Citing underperformance, Wakefern Food Corp. is closing 30% of the ShopRite pharmacy locations across its market areas.
Keasbey, N.J.-based Wakefern on Tuesday confirmed published reports that it plans to shut 62 of its 209 ShopRite pharmacies over the next month and sell their prescription files to CVS Health. The retail food cooperative declined to disclose the affected locations and the sale price for the pharmacy patient files.
“The pharmacy industry is highly competitive, and we were unable to sustain sufficient sales despite our marketing efforts, which led to the difficult decision to close these store pharmacies,” Wakefern spokeswoman Karen O'Shea said in an email statement. “ShopRite remains committed to delivering a wide assortment of healthy, affordable foods and wholesome meal solutions with the exceptional ShopRite value and service our customers expect.”
All support staff from the ShopRite pharmacies slated to close will be offered positions at other ShopRite stores, according to Wakefern. Pharmacists and pharmacy technicians from the affected locations will have an opportunity to interview with CVS.
“CVS is a trusted leader in the pharmacy business, and we are working together to make this a seamless transition for our pharmacy customers and associates,” O'Shea stated.
Prescription files at the pharmacies being closed will automatically transfer to a nearby CVS Pharmacy location, Wakefern reported, adding that impacted customers will be notified and signs with further information will be posted at store pharmacy counters.
“The majority of our ShopRite pharmacies — 147 pharmacies — will remain open and continue to serve our pharmacy customers,” O'Shea said in the email.
ShopRite’s COVID-19 vaccination program, announced last month, won’t be affected by the planned pharmacy closings, according to the company. So far, O'Shea said, the supermarket chain’s pharmacies have provided coronavirus vaccines to more than 30,000 people.
Overall, the ShopRite banner includes about 280 independently owned and operated supermarkets in New Jersey, New York, Pennsylvania, Connecticut, Delaware and Maryland.
In recent years, changing economics in the prescription drug industry have squeezed retail pharmacy operators, making it especially difficult for smaller players to complete.
Rising drug prices, shrinking profits on generic drugs (now about nine out of every 10 prescriptions), the need for scale to lower drug procurement costs and booming growth in expensive specialty pharmaceuticals (which can require added services and special handling) have fueled consolidation among drug chains, drug distributors and pharmaceutical manufacturers. Cuts in Medicare and Medicaid reimbursements and costs like direct and indirect remuneration (DIR) fees also have sliced margins, with small pharmacy operators in particular feeling the impact.
For example, last March, St. Louis-based grocer Schnuck Markets sold its retail and specialty pharmacy businesses to CVS. With the deal, CVS took over operation of 99 of the Schnucks in-store pharmacies under the CVS Pharmacy brand, and prescription files of 11 Schnucks pharmacies were transferred to other CVS locations.
In October 2019, Western grocer Raley’s announced it was closing 27 of its 96 pharmacies because of “challenges in the pharmacy space.” Prescription files for those locations were sold to Walgreens, CVS and Rite Aid. And just over a year earlier, Stater Bros. shut down its 22 SuperRx Pharmacies and sold their prescription records and inventory to CVS.