Walgreens closures leave entire SF neighborhoods without a pharmacy

More than 65,000 San Franciscans are about to lose their neighborhoods’ only pharmacy. 

When Walgreens closes a dozen stores in February, the Bayview Hunters Point and Ingleside communities will each be stripped of their last remaining pharmacy.

“It’s so unfair, it’s disgusting,” said Annette Scott, who lives in the Bayview. Chronic pulmonary disease and asthma limit the 63-year-old’s mobility, making it important for her to have a pharmacy near her home. When Walgreens closes, Scott will be forced to travel for her daily medication.

The Walgreens closures are only the latest: By March, San Francisco will have lost nearly 40% of its licensed pharmacies over a decade, going from 167 in 2015 to 104.

The 12 branches closing in San Francisco will cut the number of Walgreens stores in the city by about a quarter. The pharmacy chain in October announced plans to close 1,200 stores nationwide.

Across the U.S., independent pharmacies are getting muscled out by chains and excluded from insurance networks. Meanwhile, chains are shuttering locations amid massive opioid settlements. Local pharmacists say they are also losing money on prescriptions they fill due to inadequate insurance reimbursements doled out by pharmacy benefit managers, the “middlemen” of the healthcare industry. While brazen shoplifting has been raised as another factor putting pressure on pharmacies, Walgreens executives walked back their emphasis on theft prevention and acknowledged that locking up products has harmed sales. 

Seniors, disabled people, and those with chronic conditions suffer most acutely from pharmacies closing, experts say. But the effects can be felt by the entire community, as more people may land in the hospital, potentially driving up insurance rates for everyone, according to Susan Bonilla, CEO of the California Pharmacists Association. Plus, fewer pharmacies likely mean longer lines at those that remain, exacerbating what in San Francisco can already be a miserable experience.

Clutching a bag of blood pressure medication, Andre Phillips, 78, said the closure of the Bayview Walgreens will make life difficult, as the next-closest pharmacy, on San Bruno Avenue, is a smaller store with less parking.

“There’s a lot of people, including a lot of elderly, who depend on this store,” Phillips said.

Bayview Senior Centers’ executive director Cathy Davis said elderly residents at their facilities, including the Dr. George W. Davis Senior Center near Third Street’s Walgreens, depend on physical pharmacies for medications as they don’t order drugs online.

“Our seniors are really upset about the closing of Walgreens,” Davis said in an email. “It’s a true loss for them.”

Dima Qato, an associate professor at the University of Southern California’s Alfred E. Mann School of Pharmacy, said when a community’s only pharmacy closes, there’s an increased likelihood that people stop taking their medications regularly. Nationwide, closures have disproportionately affected neighborhoods with large populations of people of color, such as the Bayview, and those with low average incomes.

“We’re going to see worsening health disparities,” Qato said of the closures. “Poorer health outcomes, whether it’s cardiovascular, diabetes, or respiratory conditions in older adults or in children.”

According to Qato, medication-by-mail services are not a sufficient replacement as they don’t provide the benefits of neighborhood pharmacies, such as giving vaccines, testing for health conditions, and filling prescriptions immediately. Her research has found that 1 in 4 U.S.  neighborhoods has a pharmacy shortage.

Bayview residents who spoke with The Standard called on the city to pressure Walgreens to keep the neighborhood’s last remaining pharmacy open. Supervisor Shamann Walton, who represents the Bayview, said in a statement that he is disappointed about the closure, but a Walgreens representative informed his office that the decision was final.

“The city cannot control the decisions of corporate actors like Walgreens,” said Board of Supervisors President Rafael Mandelman. “But we do need to figure out how to meet the needs of these communities that will be underserved.”

When asked what plans the Department of Public Health has to address declining access in San Francisco, a spokesperson said the priority is to ensure the smooth transition of customers to a new pharmacy.

The mayor’s office did not share a broader plan to improve pharmacy access beyond emphasizing that attracting businesses to San Francisco is a top priority.

“Our administration is working every day to help businesses thrive in our city and ensure every community has access to important health resources,” a mayoral spokesperson said.

