Number of Pharmacies in Michigan Declines as More Closures are Reported

In the past few years, there have been numerous reports of pharmacies closing nationwide. The bankruptcy of Rite Aide in 2023 and recent reports of closures from CVS and Walgreens will have an impact on the number of pharmacies in Michigan as well as the population-to-pharmacy ratio statewide and regionally.

The Pharmacy and drug store industry has shown declines in recent years.

Between 2013 and 2023, the number of pharmacies in Michigan increased by a few hundred while the number of people they employed fell. In 2013, there were approximately 2,000 pharmacies employing 22,800 workers. When Michigan’s population was just under 10 million in 2013, there was roughly one pharmacy for every 4,800 people. Ten years later in 2023, the count of pharmacies rose to 2,300 as employment receded to 20,400. The state’s population has grown to over 10 million during that time, representing roughly one pharmacy to every 4,400 people in 2023. The state’s person-to-pharmacy ratio is lower than the U.S., which had 5,200 people per pharmacy in 2023. This indicates that each Michigan pharmacy potentially serves less people on average than in the U.S.

Data for the first quarter of 2024 indicates the number of pharmacies has decreased again to 2,200 while employment continued to fall to 19,200. The U.S. is also experiencing a drop in the number of overall pharmacies in recent years. If the population continues to grow as expected, then 2024’s ratio of people per pharmacy will also climb.

Pharmacies in Michigan are starting to see declines.

Source: Quarterly Census of Employment and Wages, U.S. Bureau of Labor Statistics and U.S. Census Bureau, Population Division

Occupations

Accurately reporting the number of pharmacies and how many workers they employ in the state can be difficult. The Bureau of Labor Statistics (BLS) collects firm-level data and categorizes each business into specific industries, such as pharmacies. However, there are many instances where pharmacies may only be a small portion of a larger business, such as in grocery stores or warehouse clubs. Businesses are not required to report the different lines of work within a larger store, so many of these locations may not be designated as a pharmacy in the BLS data.

Estimating the number of Pharmacists in an area is somewhat easier. A separate BLS survey collects data on the job titles of each worker in an establishment. No matter what industry a pharmacist works in, they will be reported to the BLS as such. Also, this occupation has very specific duties and is unlikely to be miscoded as a different job.

In 2023, there were 10,500 Pharmacists in Michigan that earned a median hourly wage of $64.74. This wage was more than two and a half times higher than the statewide median ($22.57). The number of Pharmacists has increased since 2014 when there were 8,900 of them in the state.

While the number of Michigan Pharmacists has increased over the past 10 years, the state’s population has grown at a slower rate. This caused the person-per-Pharmacist ratio to decline over time. Before 2020, the state averaged about 1,100 people per pharmacist. Since 2020, this ratio has declined slightly to under 1,000 people to every pharmacist. This was similar to the national-person-per-pharmacy ratio in 2023.

The number of people per Pharmacist in Michigan has declined in recent years.

Source: Occupational Employment and Wages Survey, U.S. Bureau of Labor Statistics and U.S. Census Bureau, Population Division

The number of people potentially served by Pharmacists varied substantially by region.

Having a high person-to-Pharmacist ratio could indicate a shortage of Pharmacists in a region. Just like the state’s population, there are more Pharmacists in the metro Detroit, West Michigan, and Southeast regions of the state. Those areas had lower population-to-Pharmacist ratios. The South Central prosperity region had the highest ratio of people per Pharmacists, followed by the Upper Peninsula region. Compared to the rest of the state, the Detroit Metro region had a disproportionately high number of pharmacies and Pharmacists compared to its population. This resulted in a distinctly low person-to-Pharmacist ratio for that region.

There are more pharmacies and Pharmacists in densely populated areas.

Average Number of People per Pharmacist by Michigan Prosperity Region.

Source: Occupational Employment and Wages Survey, U.S. Bureau of Labor Statistics and U.S. Census Bureau, Population Division