CVS Closing Stores

[storewanderer]

3338 Arden in Sacramento. Interesting as the Rite Aid at that intersection also closed recently a former high volume 24 hour store in the 90s and 00s. Times change.

3 stores in Chicago, 2 of which are directing customers to Target CVS.
https://www.nbcchicago.com/news/local/c ... y/3313884/

3130 Portland Ave Louisville KY (downtown). Directing customers to a CVS 3 miles away.

Downtown Winston Salem, NC directing to a CVS 1.4 miles away.

Downtown Waterloo, IA directing to a Target CVS.

[Alpha8472]

It is very common that pharmacy locations near major bus routes or homeless areas attract lots of low income pharmacy customers. They have low income Medi-Cal which is Medicaid. The pharmacies lose so much money on prescriptions that the pharmacy has to close.

Seriously, one brand name drug could result in a $400 loss. Multiply that by thousands of low income customers coming through every single month and corporate would flag the store for closure. Going just by the profit and loss numbers is all the corporate office cares about.

The insurance companies are ruthless these days. They are giving terrible reimbursement rates and even corporate chains such as CVS and Rite Aid are losing money on low income patients. The insurance companies are forcing pharmacies to give these drugs away at a loss.

Unless lawmakers pass laws to change this many pharmacies will continue to close. There will be many pharmacy deserts in areas where there are low income customers.

There are chains such as Walmart where they do have the same problems. The pharmacy may lose money, but at Walmart the customers fill up a shopping cart full of hundreds of dollars of merchandise and pay for it with food stamps or some other government assistance program. This makes up for the losses. CVS is too overpriced and most low income customers can't get groceries from CVS.

There was a Rite Aid that closed in Concord, California. The neighborhood was terrible and low income. It was a busy pharmacy, but so many customers had money losing insurance that the pharmacy was losing money on customer prescriptions.

[buckguy]

3338 Arden in Sacramento. Interesting as the Rite Aid at that intersection also closed recently a former high volume 24 hour store in the 90s and 00s. Times change.

3 stores in Chicago, 2 of which are directing customers to Target CVS.
https://www.nbcchicago.com/news/local/c ... y/3313884/

3130 Portland Ave Louisville KY (downtown). Directing customers to a CVS 3 miles away.

Downtown Winston Salem, NC directing to a CVS 1.4 miles away.

Downtown Waterloo, IA directing to a Target CVS.

Portland is miles from downtown Louisville and the store is not far from a Kroger.

One of the Chicago closings is in the same shopping center as the Target. The store on Armitage within a half mile of not one but 2 other CVS stores and is in one of the wealthiest sections of Chicago's near north side. The Cicero Ave. store is within a mile of a half dozen Jewel-Osco and Walgreen stores. There really isn't much to these closings, esp. when you consider that CVS was a latecomer with far less density of stores than the competition---they picked up some free standing Oscos (usually old Jewel stores) as their base.

[storewanderer]

3338 Arden in Sacramento. Interesting as the Rite Aid at that intersection also closed recently a former high volume 24 hour store in the 90s and 00s. Times change.

3 stores in Chicago, 2 of which are directing customers to Target CVS.
https://www.nbcchicago.com/news/local/c ... y/3313884/

3130 Portland Ave Louisville KY (downtown). Directing customers to a CVS 3 miles away.

Downtown Winston Salem, NC directing to a CVS 1.4 miles away.

Downtown Waterloo, IA directing to a Target CVS.

Portland is miles from downtown Louisville and the store is not far from a Kroger.

One of the Chicago closings is in the same shopping center as the Target. The store on Armitage within a half mile of not one but 2 other CVS stores and is in one of the wealthiest sections of Chicago's near north side. The Cicero Ave. store is within a mile of a half dozen Jewel-Osco and Walgreen stores. There really isn't much to these closings, esp. when you consider that CVS was a latecomer with far less density of stores than the competition---they picked up some free standing Oscos (usually old Jewel stores) as their base.

