Pharmacists respond: Is CVS’ acquisition of Target pharmacies a good thing?

December 23, 2015

Does this consolidation bode well for pharmacists? We asked pharmacists across the country to weigh in.

Earlier this month, CVS Health announced the completion of its $1.9 billion acquisition of Target’s pharmacy and clinic businesses.

Target’s 1,672 pharmacies in 47 states will be rebranded as CVS/Pharmacy. Its clinics will be rebranded as MinuteClinics. The transition is expected to be completed within six to eight months.

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Does this consolidation bode well for pharmacists? We asked pharmacists across the country to weigh in.

An opportunity to enhance pharmacy practice

Pharmacist #1: The CVS/Target acquisition has the opportunity to advance community pharmacy practice and transform the traditional community pharmacist role. It will be interesting to see if the acquisition will foster new services and expand existing patient-care services. 

 

The press surrounding the CVS/Target acquisition could be used strategically to transform community pharmacy and highlight the expanding role of the community pharmacist. CVS could utilize the press and provider status legislation to change the perception of community pharmacy. It will be unfortunate if CVS does not take advantage of this opportunity to advance community pharmacy practice.

Good thing for independents?

Pharmacist #2: With Target, I think their reputation as a retailer is quite a bit better than competitors such as Walmart. Having said that, I have never really been in a Target where it looked like the pharmacy was overrun with business, but that may just be in my area and I never am in a Target except on weekends. CVS is not a competitor in my area.  

My real feeling is that another smaller chain gets gobbled up by one of the 900-lb. gorillas in the pharmacy room. It could be profitable for independent pharmacies, since we provide better service and access.  

Fewer job options, tougher working conditions for pharmacists

Pharmacist #3: I feel this is bad for the profession. The choices for retail pharmacy employment are narrowing to the two big chains. They are buying up all the smaller chains. The less competition we have for our services, the less we will be valued and the more we will be abused. 

Pharmacist #4: I predicted as Medicare D lowered profit margins year after year and the Obamacare lowered profits even more, that only CVS, Walgreens, and Walmart would be left standing in the retail pharmacy space in America.

Now that CVS has bought out Target pharmacies (along with their acquisition of Omnicare in the long term care business) and Walgreens’ pending takeover of Rite Aid, my prediction is coming true. It wasn't that hard to see the inevitable collapse of retail brick and mortar pharmacies. CVS knew this when they bought Caremark years ago. Not sure how that acquisition was approved, but it was approved as will these current mergers.

 

When our chain was bought out and we became a "large" 80-store chain, we all thought we worked for a behemoth in the industry. Working conditions changed from the independent mentality to the chain mentality. It all became about the numbers.

So now CVS is integrating 1,600 Target pharmacies for a total of almost 10,000 pharmacy departments. It will be more about the numbers, and the pharmacist be damned. 

After the closing of whatever percentage of stores the FTC wants to finally approve the mergers, more pharmacists will be out of work, in an industry with an excess of graduates and pharmacy schools (with more on the way). Best of luck to the grads with 30-40 years to be pushed around by a store manager, a non-district manager, a CFO , COO, and CEO, who only care about the stock price and their exorbitant salaries and bonuses.

Pharmacist #5: In an era when a pharmacist's effectiveness is more and more measured in quantity not quality, the two recent mergers of CVS with Target and Walgreens with Rite Aid does not bode well for the pharmacist or the public. Soon the control of the bulk of the prescription business will be in the hands of just two major players.

The negative consequences to our profession will be felt by the pharmacist in job satisfaction and to the public in limited options for filling their prescriptions and eventually higher prices.

First, the employment options for pharmacists will be drastically reduced. The merged companies will be closing stores when the acquired chain has a store nearby.

 

Second, policies by these two companies which, for the most part, mirror each other may very well result in reduced salaries with increased production metrics. If both companies decide to reduce compensation while increasing workload, what are the employment options when just two employers control the market?

From a patient standpoint, the larger the chain the greater the ability to influence the insurers in securing preferred status creating limited access options for patients. Prices for the uninsured will eventually increase. As CNN reported, Target, CVS, and Rite Aid are among the most expensive places to fill a cash prescription.

Pharmacists, who have spent up to eight years in school with the hope of providing a much-needed professional service as a member of the healthcare team, will find themselves disillusioned and perhaps regretting their choice of profession.