Editor’s Note: This perspective was originally published in Health Affairs Forefront on Dec. 19, 2025.
Pharmacies serve as critical sources of prescription medications and essential health care services in communities, with patients visiting pharmacists almost twice as often as other healthcare providers. In addition to provision of medication services, pharmacies provide valuable access to vaccinations, contraceptives, and harm reduction services like naloxone. However, pharmacy closures are occurring at an alarming rate, leading to the expansion of pharmacy deserts and loss of access to essential healthcare in many United States (US) neighborhoods. Recently, CVS announced closure of 271 stores nationwide and Walgreens plans to close at least 1,200 pharmacy locations across the next three years, with 500 closures planned for 2025 alone.
Pharmacy closures have been linked to declines in patients’ adherence to both cardiovascular and anticonvulsant medications, creating alarm around the impact of closures on patients’ health outcomes. Further, pharmacy closures occur more often in low-income, Black, and Latin communities, putting health equity efforts at risk. Disparities in access to pharmacies created by these closures may perpetuate inequity in access to medications and other public health interventions, deepening health inequities in the United States.
Critical Access Pharmacies
A recent Forefront article highlighted the issue of closures and emphasized the need to improve pharmacy finances through pharmacy benefit manager (PBM) reform and sustainable pharmacy reimbursement models. However, Congress has not passed federal PBM reform legislation to date, and it remains questionable whether state-level legislation will effectively regulate PBMs.
In the face of these challenges, one potential solution to improve or sustain access to community pharmacies is to implement a Critical Access Pharmacy (CAP) designation. Similar to the critical access hospital designation, the CAP designation would provide financial protection to pharmacies serving as necessary points of access to pharmacy care for communities. This policy action would work to prevent pharmacy closures in high-risk communities—including communities of color, rural communities, and low-income communities which are disproportionately pharmacy deserts—to improve equitable access to pharmacy care.
The CAP Landscape
The idea of Critical Access Pharmacies (CAPs) is not new. Both federal legislative proposals and state legislative enactments have included provisions aimed at protecting vulnerable community pharmacies, though some have used different terminology. At the federal level, efforts have focused on safeguarding “essential retail pharmacies.” The Better Mental Health Care, Lower Cost Drugs, and Extenders Act of 2023 would establish a formal definition and reimbursement floors for essential retail pharmacies. Despite unanimous passage in the Senate Finance Committee, there has been no action on this bill since December 2023. Again in 2024, federal legislation attempted to define essential retail pharmacies under the Patients Before Middlemen Act, but this bill is yet to be considered in committee.
Illinois and Oregon successfully implemented critical access pharmacy programs in 2019 and 2023, respectively. States’ legislative leadership in this area, as well as the ability to tailor CAP designations to states’ needs, make state-level CAP designation an attractive option.
Suggestions For Critical Access Pharmacy Designations
Ultimately, CAP designations represent an opportunity for states to meaningfully protect patients’ access to pharmacies and, potentially, to improve the quality of care that these pharmacies provide. To achieve this, the authors offer six suggestions around the designation of CAPs at the state level.
CAP Designations Should Not Depend On Rurality Or Medically Underserved Area Status
The criterion of pharmacy location within a medically underserved area (MUA) is used in Illinois’ CAP designation eligibility and was proposed as part of the Patients Before Middlemen Act essential retail pharmacies definition. However, just over one third of pharmacy deserts have been found to exist in MUAs. Because MUA status does not necessarily coincide with pharmacy desert or shortage status, this criterion alone is not a suitable metric to identify pharmacies at risk of closure or those that may serve as critical points of access to healthcare.
Additionally, both Oregon and Illinois designations of CAP rely on pharmacies’ rurality. However, over half of all pharmacy deserts are located in urban areas, so the limitation of CAP designation to rural spaces may omit many high-need areas from designation eligibility. It is critical that CAP definitions allow designation regardless of rurality status.
