The new “apothecary‑style” shops look sleek, but they merely shrink the storefront while the PBM‑driven economics that gutted local drug access stay untouched.
Is a format change really a fix?
CVS Health is rolling out dozens of pharmacy‑only locations this year, touting them as a way to “increase access to pharmacy care.” The company announced the first of “nearly 20 apothecary‑style stores” and a plan to open 60 new sites in 2026, a third of which will be pharmacy‑only. At first glance, the move seems like a win for city neighborhoods that have lost full‑service drugstores. In reality, the rollout is a cosmetic redesign that masks a deeper problem: the profit‑first pharmacy‑benefit‑manager (PBM) model that has been systematically eroding neighborhood pharmacies for years.
CVS has already closed about 10 percent of its locations over the past three to four years, not because the pharmacies were unprofitable on prescriptions but because “front‑of‑store sales were declining and stores were too big, creating unnecessary overhead” (eMarketer). Shrinking the footprint does not reverse the economics that forced those closures, and it leaves residents with a thinner pickup hub rather than a true community health resource.
Below, we unpack what the pharmacy‑only format actually entails, why the underlying PBM dynamics matter for city health officials, and what a realistic path forward looks like.
What does a pharmacy‑only store actually look like?
CVS markets the new stores as “apothecary‑style” locations that focus solely on prescription dispensing, over‑the‑counter (OTC) products, and limited health‑service offerings. The company’s press release notes that these sites sit alongside its traditional formats—full‑service front stores, store‑in‑store pharmacies, MinuteClinic‑anchored locations, and stores paired with Oak Street Health (PYMNTS).
In practice, the pharmacy‑only model strips away the grocery, household goods, and impulse‑buy aisles that once generated the bulk of a CVS store’s profit. The idea is to cut overhead, reduce rent, and lean into the “healthcare‑first” narrative the company has been promoting.
However, the format also eliminates the retail traffic that subsidizes prescription margins. When a shopper comes in for a snack, a bottle of shampoo, or a seasonal item, they are more likely to pick up a prescription refill or ask a pharmacist a question. By removing those ancillary sales, the pharmacy‑only store becomes a pure prescription hub—exactly the kind of low‑margin operation that PBMs have been squeezing for years. The redesign therefore trades breadth for depth, but depth alone does not solve the access problem; it merely reshapes it.
How many neighborhood pharmacies has CVS already lost, and why?
The numbers speak for themselves. Since 2022, CVS has shuttered roughly 10 percent of its U.S. footprint, a trend that mirrors the broader decline of independent and chain drugstores in urban cores. The closures are not driven by a lack of prescription volume; rather, they stem from “declining front‑of‑store sales and stores that were too big, creating unnecessary overhead” (eMarketer).
In many cities, a full‑service CVS was the only pharmacy within a half‑mile radius, serving as a critical point of care for seniors, low‑income families, and people without reliable transportation. When those stores disappear, the remaining pharmacy‑only sites often sit in the same building but with significantly reduced square footage. A former 15,000‑square‑foot neighborhood anchor might become a 5,000‑square‑foot pickup point, offering fewer OTC options, no health‑clinic space, and limited private consultation rooms. For residents who relied on the broader services—blood‑pressure checks, flu shots, health‑education workshops—the loss is palpable. The “access” narrative that CVS touts ignores the fact that access is more than a prescription drop‑off; it’s a suite of services that support preventive health.
Why does the PBM model keep community pharmacy access thin?
At the heart of the issue is the pharmacy‑benefit‑manager (PBM) business model that dominates U.S. prescription drug reimbursement. PBMs negotiate drug prices with manufacturers, process claims for insurers, and, crucially, determine the “spread” that pharmacies earn on each prescription. Because PBMs are paid a percentage of the total drug spend, they have a financial incentive to steer patients toward lower‑cost, high‑volume drugs and to squeeze pharmacy reimbursements. The result is chronic under‑funding of the dispensing service itself.
