Fruth Pharmacy, a pharmacy chain with locations in Ohio, West Virginia and Kentucky, is officially closing all stores and transferring its prescriptions to Walgreens. The pharmacy was in business for nearly 75 years, and at its height owned 30 locations.
Lynne Fruth, president of Fruth Pharmacy, said the businesses' struggles began about 12 years ago, with the increased role and impact of Pharmacy Benefit Managers.
According to the American Medical Association, PBMs act as mediators between insurers, employers and drug manufacturers, setting prices and rebates.
“Every year the PBMs came back and said, ‘Well, we paid you this last year, but now we're going to pay you worse this year,’ and there was no negotiation,” Fruth said. “It was take it or leave it, because you got to a point where you had an oligopoly, where you had three PBMs that controlled about 80% of the market, and that would be Express Scripts ESI, Optum, which is part of UnitedHealth, and then Caremark, CVS.”
According to Fruth, a state study found the average cost to dispense a prescription is between $12-$15, meaning the pharmacy lost $10-$14 every time it dispensed the prescription to Ohio Medicaid at $1 above the cost of the drug.
Fruth said those PBM drug pricing lost the company money and contributed to the company's closure.
“I paid $25 for that drug, I got paid $26,” Fruth said. “That did not cover the cost of a pharmacist who works for $60 an hour, or a tech. It didn't cover the file, the label, the processing and all of that … But what are you going to do? You're going to tell Mrs. Smith, who lives in your community, ‘I can't fill this, because we're going to lose money.’ No, you fill it, because pharmacists do the right thing.”
Fruth’s closure has raised concern in the Central Appalachian region, where its pharmacies were located. A growing concern in the region is pharmacy deserts, classified as a 10-mile area with no retail pharmacies.
In Athens County, there are 324 census blocks considered a pharmacy desert.
Timothy Pawlik is the chair of the Department of Surgery at The Ohio State University Wexner Medical Center. Pawlik helped conduct a study to analyze the prevalence of pharmacy deserts across the country.
Pawlik said pharmacy deserts were a very topical issue and described the ways they conducted the study.
“We got data from the pharmacy licensing data from the Ohio Board of Pharmacy, and we evaluated specific census tract level pharmacy closures and pharmacy deserts specifically in Ohio,” Pawlik said. “And we not only looked at closures of pharmacies, but we want to look at it in particular relative to the Ohio Opportunity Index, which is an index that reflects populations at risk, maybe vulnerable populations.”
The study, published on Ohio State Health and Discovery and conducted by Pawlik, outlines non-clinical determinants of health outcomes, including transportation availability, housing stability, education availability, income level and more.
There are 139 pharmacy deserts in the state of Ohio, according to the study’s findings. Fruth commented on how the loss of Fruth Pharmacies has impacted and will continue to impact Southeast Ohio residents.
“You have a vulnerable population, you have a poor population … people in this community measure things by the cost of a tank of gas,“ Fruth said. "‘I can't afford to go there. I don't have enough gas.’ And for most people, that's a foreign concept, but that's how it is in Appalachia, so these closures were devastating.”
Pawlik discussed how policymakers can best tackle the pharmacy desert issue by addressing social issues in addition to medical ones.
“There needs to be a broader concept of not only access to medical care, but access to services that will address these health-related social needs, like transportation programs, vouchers, shuttles, improving food security through SNAP or food banks, ensuring housing security through more affordable housing,” Pawlik said.
Fruth Pharmacy’s closure is not a unique experience. According to the Ohio Board of Pharmacy, 215 retail pharmacies closed across the state in 2024.
“We have seen thousands and thousands of pharmacies close, including the total collapse of Rite Aid,” Fruth said. “Walgreens was purchased by private equity … and so if you didn't have your own PBM to determine what you would get paid and steer people to you, then you were just at the mercy of the PBMs and insurance companies.”
To mitigate the pharmacy crisis, Pawlik recommends increasing online access for people in rural areas to order medications online. He also discussed mobile pharmacies, which could visit rural areas twice a week to offer services to those who might not be able to travel far.
