Prescription Pain: Pharmacy Closures as Persistent, Local Buprenorphine Supply Shocks

• In Event: Increasing Access to Medications for Opioid Use Disorder

Abstract

Background. Nearly one in three U.S. retail pharmacies closed between 2010 and 2021, with independent pharmacies disappearing at nearly twice the rate of chains. Buprenorphine—the evidence-based, first-line medication for opioid use disorder (OUD)—is dispensed through retail pharmacies, making local pharmacy access a direct constraint on treatment. Two decades of federal policy have focused on the prescriber side of the buprenorphine supply chain, while the pharmacy dispensing channel has received almost no policy attention. As the federal government's role in health policy shrinks, state decisions about pharmacy reimbursement, PBM regulation, and network adequacy become the primary levers for OUD treatment access—making causal estimates of closure effects both timely and consequential.

Research Question. When a pharmacy closes, do neighboring pharmacies absorb displaced buprenorphine supply, or is local treatment capacity permanently lost? For which closure types does the market fail to self-correct?

Methods. I use federal drug distribution records that log every buprenorphine shipment from distributors to pharmacies to identify 526 pharmacy closures across Connecticut, Massachusetts, New Jersey, and Rhode Island (2007-2017). For each closure, I measure total local buprenorphine supply within 2.5 miles, comparing trends before and after closure to a matched comparison area 3.5-6 miles away using a stacked event-study design with spatial fixed effects. A key restriction ensures comparison areas are not themselves affected by concurrent nearby closures. The four study states are the most densely populated in the country and among the hardest hit by pharmacy losses; their pharmacy-dense markets make these estimates a plausible lower bound on effects in thinner rural and Southern markets where alternatives are scarcer.

Results. The market does not compensate. Local buprenorphine supply falls 19 percent on average after a closure, with neighboring pharmacies absorbing fewer than half of displaced volume—equivalent to roughly 29 patient-treatment-months per closure per month, or approximately 183,000 across the study period. Independent pharmacy closures drive the entire effect (33 percent decline), while chain closures show no significant reduction. The explanation is market structure: chains close in dense, competitive markets where nearby alternatives absorb displaced patients; independents close as the dominant local source in thinner markets where no substitute exists. The volume of the closing pharmacy does not predict whether supply recovers—the local competitive landscape does.

Implications. These findings provide the first causal evidence that pharmacy closures reduce the local supply of a controlled substance critical to addiction treatment—establishing the dispensing channel, not just the prescribing channel, as a binding constraint on buprenorphine access. Expanding prescribing is insufficient if pharmacy infrastructure is simultaneously contracting. Because the policy levers that govern pharmacy viability—Medicaid reimbursement adequacy, pharmacy benefit manager regulation, network adequacy requirements—are set at the state level, cross-state variation in these tools is now decisive for whether buprenorphine treatment capacity expands or erodes. The results point to a concrete targeting principle for state policymakers: interventions directed at independent pharmacies in lower-density markets will produce the largest gains in OUD treatment access.

Author

• Nicholas Hall, RTI International
  Presenting Author