Researchers addressed the wage gaps in specific pharmacy settings in relation to big chain retail pharmacy mergers.
Wage trends of pharmacy workers from 2012 to 2022 show a decrease in wages for pharmacists and an increase for pharmacy aides and technicians, according to new research. Furthermore, the retail community pharmacy workforce was making significantly less than those working in a hospital setting.1
This study, published in Journal of the American Pharmacists Association, addressed the fear of retail community pharmacy workers entering a monopsony labor market.
“In a monopsony labor market, consolidation of businesses (e.g., mergers) reduces the pool of employers, which may limit the employee’s ability to negotiate fair wages. In other words, the employers become the wage setters, and the employees become the wage takers,” wrote Mark Bounthavong, PharmD, PhD, associate professor of clinical pharmacy, Skaggs School of Pharmacy and Pharmaceutical Sciences, the author of the study.1
Although he noted that mergers can affect wages for all pharmacists, decreasing wages are much harder to address for independent pharmacists than those backed by big chain mergers, such as CVS Health merging with Target pharmacies.
In a 2021 statement, B. Douglas Hoey, MBA, pharmacist, and CEO of the National Community Pharmacists Association, addressed the labor shortage in community pharmacies following COVID-19.
“Most other businesses can raise prices to cover the additional costs, but it’s not that simple for pharmacies,” he said.2 “Their reimbursements are controlled by pharmacy benefit managers [PBMs]. There is no option to pass along higher prices to consumers as in most other industries.”
Researchers addressed the wage gaps in specific pharmacy settings in relation to big chain retail pharmacy mergers. | image credit: Jacob Lund / stock.adobe.com
To understand any existing disparities between retail and hospital pharmacies, Bounthavong compared the wages of pharmacists, technicians, and aides in both settings.
READ MORE: Assessing How COVID-19 Impacted Pharmacists’ Work Activities, Job Satisfaction
With data collected from a large population of pharmacy workers in both a retail and hospital setting, Bounthavong found the annual wage reduction to be $1974 greater for retail pharmacists compared with hospital pharmacists. In other words, there was a 16.6% decrease in annual retail pharmacist wages compared with just a 2.5% decrease for hospital pharmacists from 2012 to 2022.1
“In 2012, retail community pharmacists had higher annual wages than hospital pharmacists (+$5049), but retail community pharmacy technicians and pharmacy aides had lower annual wages than hospital equivalents (−$6937 and −$10,815, respectively). By 2022, all 3 pharmacy worker types in the retail setting had lower annual wages than their hospital equivalents,” he wrote.1
Pharmacy technicians and aides, however, saw increases in wages from 2012 to 2020, but hospital pharmacy workers saw larger increases.
Technicians’ salaries increased by 3.4% in the retail pharmacy workforce while wages increased by 7% for technicians in a hospital setting. Furthermore, retail pharmacy aides saw a 16.8% increase in wages from 2012 to 2022 compared with a 21.6% increase for those in a hospital setting.1
“This monopsonistic effect was only observed among pharmacists, who had a 16.6% reduction in annual wages from 2012 to 2022,” continued Bounthavong.
Although the fear of a monopsony labor market is directly impacting pharmacists across the country, their wage reductions and labor shortages are causing an even larger issue for public health.
Because labor shortages and wage reductions have caused the pharmacy profession to be less lucrative over the years, Bounthavong expressed worries about how that will affect patient care.
“The community pharmacy is an essential keystone in the health care infrastructure, and its current predicament warrants swift action to improve and re-instill the values and sense of commitment and duty to care for our community. However, if the current labor market persists and consolidation of retail community pharmacy chains continues, then the supply of pharmacists in the market may be affected,” he wrote.1
Despite pharmacists’ proven ability to step up during times of duress—for example, their roles in quickly distributing vaccines to millions of Americans during the COVID-19 pandemic—pharmacists are still battling reduced wages and unsafe working conditions, especially due to long work hours stemming from labor shortages.1
From unionization to government reform1, there seems to still be hope for the pharmacy workforce to get back on track. However, researchers identified this issue as secondary to that of risks on public health.
“It remains unclear whether the retail community pharmacy labor market is becoming a monopsony labor market where pharmacy workers are wage takers instead of wage setters. What is apparent is the potential threat to patient safety as concentrated big chain community pharmacies use their market power to lower wages and understaff community pharmacies. Policy makers may need to act swiftly to prevent potential patient-safety issues such as medication errors owing to understaffed pharmacies,” concluded Bounthavong.1
READ MORE: Workforce Challenges for Health System Pharmacy
