Independent Pharmacy Overview: Part One

In 1960, a teenaged Delbert Cranford got an after-school job as a stock boy. And it was there at Mann Drug in Asheboro—while lining up shelves of shampoo and aspirin—that he figured out his future.

“I watched the pharmacist help people, and I started to think about what I wanted to do when I was done with high school,” Cranford says. “I already knew I enjoyed chemistry and I wanted to help people, so I decided I’d study pharmacy.”

Cranford went on to run his own drug store, Denton Drug in Denton, North Carolina, in addition to becoming part-owner of several other drug stores in the area, including Asheboro Drug and Randleman Drug.

During his 50-plus years in the business, Cranford has seen the world of pharmacy change. And perhaps more importantly, as a successful businessman he has learned how to adapt to those changes and stay competitive—even when the big box retailers and chain drug stores started popping up around town.

“I think we have been successful because we get to know our customers. They are like family to us,” Cranford says. “We know what they need and we know their situation. And they trust us.”

John Norton, spokesman for National Community Pharmacists Association (NCPA), says independent community pharmacies play an important role in healthcare and that for many people a pharmacist is the most accessible healthcare provider.

There are currently about 22,500 independent pharmacies in the United States, and these pharmacies dispense nearly half of the nation’s retail prescription medicines, Norton says.

All told, independent pharmacies are an $81.4 billion marketplace annually. They fill 1.38 billion prescriptions a year—about 201 a day, per pharmacy—and employ 314,000 people on a full- or part-time basis.

The History of the U.S. Pharmacy

A hundred-plus years ago, the neighborhood apothecary or drugstore was an important part of a community. Many served as more of general store and meeting place, complete with a soda fountain and diner-style food.

Whether you felt a milkshake, an aspirin, or a shot of cod liver oil could cure your ills, you likely could find it at your neighborhood pharmacy.

Before medication was mass produced, the pharmacists at these stores worked with doctors to create from-scratch elixers, pills, and healing ointments. They also relied on centuries-old herbal remedies.

When Prohibition started, the popularity of the drugstore grew dramatically, according to the American Institute of the History of Pharmacy (AIHP).

Alcohol was illegal and bars were closed, but people still needed a place to gather and socialize. So the neighborhood soda fountain became the place to talk sports, politics and gossip. Plus, with a doctor’s prescription, you might even be able to buy a fifth of whiskey because alcohol was still available for medicinal purposes.

The first half of the 1900s also brought a push for pharmacy regulations, and requirements were set for a pharmacist’s education. In the early days, pharmacy was a trade largely learned via an apprenticeship.

But in the interest of making sure pharmacists were properly trained across the board, states started to require a formal education and degree if a person wanted to be a licensed pharmacist, according to the AIHP.

The second half of the past century brought significant change, too. More and more medicines were developed and many offered actual cures, whereas in the past they often only offered minor symptom relief, if that.

Pharmacists largely stopped mixing their own drug compounds and relied on mass-produced pills and lotions. Consumer confidence in using medications grew as they saw their effectiveness, and they eagerly sought out medicines for a growing list of ills.

Of course, all the progress also changed the business dynamic of the community drug store. In the early days, a pharmacist sold few prescriptions and relied heavily on sales of soda, cosmetics, magazines, cigarettes, greeting cards, etc., according to the AIHP.

But as prescriptions became the big seller, many had to make in-store changes to focus on filling all the scripts. The main casualties seem to have been the soda fountain and café, which required a lot of time-consuming work for minimal return.

Staying Nimble

Prior to the 1980s, small, independent pharmacies were largely the norm, NCPA’s Norton says, and there were more than 40,000 of them in the U.S. But between 1980 and 2000, chain drugstores such as Walgreens and Rite Aid and big retailers like Walmart spread widely across the country.

By 2000, more than 17,000 independent pharmacies had lost the fight against these Goliaths and shuttered their stores.

Interestingly though, as Norton points out, the independent pharmacies that weathered that boom are still going strong. Since 2000, the number of independent drugstores has held at roughly 22,500. Today, 40% of all pharmacies are independently-owned shops.

So how do they survive when the chain stores have been the demise of many small retailers?

Read Part Two in our series to learn more, or Download the White Paper for the full story!