In a Jan. 8 statement, Walgreens blamed the closures on rising operating costs, including “increased regulatory and reimbursement pressures.”

“We know that our stores are important to the communities that we serve, and therefore do everything possible to improve the store performance,” the statement said. “When closures are necessary, like those here in San Francisco, we will work in partnership with community stakeholders to minimize customer disruptions.” 

Pharmacies buy drugs from wholesalers but depend on pharmacy benefit managers, or PBMs, which processed nearly 80% of U.S. prescriptions in 2023, to reimburse them. 

But they frequently don’t reimburse pharmacies for the full cost of the drugs, leaving pharmacies on the hook to pay the difference, according to Bonilla, who described them as “middlemen.” This can be particularly damaging to pharmacies in the case of expensive drugs. And when pharmacies lose money on each prescription they write, closures are inevitable, she said.

Some PBMs operate their own pharmacies. Caremark Rx owns CVS pharmacies, and Express Scripts Inc. and OptumRx Inc. mail prescription drugs directly to patients. (Walgreens is not owned by a PBM.)

A recent report from the Federal Trade Commission found that those three companies, the largest U.S. PBMs, marked up many specialty generic drugs dispensed at their affiliated pharmacies by thousands of percent. The three companies together generated more than $7.3 billion in revenue from the price increases between 2017 and 2022, as patients’ drug costs climbed higher. 

The companies also consistently paid their own pharmacies higher drug reimbursement rates than what they gave independent pharmacies. For example, in 2021 reimbursements for the cancer drug Imatinib, PBMs reimbursed their owned pharmacies an average of $4,433, versus $2,195 for pharmacies they didn’t own, according to the report.

In September, Gov. Gavin Newsom vetoed a bill that would have regulated these middlemen companies in California. 

State Sen. Scott Wiener, who introduced the legislation, said losing local pharmacies hurts healthcare access, noting that they are a key way for people to get vaccines and birth control. He blamed PBMs and retail theft for hurting pharmacies and said the key to preventing closures is to better regulate the middlemen. 

“We know PBMs are crushing pharmacies, forcing people to use mail-order prescriptions and other practices around reimbursements,” said Wiener, who is taking another shot at regulating the industry with a new bill, SB 41.  “I want to crack down on abusive practices against pharmacies and patients.”

Tony Bastian, owner of Joe’s Pharmacy in the Richmond, said the squeeze from PBMs has been killing off independent pharmacies.

“It’s hard to stay in business because reimbursements are low,” he said. “I’m lucky if they reimburse me at cost. You can’t survive that way.”

Bastian said San Francisco can’t afford to lose neighborhood pharmacies like his, which offer a more personal experience and engender trust. 

“I take time to learn from patients, what’s wrong with them, work with them, their physicians,” he said. “That’s missing from chain pharmacies.”

Qato, the pharmacy researcher, said independent shops are often committed to staying in the neighborhood, even if they aren’t raking in profits. Chains, on the other hand, are much more likely to pull a low-earning store out of a community.

When the Walgreens at 1630 Ocean Ave. in Ingleside closes, it will be a serious blow to southern San Francisco, which has long suffered from a lack of pharmacies.

“We’ve lost the [Evans Street] Walgreens and the Rite Aid, so this is all that’s left,” said Sylvia Thorne, owner of Glitz Hair Salon.

Joe Moore, 71, criticized Walgreens for the decision to close the Ingleside location, saying the chain is prioritizing profits over the needs of seniors.

“They don’t give a shit about us,” Moore said. “We’re dollar signs to them.” 

Ruth Linden, owner of the patient organization Tree of Life Health Advocates, spends her days finding cheaper prescriptions for her clients. She said those facing a Walgreens closure in their neighborhood do have options, like Cost Plus, GoodRx, and Costco, as well as Canadian pharmacies that will mail medications.

But Ingleside residents are set to lose more than just a convenient spot to pick up medication. 

“Everything is going to be mail-order now, which they’ve been pushing on us anyway, so we all stay in our homes,” one customer said while standing in line this month at the Ocean Avenue Walgreens. “We’ll never see each other.”

Emily Dreyfuss contributed reporting.