Pharmacy Growth of CVS and Walgreens at Boom Levels

Walgreens Downtown Memphis, Tennessee

The pharmaceuticals retail big boxes are in growth mode right now, according to reports from the San Francisco Chronicle. Walgreens and CVS make up 90 percent of that market, according to research cited in the article. They are putting pressure on others too. CVS recently bought out the Target pharmacy business and Walgreens purchased Rite Aid for nearly $17 billion.
Photo by Thomas R Machnitzki via Wikimedia Commons.

The article also implied that growth may be coming too quickly as the number of specialized graduates in pharmacy science may not meet demand. To get a job as a pharmacist, it is required to go to school for around six years at least to get a doctor of pharmacy degree. The aging baby boomers and retiree population are the people that demand the drugs from the pharmacies, and the need for the 24-hour pharmacy also seems to have a grip on the market.

Cheap prices are also reported to be a factor, and even the online retailers that have wreaked havoc on big boxes like Walmart stores aren't able to cut out Walgreens' and CVS's growth. In fact, it might be the opposite. The Affordable Care Act, giving more people mandated insurance, has also helped the pharmacies rise in profit as more prescriptions are paid through the insurance exchange systems. Because the pharmacy business is so complicated, many other retailers have decided to abandon them (such as Target did).

The Chronicle detailed how pharmacy benefit managers control how much drugs are going to cost for who and when the pharmacies get paid back through this "middle man" driven system. But CVS and Walgreens seem to have it down to a science, also profiting well from novelties, snacks, groceries and electronics sold inside the stores. The two companies have been involved in deals to get in on the action of benefit management through their acquisitions. This strategy has proven profitable for the two big box pharmacy chains.

Unfortunately, what is also growing in many areas of the United States, particularly the affluent areas, is the abuse of pharmaceutical drugs. Teens and young adults get into taking pills such as oxycodone, valium, percocet or Vicodin. Many of these individuals become dependent but their tolerance levels increase and they seek better highs and turn to illegal and unregulated opiates like heroin, morphine or opium. These drugs are deadly and addictive and cause many overdoses around the world where opiates are consumed by addicts and first-time users alike. Prescription drugs are the most abused drugs, next to marijuana and alcohol, by Americans 14 years old and older, according to data from the National Institute on Drug Abuse. Cold medicine is also a trending drug abused and is popularized in Southern hip hop culture in the U.S. "Lean" is cough syrup that contains codeine mixed with soda pop. The NIDA also has other reports available that are very informative on pharmaceutical abuse treatment and other drug abuse related facts. See their website to learn more about drug abuse in America.