses profound clinical knowledge, there is an amazing opportunity to leverage the pharmacy’s role in the delivery of health services using digital, telemedicine techniques.

Mom-and-pop pharmacies treat patients with individuality and personalized care

Pharmacies are finding better ways to reach patients and generate revenue from direct-to-patient online services. In addition to immediate access, the local pharmacy can be a popular destination to receive personalized care. At the moment, instead of generating daily foot traffic through the drugstore like they did many years ago, pharmacies often sit and wait for prescription volume to come through the door. This passive approach is now not sufficient to generate sound profit margins.

With the advent of digital health and the widespread adoption of asynchronous telemedicine over the last couple years, pharmacies can now take a proactive approach to driving prescription revenue in the door.

And those who’ve done so are seeing success. Even though an unprecedented number of rural pharmacies are closing up shop, the overall number of independent pharmacies actually grew steadily from 2010 to 2019. Big chain pharmacies, on the other hand, saw a decline in sales over the same period.

As medicine evolves, pharmacies have also adapted their approach to meet the changing needs of patients. Some of the new services pharmacies have recently adopted include medication counseling and patient consultations, diabetes education and counseling, immunization administration, dispensing over-the-counter medications and supplements, and other chronic medication management services. By expanding their available offerings, pharmacies of any size can cement their place as an integral part of the healthcare delivery chain. To make the experience more modern and cutting-edge, many pharmacies have taken the smart step of placing an emphasis on more virtual components, where patients can undergo offered services online, in-person, or a hybrid combination of both online and in-person.

Patients typically see a primary care physician a couple of times a year, but some high-touch patients visit their pharmacist as many as forty times a year. As local independent pharmacies evolve their service offerings, the role of pharmacists will only become more and more prominent.

Tomorrow’s pharmacy is digital and scalable

There are a number of trends that will influence the future for independent pharmacies:

● Increased digital commerce and medication home delivery

● Telehealth and asynchronous technology that expands access to clinical care

● Regulatory changes that improve transparency and drug reimbursements costs

● Pharmacies becoming true holistic care destinations that offer a suite of services

Over the last several years, we’ve seen a broad adoption of technology in the day-to-day workflow for pharmacists as well as the use of technical architectures in the patient pharmacy experience. We see this technology in the form of online prescription offerings, same-day delivery of medications and mobile application-based checkout flows. Pharmacies are getting creative with refill management and other traditionally manual processes in order to optimize the entire patient experience and increase prescription volume. Behind the scenes, pharmacies are implementing application programming interfaces (APIs) into their pharmacy management systems, so pharmacists can digitally receive prescription orders from doctor’s offices or virtual clinics. This technology adoption on both sides of the counter is allowing pharmacies to fulfill medications for more patients than ever before.

Although independent pharmacies are not the same as they once were, they are still pillars in their communities. Local pharmacies that possess an agile mindset will be able to remain profitable while keeping up with the demands of their local patients.

Despite an ever-growing list of challenges, the future is bright for independent pharmacies. As we see them leverage technology and their ability to make nimble business decisions, mom-and-pop pharmacies can and will continue to meet the needs of patients in ways that chain pharmacies simply cannot. Tomorrow’s pharmacy is digital and scalable; it leverages technology to streamline affordability and access for patients and physicians alike.

For more information on telemedicine, digital health, or bringing your pharmacy/practice into the digital era, please feel free to shoot us an email, follow us on Twitter, or visit us online.