Pharmacy deserts and the cost to rural America

Desert News

Reporter: Valerie Braylovskiy

In Heber-Overgaard, Arizona, everyone knows everyone. Tucked in the state’s White Mountains, the town has no stoplights or big-box stores — just open sky, wandering elk herds and a diner serving homemade strawberry shortcake for a few dollars. Its roughly 3,000 residents come from two unincorporated communities: Heber, settled by Latter-day Saints, and Overgaard, a former lumber hub. After merging in 1990, the twin towns became known simply as Heber-Overgaard.

Like many rural places, the town relies on a handful of businesses for daily needs. So, when its only pharmacy closed in 2013, residents suddenly faced an hour’s drive along winding forest roads (which can be dangerous in the winter) to fill prescriptions in Show Low, nearly 40 miles away.

In 2017, pharmacist Nick Bryce opened White Mountain Pharmacy, part of the Good Neighbor Pharmacy Network, in a Show Low strip mall. That’s when he realized patients were making the hourlong drive from Heber-Overgaard.

Seeing the demand, Bryce expanded in 2019, reopening Heber-Overgaard’s long-vacant pharmacy as a telepharmacy — legal in 28 states — which allows prescriptions to be filled under remote supervision. Today, White Mountain Pharmacy cares for about 8,000 patients between its Show Low and Heber-Overgaard locations.

All we want to do is help our patients, but we do need to stay above water.

It’s a precarious time for pharmacies nationwide. Both chains and independently owned stores are closing at record rates. Nearly 30% of U.S. pharmacies shut down between 2010 and 2021, and from 2018 through 2021, closures have outpaced new openings. Walgreens announced plans to close 500 locations in 2025 and plans to shutter another 700 over the next two years. Rite Aid, after a second bankruptcy filing in as many years, has ceased operations entirely. Today, 48.4 million people, or 1 in 7 Americans, live in a pharmacy desert, defined as an area more than 10 miles from the nearest pharmacy. Rural regions like Navajo County — home to Heber-Overgaard and the nation’s largest Native American reservation — are among the hardest hit, with more than 108,000 residents traveling nearly two hours round trip to refill a prescription.

Without reliable transportation, many risk losing access to care entirely. A 2023 Health Affairs Scholar study found that in nearly 14% of U.S. counties, at least half the population depends solely on independent pharmacies — residents more likely to be elderly, low-income and rural.

The crisis traces back to decades of consolidation, rising drug costs, shrinking margins and the growing power of pharmacy benefit managers, or PBMs. Once simple payment processors in the 1960s, PBMs now control much of the drug pipeline — negotiating prices, managing formularies and setting reimbursement rates. The “big three” — Caremark (CVS Health), Express Scripts (Cigna) and Optum Rx (UnitedHealth Group) — control about 80% of the market, up from less than half in 2012.

In late 2024, Congress came close to passing bipartisan reforms targeting PBMs, but House Republicans stripped the measures — along with several others — from an end-of-year spending bill at the last minute, reportedly following pushback from President-elect Donald Trump and Elon Musk. A recent Health Affairs Scholar analysis by Geoffrey Joyce, chair of the Department of Pharmaceutical and Health Economics at USC’s School of Pharmacy, found that delinking middlemen compensation from drug list prices could have cut annual drug spending by more than $95 billion — without hurting manufacturers — if only that provision had passed. Within 10 weeks, another 326 pharmacies had closed — 237 of them independent — an average of roughly four closures per day.

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“Sometimes I worry that I’m not even going to be able to get payroll,” Bryce says. “A pharmacy’s owner has to make a decision. Do they keep going into debt, do they just try to keep the lights on or do they close up shop and say uncle?”

When White Mountain Pharmacy opens at 9 a.m., there’s rarely a quiet hour. Monday mornings in October are especially busy when Bryce runs flu shot clinics. Retirees and vacationers escaping the desert heat — “Arizona snowbirds” — keep the small outpost busier than the Show Low location.

The high desert town sits along the Mogollon Rim at about 7,000 feet, surrounded by dense pine forest. Its main street runs less than six miles, lined with a few diners, a dollar store, a hardware shop and a single pharmacy — a low, green-roofed building across from the firehouse. Inside, wooden beams draped with autumn garlands frame aisles stocked with everyday medicines. Behind the counter, shelves of bagged prescriptions line the wall and bins of pill bottles cover every inch of counter space.

Outside Bryce’s office-turned-vaccine-room, a bulletin board overflows with Christmas and thank-you cards. Beside it, a whiteboard lists the pharmacy’s three employees: Tori Neisius, Cassie Watson and Cassie’s daughter, Josie, a clerk training to become a technician. In the corner, the “quote of the week” reads: “Shoot for the moon. If you miss, you just have to blame Tori.”

Tori, 36, and Cassie, 45, call each other sisters. “We’re one big happy family,” Tori says with a laugh. They process about 200 prescriptions daily. Under Arizona’s telepharmacy laws, technicians can’t give medical advice directly, so patients consult pharmacists through an in-store tablet.

