Oregon 2nd worse in the nation for retail pharmacy access, new analysis finds

By Antonio Sierra (OPB) and Amelia Templeton (OPB)
June 5, 2024 1 p.m.

Thirty-six pharmacies closed last year, and several more have closed so far in 2024.

Oregon has the second fewest retail pharmacies per capita in the nation — with poorer access to pharmacies than any state except Alaska, according to a new analysis by the Associated Press.

The AP obtained proprietary data from the National Council for Prescription Drug Programs, a standards development group for the pharmacy industry.


Oregon had 610 retail pharmacies statewide as of February, amounting to just 14.4 pharmacies per 100,000 people.

A masked pharmacist is looking down, standing behind a counter that has three decorative jars full of pills that are layered by color.

FILE: Medicap Pharmacy staff pharmacist Ryan Baker in December 2021 works on prescription orders at this independent pharmacy in Talent, Ore

April Ehrlich / OPB

And that number is falling, according to Brian Mayo, executive director of the Oregon Pharmacy Association. Thirty-six pharmacies closed last year, and several more have closed so far in 2024.

“With how few pharmacies Oregon has, every pharmacy should be considered a critical access pharmacy,” Mayo told OPB.

The AP’s tally does not include hospital inpatient pharmacies or mail-order pharmacies.

Chain pharmacies are also more common in Oregon than other states and independently-owned pharmacies are rarer here, the analysis found. Seventy percent of retail pharmacies in Oregon self-identified as being owned by a chain, compared to 61% nationwide.

Murray’s Drug is a small independent pharmacy chain that largely serves patients from frontier counties, areas with six or fewer people per square mile. Murray’s is headquartered in Heppner in southern Morrow County, but its service area extends into zip codes that are either underserved or have no pharmacies whatsoever.

“The towns of Arlington, Irrigon and Umatilla do not have pharmacies anymore,” said Ann Murray, who co-owns Murray’s Drug with her husband John. “Even Hermiston is overwhelmed with the chains going out (of business).”

Many of the economic challenges pushing pharmacies to close aren’t unique to Oregon. Across the U.S., more than 7,000 pharmacies have closed since 2019, according to data from University of Pittsburgh researcher Lucas Berenbrok, who considers that estimate conservative.

An industry that saw waves of store growth before the COVID-19 pandemic faces headwinds like falling prescription reimbursement, persistent theft and changing shopping habits.

Those challenges have created an incentive for retail giants to shutter underperforming brick-and-mortar drug stores and push mail-order services, according to Mayo.


“It’s a way for them to be more profitable,” he said.

FILE: Pharmacist Anna Charapata fills an order at Murray's Drug, an independent pharmacy in Condon, Ore., in October 2022.

FILE: Pharmacist Anna Charapata fills an order at Murray's Drug, an independent pharmacy in Condon, Ore., in October 2022.

Kristian Foden-Vencil / OPB

The Murrays were also skeptical of mail order pharmacies’ effectiveness in rural Oregon. While Murray’s Drugs runs tri-weekly deliveries to several communities with no pharmacies, Ann Murray said mail order pharmacies cannot offer the same level of service for illnesses that require quick turnaround prescriptions like COVID-19 and the flu.

A 2025 fight against pharmacy benefit managers

The closures in Oregon — and nationwide — have also brought scrutiny to the opaque system that sets drug prices and determines how much pharmacists make dispensing them.

Most insurers rely on intermediaries known as pharmacy benefit managers to negotiate prices and decide what drugs are covered for millions of Americans.

It’s a highly consolidated industry: the three largest PBMs control about 80% of the marketplace. What’s more, those PBMs are themselves subsidiaries of several of the largest vertically integrated health care companies in the country: CVS Health, UnitedHealth Group and Cigna.

A recent audit by the Oregon Secretary of State suggested that one reason chain pharmacies have been able to outcompete independent pharmacies is because they are subsidiaries of those same health care giants that use their pharmacy benefit managers to negotiate favorable reimbursements with insurers.

National chains, the audit found, were reimbursed twice the amount that independent pharmacies were for selected drugs reviewed in the audit.

Independent pharmacies have long lobbied the Legislature for more transparency in the PBM industry, and to curb the losses felt by pharmacies due to PBM’s reimbursement policies.

Earlier this year, Oregon lawmakers passed legislation to tighten regulations around PBMs, requiring them to be licensed by the state among other rules. Independent pharmacies felt that the bill was watered down and want to return with stronger legislation in 2025.

The Murrays said PBMs are the primary reason pharmacies are closing around Oregon. And they anticipate more pressure from expected lower reimbursement rates from Medicare Part D, the insurance program’s prescription plan.

John Murray predicted Oregon’s pharmacy closure problem to get worse without further government action.

“There’s going to be a tremendous storm coming for Medicare plans and pharmacy coverage,” he said.

The Associated Press contributed to this report.