However, this does not mean that CAP definitions should be rurality- or MUA-agnostic. As discussed more fully below, we recommend using designation criteria which vary based on either (a) population or pharmacy density (e.g., fewer than 2 pharmacy locations per 10,000 people in county, zip code) or (b) distance to the next-nearest pharmacy (e.g., no pharmacy located within 1-mile), and that separate criteria be used when identifying pharmacies located in urban, suburban, or rural areas (e.g., distance to next nearest pharmacy may increase to 5-miles in rural areas). Given limitations with rurality definitions, a more nuanced conversation may be warranted.
CAP Designations Should Require Pharmacies To Provide A Minimum Level Of Services To Patients When Feasible
Financial incentives for engagement in public health-related services may improve access to, or quality of, care in the high-need communities that CAPs serve. These services may include vaccinations, extended operating hours, adoption of harm reduction initiatives, pharmacist prescribing where permitted by state law, and minimum inventory levels for certain medications such as naloxone, emergency contraception, and epinephrine auto-injectors. Oregon’s definition of CAP, for example, requires that CAPs offer immunizations and either pharmacist protocol-based prescribing or medication therapy management.
It should be noted, however, that some pharmacies may not have the resources to engage in all types of pharmacy services. For these pharmacies, we recommend that states implement additional CAP program flexibilities. These could potentially include a tiered financial incentive scale, wherein CAPs providing greater numbers of these services receive enhanced financial incentives. Alternatively, leniency on the minimum services requirement could be built into legislative provisions or granted to pharmacies on a case-by-case basis. While CAP designations should ideally be used to improve access to services, a pharmacy operating in a high-need area with limited services is better than no pharmacy at all.
CAP Designations Should Favor Independent Or Regional Chain Pharmacies, With Exceptions
The majority of pharmacies in the United States are chain pharmacies. Promoting independent pharmacy ownership by protecting independent pharmacies may protect communities against pharmacy losses and creation of pharmacy deserts resulting from mass chain pharmacy closures resulting from top-down financial pressures. This type of protection was built into Oregon’s CAP designation, which required that CAPs be owned by Oregon residents. We favor flexibility in this rule depending on pharmacy density or availability. For example, under Oregon’s CAP designation, all frontier or rural county pharmacies—regardless of Oregon-based ownership—were considered CAPs if the county had fewer than four pharmacies.
Ideally, CAP Financial Incentives Should Apply To All Claims Submitted By A Pharmacy
In Illinois, CAP payments are dispensed quarterly based on a standard reimbursement rate for CAP claims under HealthChoice Illinois, a statewide Medicaid managed care program. In Oregon, CAPs receive preferred reimbursement rates for those claims filed under the state’s Oregon Prescription Drug Program, a state-sponsored drug discount program open to all Oregon residents.
However, instead of being limited to claims adjudicated under a certain program or health insurer, all prescription or service claims submitted by a CAP should ideally be eligible for any CAP financial incentives to ensure that the incentives are equitable and not limited to a specific type of patient-program or patient-payor mix. This is important, as individuals living in low-income areas with high risk of pharmacy closures may rely on diverse means—including government-sponsored programs, patient assistance programs, or prescription discount cards—to afford pharmacy care.
However, while payor- or program-agnostic financial incentives are an ideal, this may not be feasible, especially when CAP programs are first implemented. As mentioned, Medicaid programs have been used as foundations of CAP programs in the past and may be the most straightforward avenue for implementing CAP protections immediately.
CAP Designations Should Be Tailored To State Population And Pharmacy Infrastructure
States may consider certain income, population, or area-based recommendations depending on state need. One example of this is Oregon’s CAP designation. In Oregon, all pharmacies serving Native American reservations are eligible for CAP status, regardless of other CAP criteria being met. Additionally, Oregon legislation creates thresholds for distance to next nearest pharmacy to achieve CAP status based on zip code urbanicity (as determined by population density), and incorporates income-based requirements for census tracts where pharmacies are located to determine eligibility. We recommend that states seeking CAP designation implement flexible criteria that best suit the needs of their own populations.