There is plenty to the closures, and the other 900 closures CVS has done or will be doing. CVS buys all of the competition, plus Caremark, effectively forcing many customers to only get prescriptions from CVS or pay a steep monetary cost, and then does this where they close stores, often in poorer neighborhoods.

Since CVS makes so much money off of the Caremark side of these transactions, they are not losing money the way other pharmacy operators are on so many prescriptions.

[Alpha8472]

Sadly Medicaid and Medi-Cal don't go through the CVS/Caremark network so CVS loses tons of money on pharmacies that have a lot of low income Medi-Cal patients.

So CVS will continue to close these pharmacies in low income areas. CVS will only focus on pharmacies in richer areas with profitable customers with better paying insurance.

Caremark insurance is pressuring customers to use mail order. This means that the customers with good insurance are using mail order and the pharmacies are stuck with low income customers who cause the pharmacy to lose money. This will cause even more CVS pharmacies to close. It is a vicious cycle. Caremark's push to mail order is killing off their own brick and mortar pharmacies.

[storewanderer]

Sadly Medicaid and Medi-Cal don't go through the CVS/Caremark network so CVS loses tons of money on pharmacies that have lot of low income Medi-Cal patients.

So CVS will continue to close these pharmacies in low income areas. CVS will look only focus on pharmacies in richer areas with profitable customers with better paying insurance.

Caremark insurance is pressuring customers to use mail order. This means that the customers with good insurance are using mail order and the pharmacies are stuck with low income customers who cause the pharmacy to lose money. This will cause even more CVS pharmacies to close. It is a vicious cycle. Caremark's push to mail order is killing off their own brick and mortar pharmacies.

Interesting, at some point these pharmacies are going to have to quit accepting these programs that do not reimburse adequately. This will force the politicians to properly fund those programs rather than bleeding out the pharmacies to fund various other pet projects.

With as poorly as CVS runs its pharmacies, with reduced hours, difficulty getting anyone to answer the phone if you call, and other issues, it may be better if it is all mail order except for immediate need drugs.

[ClownLoach]

Sadly Medicaid and Medi-Cal don't go through the CVS/Caremark network so CVS loses tons of money on pharmacies that have a lot of low income Medi-Cal patients.

So CVS will continue to close these pharmacies in low income areas. CVS will only focus on pharmacies in richer areas with profitable customers with better paying insurance.

Caremark insurance is pressuring customers to use mail order. This means that the customers with good insurance are using mail order and the pharmacies are stuck with low income customers who cause the pharmacy to lose money. This will cause even more CVS pharmacies to close. It is a vicious cycle. Caremark's push to mail order is killing off their own brick and mortar pharmacies.

But isn't the intent to "reinvent" the pharmacy store with Health Hub and add doctors offices etc., with the Minute Clinic that Aetna is already steering their insured patients to? So even if you don't come in anymore for your pills, you come in when you need to see a NP or other care that doesn't quite meet the necessity level of "Urgent Care." CVS/Aetna save a fortune when you go to Minute Clinic instead of a urgent care center, and they will keep building these as a result.

I don't agree that the push for mail order is going to cause CVS to close more stores, quite the opposite. The intent is just like other subscription based services. You go see the doctor, now you need a new ongoing medication due to a new diagnosis and you go get the first bottle at CVS today. They steer you to automatic 90 day supply on your refills and now you're locked in. But without the physical pharmacy to get that first script filled the chances you'll move are slim.

I do agree that they will happily close stores in low income areas due to high Medicaid use though. But there has to be more to it... Costco has announced they now accept both Medicaid and Medi-CAL (California version). So if everyone loses money on these prescriptions then why would Costco sign up to fulfill them?

[Alpha8472]

The difference is that at Costco the customers fill up a shopping cart of $200 or $300 worth of groceries everything. So the pharmacy brings customers in to the store to shop. The same with Walmart. You may lose some money on prescriptions, but the profit from the shopping cart of groceries more than makes up for it.

CVS is not a place where you see customers loading up a full shopping cart full of merchandise. The prices are so high, that you buy very little. In fact, you would just use the pharmacy and then shop at Costco or Walmart for the rest of your purchases.

