Signs of a weakening pharmacist job market

June 10, 2016

An expert with 35 years' academic and professional experience calls it like he sees it.

Daniel L. Brown, PharmD, is a professor and director of faculty development at Palm Beach Atlantic University's Lloyd L. Gregory School of Pharmacy in West Palm Beach, Fla. He has more than 35 years of academic and professional experience, including hospital pharmacy management and teaching positions at four other pharmacy schools. 

See also: Too many pharmacy schools? One dean says no

Daniel L. BrownFor years, Brown has warned that the flood of new pharmacy schools and the expansion of existing ones would create an oversupply of pharmacists and decrease salaries. His opinion is not unique, but it is unusual coming from a pharmacy school executive.

Drug Topics recently spoke with Brown about the proliferation of pharmacy schools and their effect on the pharmacy job market.

DT: There is disagreement over whether there is or will be an oversupply of pharmacists. If there is an oversupply, what is the biggest factor driving it?

Brown: The Aggregate Demand Index (ADI) indicates that pharmacist supply is close to demand, but it is based on employer feedback. Unfortunately, there is no comparable measure derived from job-seeker feedback.

My own observations as a former dean suggest that prior to 2009, almost all pharmacy students had jobs lined up at least six months before graduation, but those days are over. A study conducted in 2013 by eight schools in the Midwest queried pharmacy students about their plans four weeks before graduation. Of the 783 respondents, 81% had a job or post-graduate training program lined up, but 16% had not found employment and 3% had not started looking.

 

There are other telltale signs of a weakening pharmacist job market, such as a declining rate of applications to pharmacy schools. As reported by AACP, total applications rose from 80,082 in 2005 to a peak of 111,744 in 2010. At that time, a compelling job market, with the guarantee of a six-figure income upon graduation, made pharmacy a hot commodity. Applications have subsequently declined every year, dropping to 75,525 in 2015.

Pharmacist salaries also reflect job-market changes. According to the ASHP Foundation's 2015-2019 Pharmacy Forecast, 60% of the expert panelists reported that it was at least somewhat likely that salaries of general practice hospital pharmacists will decline by up to 10%.

There is an oversupply of pharmacists, albeit a modest one that is just getting started. It is being driven by an excessive rate of academic growth, which has resulted from new schools being established and existing schools expanding class size.

See also: Report: Supply of pharmacists outnumbers jobs

DT:What should be done to address the problem?

Brown: Obviously, every effort should be made to create new and better jobs.

We must also realize that the problem is largely a self-induced phenomenon that is being exacerbated to this day by ill-advised university decisions. Academic expansion should have subsided in 2011, when the graduation rate reached 12,000. Since then 16 new schools have opened and three more await approval to open this fall. By 2018 there will be over 15,000 graduates.

If pharmacy leaders across the country would simply speak out and express concern that continued academic growth is not in the best interest of the profession, their voices might be enough to discourage universities from perpetuating the madness. But most leaders remain silent on the issue and some even encourage greater expansion.

 

The sad truth is that the pharmacy industry's inability to sensibly regulate its own growth will bring harmful repercussions upon itself in the years to come. Natural market forces will inevitably impose a correction. By 2020 and well into the next decade, some pharmacy schools will have no choice but to downsize in response to declining enrollment. In all likelihood, others will be forced to close.

DT: Would gaining provider status solve the problem?

Brown: It would help, but it is not the panacea that many envision. Provider status alone is of little value unless someone is willing to pay for the services. It is one thing to be granted authority to provide a service. Being paid for that service and integrating it into a functional workflow, as part of a financially sound business model, is an entirely different matter. Pharmacists have been recognized as providers for MTM under Medicare part D for more than 10 years, but have not been able to take full advantage of that opportunity.

DT: What is needed to change the nature of practice in community pharmacies?

Brown: The profession should be advocating for a new prescription reimbursement model as diligently as for provider status. Miniscule dispensing fees function as an albatross around the neck of the community pharmacy industry, gradually squeezing the life out of it.

Pharmacies should be able to charge a legitimate professional fee of at least $10 to $15 for every prescription. Fees could be scaled up for more advanced services, thus supporting increased staffing through a practice model in which MTM could be seamlessly integrated into the workflow, rather than being forced as an add-on to an already heavy workload.

Community pharmacists often find it difficult to reconcile new job functions with the ongoing demands of high-volume prescription quotas. Pharmacy needs to face this problem head on, because as community pharmacy goes, so goes the profession.

DT:Is there a disconnect between academia, pharmacy organizations, and rank-and-file pharmacists?

Brown: There are many, but let's focus on one — perspectives toward the academic expansion of the last 15 years.

Consider how various stakeholders have been affected. State and national pharmacy organizations have benefitted from increased revenue generated by annual membership fees and meeting registrations. Employers, whether retail or institutional, have found it easier to fill positions and no longer have to worry about salaries spiraling higher. Universities have enjoyed increased tuition revenue sufficient to fund new buildings and hundreds of new administrative and faculty positions.

The only stakeholders bearing a heavy burden are rank-and-file pharmacists, especially new graduates, who enter the workforce carrying an average debt of $150,000 in student loans. They have suffered decreases in job availability, stagnant or declining wages, and limited mobility. It's no wonder that fewer students are choosing to apply to pharmacy school.