More Minnesotans face 'pharmacy deserts' with chain drugstore closures

KB Brown's phone hasn't stopped ringing since Walgreens shut its W. Broadway store last year, leaving one pharmacy to serve 67,000 residents in the north Minneapolis area where he lives and runs his graphics design business.

With Walgreens gone — and CVS shutting four other area stores — Brown, at least three times a week, transports employees, relatives and older neighbors to pharmacies in Robbinsdale or other suburbs so they can get their medications.

"It's hard. Many of them are not mobile," Brown said. "When I was younger, we didn't have to leave the North Side for anything. We had three grocery stores, we had clothing stores, we had multiple pharmacies. As we sit here now, we have one grocery store, one pharmacy."

North Minneapolis joins a growing number of "pharmacy deserts" rapidly dotting the state and nation as small and large pharmacies close up shop, leaving people with few options to quickly access prescription medicines. The problem is expected to get worse as the nation's two pharmacy giants continue to downsize. CVS, which closed 600 U.S. stores between 2021 and 2023, said it would close 300 more this year as leases end. On Oct. 15, Walgreens announced a plan to close 1,200 unprofitable stores, starting with 500 in 2025.

A half-million Minnesotans live in pharmacy deserts, according to a report issued earlier this year by the state Department of Health. "Many more live in areas that are at risk of becoming pharmacy deserts with the closure of a single pharmacy," the report said.

CVS and Walgreens have not disclosed most locations slated for closure, but Minnesota residents like Brown say they are nervous. Areas like his can ill afford more losses.

While pharmacists, drug companies and insurance middlemen — called pharmacy benefits managers — blame one another for the problem, the Minnesota Department of Health (MDH) estimates that more than one-third of residents in Minneapolis, St. Paul and the first-ring suburbs are in pharmacy deserts.

The number of independently owned pharmacies in Minnesota has plunged from 478 to 156 in the past two decades, according to the Minnesota Board of Pharmacy. Many of those left standing say they are operating at a loss and forced to find alternative revenue streams. Large chain stores have dwindled from 552 to 451 over that time.

The closings are also clearly noticeable in the Twin Cities, where two decades ago, 142 small pharmacies and 307 chain locations operated. Last year, there were only 48 independent pharmacies and 252 chain locations.

The cities of Hinckley, Clarkfield and Avon had their only pharmacy close this year, joining 17% of the state's residents who live in zip codes that also don't have pharmacies, said Luke Slindee, a pharmacist, activist and senior pharmacy consultant lobbying to change his industry.

"This is heartbreaking," said Jill Phillips, executive director of the Minnesota Board of Pharmacy. "When you line up the data, the drop [in the number of pharmacies] is significant, even just over the last decade. … At some point, something's got to give."

Pharmacy deserts spreading

The trend is worrisome, said Brown of Minneapolis.

"We're a community. We really try to take care of each other," he said. "But it's tough."

Besides losing Walgreens, the nearest CVS stores are also closed. And the Cub Foods store on W. Broadway in Brooklyn Park is closing its store and pharmacy this month.

That pain is spreading, said James Peacock, an MDH chronic disease epidemiologist who is studying the problem in partnership with the University of Minnesota's College of Pharmacy.

While 8% of the state's population currently lives in a pharmacy desert, the number is at risk of growing to 11.7% if the lone pharmacy left in a region closes, he said.

If that happens, sick residents can suffer, he said, noting that the CVS and Walgreens on Maryland Avenue in St. Paul both closed. And on the corner of Snelling and University in St. Paul, "there used to be a CVS on one corner, a Walgreens on the other and a Cub Food pharmacy down the street. Now all that's left is the Cub," Peacock said.

Downtown Minneapolis is also "sort of a desert," he said, after Lunds & Byerlys closed its pharmacies in 2019 and CVS closed its 10th Street and Hennepin Avenue store. That leaves Walgreens and the CVS at Target, both on Nicollet Mall.

Pharmacists seek help

To change things, Slindee is one of several pharmacists lobbying legislators. Pharmacists also are showing up at protests over the issue.

State Sen. Melissa Wiklund, DFL-Bloomington, has sponsored legislation supporting industry reform.