To work at a remote dispensing site, including telepharmacies, technicians must complete a state-approved training program, pass a board exam and log 1,000 supervised hours — no college degree required. Many imagine pharmacy staff in white coats with years of medical training, but in towns like Heber-Overgaard, those behind the counter are often locals who learned on the job.

After leaving high school early, 22-year-old Josie is earning her GED while running the counter — the busiest post in the store where the stream of customers and refill requests rarely lets up.

Just over half the states that permit telepharmacy regulate staffing ratios, typically limiting one pharmacist to three to six technicians. When former technician Paige left for health reasons this summer, the team grew even thinner — though Bryce plans to bring on a third technician soon.

Across the country, pharmacies are struggling to keep staff and hire new ones. A 2022 National Community Pharmacists Association survey found more than three-quarters of community pharmacists experienced staff shortages, and nearly 90% struggled to fill open technician positions. Among 20,000 technicians surveyed that same year by the Pharmacy Technician Certification Board, 75% cited lack of pay — a median annual salary of $43,460 in 2024, compared with $137,480 for pharmacists — as a significant reason for leaving the profession.

For Bryce, payroll is his biggest expense after drug costs. “By the time (manufacturers) make (the drug) and it comes here, it’s passed through at least four or five different hands. In my mind, that’s why medication is so expensive.”

Today’s pharmaceutical system runs on vertical integration, with a handful of corporations owning nearly every link in the supply chain — manufacturers, insurers, PBMs, distributors and retail chains. “Vertical integration, in and of itself, is not a bad thing,” says Joey Mattingly, a pharmacotherapy professor at the University of Utah. “But you have to weigh the pros and cons of a company getting really big or so powerful that it doesn’t have to compete.”

In this system, size determines leverage. Larger chains like Walgreens and CVS use their purchasing volume to negotiate better contracts with PBMs and secure higher reimbursement rates. Independents, with less bargaining power, receive less for dispensing the same prescriptions or are excluded from “preferred” insurance networks altogether. A 2022 Drug Channels analysis found that all four major Medicare Part D plans rarely included independents in their coverage.

Bryce buys his inventory through Cencora (formerly AmerisourceBergen), one of three wholesalers that dominate U.S. drug distribution. To qualify for rebates, independent pharmacies must meet a supplier’s Generic Compliance Ratio, typically requiring them to buy about 90% of their generic drugs from a single wholesaler — cornering them into higher prices they can’t escape by working with the buying groups that are affiliated with the same distributors.

Filling prescriptions has also become a losing game. For example, one pharmacy owner shared on LinkedIn that a one-month supply of the brand-name blood thinner Eliquis cost his independent pharmacy about $582, but PBMs reimburse only $536.20 — including the patient copay — a $45 loss per prescription. Multiply that across hundreds of prescriptions each month, and independents are seeing their profits go down the drain.

“If you got the same dollar amount that a Walgreens got, you’re probably already hurting,” Mattingly says.

After facing those losses firsthand, Teresa Dickinson — owner of Melrose Pharmacy in Phoenix and co-founder of the Arizona Independent Pharmacy Coalition — became a founding member of Pharmacists United for Truth and Transparency, a watchdog group, in 2007. “That was back at a time where nobody would talk about PBMs at all,” Dickinson says. “We were so secretive with our emails. We were actually kind of afraid for our lives about exposing the problem.”

Dickinson calls her pharmacy’s 20-year survival “short of a miracle,” currently helping save another local store on the brink of closure. “All we want to do is help our patients, but we do need to stay above water.”

At White Mountain Pharmacy’s Show Low location, technician Jordan McCarthy spends most days compounding custom prescriptions — bioidentical hormones, shingles creams, nerve pain gels. After leaving a chain pharmacy, she joined Bryce’s team. “Everybody at this pharmacy in Overgaard cares about the patients,” she says. “In a lot of the bigger pharmacies, I’ve noticed that they just don’t care.”

Unofficially, she’s the in-house chemist doctors call when wholesalers can’t supply what patients need, which she does by compounding, preparing medications based on specialized formulas for individual prescriptions. Compounding is one of the few ways independent pharmacies survive outside the PBM system, since patients usually pay out-of-pocket rather than through insurance. Others, like Bryce, depend on telepharmacy, clinical services such as immunizations or the federal 340B Drug Pricing Program. The long-contested program requires drug manufacturers to sell medications at discounted prices to eligible hospitals and clinics — primarily those serving low-income or Medicaid patients — which then contract with pharmacies to dispense them. To stay afloat, many independent pharmacies use the margin between discounted purchase prices and insurer reimbursements to cover expenses like payroll and operating costs.

Meanwhile, mail-order giants and direct-to-consumer models — such as Eli Lilly and Amazon Pharmacy — promise patients lower prices but often at the expense of local pharmacies. Mark Cuban’s Cost Plus Drugs, launched in 2022, offers a different approach — still bypassing PBMs to provide transparent pricing while supporting local pharmacies. In 2023, the company created its Affiliate Pharmacy Network, partnering with nearly 7,000 independent and grocery chain pharmacies that receive a flat $12 dispensing fee per fill. The goal was to align reimbursement with actual drug costs, challenging a system that often drives pharmacies into the red... CONTINUE READING