PUTT Blog Guest Post | Florida’s independent pharmacy owners are paying a hidden tax on caring for their communities - and it’s coming out of their own pockets
Dawn Butterfield, RPh | SPAR
Preliminary results from an anonymous survey of Florida pharmacy owners show the toll: nearly three-quarters reported frequent or occasional trouble paying normal business expenses. 42% put personal money into their pharmacies to cover shortfalls, including 30% who contributed at least $50,000 each. And 84.6% would not recommend opening or purchasing an independent pharmacy in Florida today. The survey remains open through November 15, and we encourage Florida independent pharmacy owners to participate.
Here’s how this hidden tax on serving insured patients works: the pharmacy buys your medication, fills your prescription, and pays the people who make sure you receive it safely. But the insurance payment may not even cover what the pharmacy paid to buy the medication.
Imagine spending $100 to buy a medication and receiving only $85 to provide it to a patient. You’re already short $15, and still have to pay your employees, the prescription vial, computer transmission charges, rent and power. Even if that $85 includes a 25-cent dispensing fee, the bills remain. Someone must cover the difference, and too often it’s the pharmacy owner.
The pressure comes from both what pharmacies are paid and whether they can serve the patient at all.
88% of respondents cited payments that do not cover the cost to buy the medication, 84% cited the inability to earn a reasonable margin, and 73% cited patients being steered elsewhere. Owners also reported concerns about audits, fees, and exclusion from insurance networks. Together, these pressures leave pharmacies struggling to pay their bills while doing the work their communities need.
The survey also raises concerns consistent with what we observed in recently obtained Florida Medicaid data from the Agency for Health Care Administration (AHCA): a pattern we call pharmacy “quiet quitting.”
Pharmacies may remain enrolled in Medicaid while filling fewer Medicaid prescriptions. Declining prescription counts alone cannot establish why, but the survey responses help explain the financial pressures that can lead owners to limit prescriptions they cannot afford to fill. A pharmacy can still appear on a participating-provider list while patients’ practical access to its services shrinks.
These findings are also consistent with our tracking of approximately two independent pharmacy closures per week in Florida since the beginning of the year. Meanwhile, new permits are dominated by out-of-state pharmacies, hospital or insurer-owned pharmacies, 340B-focused operations, and compounding-only pharmacies. Access to a large market like Florida creates opportunities for out-of-state pharmacies to expand their cash-pay business. But a permit allowing a pharmacy elsewhere to ship prescriptions into Florida does not necessarily replace the neighborhood pharmacy that closed, or restore a local pharmacist that patients can walk in and speak with.
The resilience and ingenuity of independent pharmacy owners are evident in how they are responding. More than half anticipate or probably anticipate a major change in their business model. Some are building a future around compounding, wellness, peptides, and personalized services that customers seek out and are willing to pay for directly. 46% of respondents want more than half their revenue to come from cash-paying customers, including 34% who want that share to exceed 75%. These owners are applying their clinical knowledge and entrepreneurial creativity to services they can price to cover their costs - without an insurance middleman deciding what their work is worth.
As more owners look toward cash-pay services, protecting traditional pharmacy compounding becomes an important legislative priority.
Compounding allows pharmacists to prepare personalized medications for patients whose needs are not met by commercially available products. In our survey, 84% of respondents rated protecting 503A compounding an eight or higher out of 10. For owners building a future around personalized care, legislation that preserves access to appropriate compounding, and avoids unnecessary barriers, supports both patient choice and the ability to sustain their businesses.
Some respondents also mentioned adding test-and-treat services. We are reluctant to describe those services as a path away from the payment problem unless patients pay directly. If they still depend on insurance payments, the pharmacy remains dependent on a third party to decide what it will be paid. Adding a service does not fix the business model if its payment still fails to cover the cost of providing it, however patients WILL pay out of pocket for services they desire.
Survey respondents also expressed strong support for leveling the playing field through pharmacist licensure.
We identified at least a dozen states that require an out-of-state pharmacy’s pharmacist-in-charge to be personally licensed in the state receiving its prescriptions. Florida does not impose that same requirement on pharmacies shipping into our state. Florida pharmacy owners seeking to expand into those states must obtain additional pharmacist licenses and meet the associated requirements, while out-of-state competitors entering Florida do not face an equivalent Florida pharmacist-license requirement. 69.2% of respondents rated requiring the pharmacist-in-charge of an out-of-state pharmacy serving Florida patients to hold a Florida pharmacist license an eight or higher out of 10. 50% gave it the highest rating of 10. Our own Florida pharmacy entrepreneurs deserve a fair opportunity to compete as they work to build sustainable businesses.
In the “Free State of Florida,” that entrepreneurial spirit should have room to thrive. Pharmacy owners deserve the freedom to build a business, earn a living, and care for their neighbors and their own families without personally financing the difference between what care costs and what an insurance middleman chooses to pay. Their ability to adapt deserves recognition, but resilience cannot mean an endless expectation that they absorb losses.
This small, voluntary survey offers an early warning: roughly one-third of respondents expect to reduce or eliminate insurance participation. Florida wants a future where both innovative cash-pay services and the community pharmacies patients depend on can succeed.
Florida should be a place where caring for your community sustains your business - not a hidden tax that slowly drains it.
Our sole mission is advocating for the financial viability and success of independent pharmacy businesses.
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