"I hear from constituents that they are concerned about closures of local Walgreens and CVS locations," she said. "One location near me is right next to a senior housing building and it is also close to a very diverse neighborhood. If this Walgreens would close, it would place more burdens on those living in the area in terms of distance to access prescriptions."

Pharmacists, state board officials and legislators blame industry upheaval on low drug-reimbursement rates from insurers, especially as pharmacy benefits managers (PBMs) increasingly take over managing the prescription portion of employer benefit plans.

PBMs negotiate drug prices with manufacturers and structure medication benefits within health plans. PBMs provide these services for insurance companies and employers alike. And they are increasingly under scrutiny from independent pharmacists, attorneys general and legislators.

PBM officials say criticism and scrutiny is unwarranted because they deliver a valuable service and cost savings for patients, and in some cases reimburse small independent pharmacies at higher rates than chain pharmacies.

In a blog last month, JC Scott, CEO of the Pharmaceutical Care Management Association, said it's drug manufacturers that really set pricing thresholds. "More meaningful progress for all patients cannot happen without drug companies first lowering their list prices," Scott said.

Critics disagree. PBM policies, including encouraging patients to use mail order pharmacies owned by them, put stress on local pharmacies, especially smaller independents, they say.

Another issue: Price lists change frequently, so pharmacists aren't able to predict what they will receive for reimbursement. Wiklund said that causes pharmacies to make some hard choices on what drugs to stock.

"It's an absolute mess. The whole [pharmacy] system's on fire right now," said St. Paul Corner Drug Store owner John Hoeschen.

Last month Cigna's large Express Scripts PBM — used by Target, Wells Fargo and others — asked Hoeschen to sign a new contract with reimbursement rates that he said were 8% to 12% below his costs.

"So we've said, 'We can't sign the contract.' And they say, 'Well then, you're out,'" Hoeschen said. "They're going to turn us off on Nov. 15," which will affect about 2,000 of his 7,000 customers.

Hoeschen is taking the chance. He hopes customers will stick with him and pay for low-cost drugs out of pocket. About 90% of the prescriptions he's asked to fill cost $18 to $24 for a three-month supply. In the meantime, he's taking other steps so his pharmacy relies less and less on dispensing pills.

Pharmacists try to stay afloat

On a recent Friday afternoon, Hoeschen vaccinated a steady stream of customers against the flu and COVID-19. Vaccines now represent 50% of Corner Drug's revenue and are "the only reason we are still in business," Hoeschen said.

The cash buildup from the vaccines funds the shortfalls from January through August.

Deborah Keaveny, who owns Keaveny Drug in Winsted, 45 miles west of Minneapolis with a population of 2,242, said her region is "teetering on becoming a pharmacy desert." There are three family-owned pharmacies in a 20-mile radius, and all are debating how long they can keep going.

"I've owned this place for 20 years, and it has never been this big of a struggle," she said. "I, like many independent pharmacies, are operating at a loss. And you have to kind of evaluate, how long are you going to continue to cannibalize your retirement and savings and things like that to keep the doors open."

To create extra revenue, she became a Medicare insurance agent in May. Others she knows have opened coffee shops, liquor and gun stores or are landlords.

"If you just have a pharmacy and all you do is fill prescriptions, then you're struggling. It's just not enough," she said. "[It's why] we saw a lot of the independent pharmacies closing."

The PBM policies have frustrated Keaveny and dozens of other independents so much that they protested outside United Health's Optum Rx pharmacy offices in Eden Prairie last year and again this September.

If Keaveny closes her pharmacy, the next ones are 17 and 25 miles away.

Slindee joined the lobbying effort after his parents sold their pharmacy in Harmony, near the Iowa border, in 2007, then saw it close in 2022. "Now there's nothing," he said. His father refuses to use a mail-order service so drives 12 miles to Preston, or if he can't get it there, over 23 miles to Cresco or Decorah, Iowa.

"I have that personal experience of how crappy it is to be in a rural, small town and to just lose your only pharmacy," Slindee said.

Stepping outside his company, Wolfpack Promotionals on W. Broadway in north Minneapolis, Brown said he knows the feeling of losing access to nearby pharmacies. Nodding toward two nearby senior apartment complexes and thinking of his volunteer side gig, he said, "They need rides."