CAP Designations And Performance Should Be Rigorously Tracked
Monitoring and evaluation plans are vital to understanding the success of any public health or legislative policy intervention, and they will help identify any key gaps in CAP designation. At the state level, this may be most easily done by Boards of Pharmacies, perhaps in partnership with State Departments of Health. Together, these entities already have much of the information that could be used to identify CAP eligibility, including pharmacy location, ownership information, prescribing agreements, and some population-level information.
At a minimum, an evaluation plan should be created to describe qualification criteria met by CAP pharmacies, to quantify financial incentives received by pharmacies at an individual level and in aggregate, to describe the population that the CAP serves, and to track CAP closures across time. These data will help identify who is, or isn’t, benefitting from CAP status, and will potentially lead to further refinements in CAP criteria to improve patients’ access to pharmacies.
Challenges And Limitations Of Critical Access Pharmacy Programs
The most immediate challenge for CAP designations is funding and financial viability. Allocation of funding for CAP programs may occur through legislative action or federal or state-funded initiatives, although legislative action would likely create more long-term stability for these programs. For CAP programs funded by external dollars, planning for long-term sustainability is paramount. Grantees may consider using awarded dollars to fund a pilot CAP program, after which data is presented to the state for consideration of legislative action. Financial incentives that do not require direct financial investment, such as a special tax status for CAPs, may be considered. Additional staff and resources for data collection and management, which also require financial investment, will likely be required for long-term success of a CAP.
Second, state-level CAP designation relies on states to take action. It is likely that some states—due to resource availability, partisanship, or both—may never see CAP programs to fruition. This is also is especially relevant as pharmacy shortage and pharmacy desert areas disproportionately impact historically marginalized populations. Thus, it may be that states with highest need of these provisions could be the least likely to carry them out. For example, Mississippi is a low-income state and has a long-standing history of health inequity, the worst healthcare system performance in the nation, and a notable lack of implementation of health policies which may enhance affordability or access to healthcare, such as Medicaid expansion. From 2010 to 2023, Mississippi also had the highest rate of pharmacy closures in the nation and experienced a net loss of pharmacies across this time. Mississippi’s case is reflective of a broader pattern in which lower-income states, which may disproportionately benefit from policy interventions, fail to enact them. To this point, federally implemented programs may hold promise of greater reach through national application of CAP designations. However, due to Congress’s repeated failure to take action to protect pharmacies, federal recognition and protection of CAPs seems unlikely.
Finally, critical access pharmacy designation alone will do little to address the recent acceleration of pharmacy closures nationwide. While there are no doubt multiple factors behind these closures, PBMs’ anticompetitive business practices are a commonly cited cause. PBM business practices, specifically patient steering or low prescription reimbursement, may harm community pharmacies’ financial health, leading to closures.
Like previous authors, we urge reform around PBM patient steering practices and low reimbursement rates, which affect the volume of business and magnitude of reimbursement for non PBM-integrated pharmacies, respectively. We advocate for legislation which prevents discrimination against non PBM-affiliated pharmacies, either through low reimbursement rates or restrictive contract terms; we call for national prescription reimbursement floors, based on medications’ national average drug acquisition cost (NADAC) or wholesale acquisition cost (WAC). Effective PBM reform is crucial to addressing underlying causes of pharmacy closures in the US.
Taking Action
As community pharmacies close and gaps in access widen, states can enact critical access pharmacy designations to not only protect community pharmacies from closure, but also to enhance access to community pharmacy services in high-need areas. We have laid out key recommendations for state-level CAP designations, and have outlined financial considerations regarding, and limitations of, these designations. Until the root cause of pharmacy closures are addressed, championing critical access pharmacy designations may be the best way to protect patients’ access to vital pharmacy care.
Emily Gravlee et al., “Critical Access Pharmacy Designations Could Strengthen Access”, Health Affairs Forefront, December 19, 2025, https://www.healthaffairs.org/content/forefront/critical-access-pharmacy-designations-could-strengthen-access-pharmacies
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