City health officials have long observed that PBM rebates and fees do not flow back to the community pharmacy level. Instead, they accrue to insurers and the PBMs themselves, leaving the storefront with razor‑thin margins. When a pharmacy’s profit hinges on ancillary retail sales, any reduction in those sales—whether from a pandemic, shifting consumer habits, or a deliberate store‑size cut—pushes the operation toward the brink. That is why CVS’s decision to close larger stores and open smaller, pharmacy‑only sites does not address the root cause: the PBM‑driven reimbursement structure that makes community pharmacies financially fragile.
What does a full‑service store become for city officials?
From a municipal planning perspective, a pharmacy‑only location looks like a “pickup hub”: a place where residents can collect mail‑order prescriptions, grab a few OTC items, and perhaps receive a flu shot. On paper, that satisfies a basic need. But the transformation has several hidden costs:
- Reduced walk‑in traffic – Without a grocery or convenience component, fewer people enter the store, limiting spontaneous health‑service interactions.
- Loss of employment – Smaller footprints mean fewer staff hours, which disproportionately affect low‑wage workers who often live in the same neighborhoods they serve.
- Erosion of public‑health programming – Many CVS locations host free blood‑pressure screenings, diabetes education, and vaccination clinics. When the space shrinks, these programs are cut or moved to less accessible venues.
- Increased transportation burden – Residents who once walked a block to a full‑service pharmacy may now need to travel farther to a larger store that still offers a broader range of services, exacerbating inequities for those without cars.
The urban‑community penalty highlighted in a recent Kindalame piece on cannabis policy illustrates a parallel dynamic: regulatory and market forces often penalize city neighborhoods already grappling with housing insecurity and limited access to essential services. The pharmacy‑only rollout follows the same pattern—policy‑driven redesign that looks like progress but leaves the most vulnerable even more exposed.
Can redesign ever replace policy change?
Aesthetic redesigns and store‑size reductions are tactical, not strategic. They can improve the customer experience for a subset of shoppers, but they cannot restructure the reimbursement ecosystem that forces pharmacies into a perpetual cost‑cutting race. A more durable solution would require policy interventions that realign PBM incentives, such as:
- Mandating transparent rebate reporting so that a portion of savings is passed to dispensing pharmacies.
- Establishing minimum reimbursement rates for community pharmacies, similar to how some states have set “fair pricing” rules for generic drugs.
- Supporting community‑owned pharmacy models through grants or low‑interest loans, thereby diversifying the market away from PBM‑dominated chains.
- Integrating pharmacies into public‑health planning, ensuring that any store closure triggers a city‑level impact assessment and a requirement to replace services within a reasonable radius.
The managed‑care narrative in a 2023 Kindalame article argues that the health system must be “accessible and responsive to the dynamic needs of individuals and communities” (Kindalame). That vision cannot be realized by merely swapping a grocery aisle for a sleek counter; it demands a fundamental shift in how prescription drugs are financed and how community health resources are valued.
What actions can city health officials and community advocates take now?
- Audit each pharmacy‑only conversion – Require developers to submit a community‑impact study before approving a store‑size reduction.
- Leverage zoning tools – Use conditional‑use permits to require that any pharmacy‑only site maintain a minimum square footage for OTC and health‑service space.
- Partner with local health departments – Co‑locate vaccination clinics, mobile health units, or telehealth kiosks in the new stores to preserve some of the lost services.
- Lobby for state‑level PBM reform – Join coalitions that push for transparent pricing and fair reimbursement, echoing the broader managed‑care reform agenda.
- Support alternative delivery models – Encourage community pharmacies to explore subscription‑based medication delivery, which can offset low prescription margins while keeping patients in the neighborhood.
By combining regulatory oversight, strategic partnerships, and advocacy for PBM reform, city leaders can prevent the pharmacy‑only rollout from becoming a veneer for continued disinvestment.
Your turn: Do you think pharmacy‑only stores will ever restore true neighborhood medicine access, or are they simply a stop‑gap that masks deeper systemic failures? Share your experiences, data, or policy ideas in the comments below—let’s turn this conversation into concrete action.