Not all drugs lose money on Medicaid. Pharmacies make money on the common medications such as generic drugs for blood pressure, high cholesterol, diabetes, etc. The money losing drugs are brand name drugs such as Ozempic, Mounjaro, brand name insulin, etc.

So most common drugs make money. The pharmacies could theoretically not stock more expensive medications, but that would be a cruel thing to do. I know some CVS, Costco, and Walgreens pharmacies claim they don't have Ozempic or Mounjaro. Or they claim there is a shortage. They simply don't stock it so that they don't lose money on those drugs.

If I were a shrewd businessman I would not stock any money losing drugs.

Pharmacies are seen as charities. They are there to help people by giving out medications at a loss. Where would the low income welfare people get their medications?

This is why mom and pop pharmacies are dying. They give out those drugs such as Ozempic and Mounjaro at a loss and then they go out of business. Meanwhile Walgreens says they don't have any Ozempic or Mounjaro. This pushes those low income people to independent pharmacies and that puts them out of business.

[ClownLoach]

The difference is that at Costco the customers fill up a shopping cart of $200 or $300 worth of groceries everything. So the pharmacy brings customers in to the store to shop. The same with Walmart. You may lose some money on prescriptions, but the profit from the shopping cart of groceries more than makes up for it.

CVS is not a place where you see customers loading up a full shopping cart full of merchandise. The prices are so high, that you buy very little. In fact, you would just use the pharmacy and then shop at Costco or Walmart for the rest of your purchases.

Not all drugs lose money on Medicaid. Pharmacies make money on the common medications such as generic drugs for blood pressure, high cholesterol, diabetes, etc. The money losing drugs are brand name drugs such as Ozempic, Mounjaro, brand name insulin, etc.

So most common drugs make money. The pharmacies could theoretically not stock more expensive medications, but that would be a cruel thing to do. I know some CVS, Costco, and Walgreens pharmacies claim they don't have Ozempic or Mounjaro. Or they claim there is a shortage. They simply don't stock it so that they don't lose money on those drugs.

If I were a shrewd businessman I would not stock any money losing drugs.

Pharmacies are seen as charities. They are there to help people by giving out medications at a loss. Where would the low income welfare people get their medications?

This is why mom and pop pharmacies are dying. They give out those drugs such as Ozempic and Mounjaro at a loss and then they go out of business. Meanwhile Walgreens says they don't have any Ozempic or Mounjaro. This pushes those low income people to independent pharmacies and that puts them out of business.

Costco runs a 5% or less markup, so there's no way even a $300 basket could offset a big prescription. And furthermore they cannot legally exclude non members from using the pharmacy, at least not in California nor can they charge them more. So they must have something worked out where they're going to be reimbursed at a reasonable rate otherwise there is zero reason to take on this business.

[Alpha8472]

There are ways to stay profitable even while accepting Medicaid. Simply tell customers that they are sold out of those expensive drugs. Costco is a shrewd business and they will fill the profitable drugs and tell customers they are out of the money losing drugs.

In addition, the profit from vaccinations is crazy high. You do a single shingles vaccination and you have made enough money to offset the losses from many money losing prescriptions.

You can also sell COVID tests. The COVID tests are covered by Medicaid and make the pharmacy quite a bit of profit. Vaccinations and COVID tests are keeping those pharmacies afloat.

Costco Pharmacy has a lot of higher income customers. Those customers have profitable insurance where Ozempic actually can make the pharmacy over $100 in profit. So you sell Ozempic to the customers with profitable insurance and then tell the Medicaid low income customer that you are sold out of Ozempic.

At the pharmacy you run the prescription through insurance. Then you can see what the reimbursement is right away. If it is a money loser of course a shrewd business person will say "Sorry there is shortage of the medication. Try another pharmacy." There is no requirement that a pharmacy give a medication away at a loss or free of charge to a customer. Unfortunately a pharmacy is a business not a non-profit charity.