11/05/2025
Our state recently hired an independent company to study pharmacy operational costs. This term “cost of dispensing” is the average operational cost for each filled prescription, and includes costs such as rent, prescription vials, wages, and computer equipment. Cost of dispensing does NOT include the pharmacy’s purchase cost of the dispensed medication.
While the study was commissioned to determine whether Kansas Medicaid rates are still fair to pharmacies (these rates have not been updated in a long time), we wanted to discuss a different issue that this study uncovered.
According to the study, pharmacy operational costs per prescription were:
$15.85 per prescription for independently owned pharmacies
$11.38 per prescription for chain pharmacies
At first glance, some might say that chain pharmacies are merely more efficient. Maybe these enormous companies can leverage their size to bring down costs? In addition, chain pharmacies frequently don’t offer extra services found at independent pharmacies, such as prescription delivery or specialized medication packaging. Some people might believe that services like these are driving up operational costs for independents.
If you ask anyone in the pharmacy industry, though, it’s VERY clear why it costs the average independent pharmacy nearly 40% more than the average chain pharmacy to fill each prescription: employee staffing levels. To cut costs and improve profits, many chain pharmacies have resorted to staffing their pharmacies at dangerously low levels.
Short-staffed chain pharmacies are not a new phenomenon. We have addressed the topic on our page numerous times over the years. And in 2020, The New York Times even published an article on the topic titled, “How Chaos at Chain Pharmacies Is Putting Patients at Risk”. https://www.nytimes.com/2020/01/31/health/pharmacists-medication-errors.html
With the results of this study, we now actually have real data showing just how understaffed these chain pharmacies are. Keep in mind, these pharmacies aren’t necessarily underpaying their employees…they just barely have anyone working behind the counter. If you walk by a typical chain pharmacy, it’s not unusual to see only a handful of employees. And at any given time, many chain pharmacies have fewer employees behind the counter than a typical fast-food restaurant.
While understaffed pharmacies often have long waits and decreased levels of service, that’s not the real problem. The true issue of understaffed pharmacies is safety. It’s one thing for an understaffed fast-food restaurant to give you the wrong type of burger, but at pharmacies even a simple error can be fatal. In the 2020 New York Times article, one chain pharmacist described working in an understaffed pharmacy as, “a danger to the public”.
Things have only become worse since that article was written. There are no laws requiring companies to safely staff pharmacies. In fact, the only time we have ever heard of a pharmacy getting in trouble for being short-staffed was the Canton, OH CVS in 2024 that was literally a MONTH behind in filling prescriptions.
https://www.cleveland.com/news/2024/02/an-ohio-cvs-store-was-a-month-behind-on-filling-prescriptions-state-regulators-slapped-it-with-a-250000-fine.html
Over the last couple of years, our pharmacy has been forced to make the difficult decision of terminating contracts with insurance plans that pay at unsustainably low rates. Many other independent pharmacies throughout Kansas have chosen the same path, and it seems that the only way a pharmacy can continue to accept some of these insurance plans is with unsafe staffing levels. But unlike the CEOs of enormous chain pharmacies, we put the health and safety of our patients first.
We are frequently asked why so many people work at our pharmacy, especially by new patients who are used to the way other pharmacies operate. Usually, we explain that the real question is why so few people are working behind the counter at other pharmacies. How are these pharmacies able to safely take care of their patients? When it comes to choosing a pharmacy, there are multiple factors that need to be considered, and whether the pharmacy has enough employees to safely fill your prescriptions should be near the top of the list.
