A 20-year Ecological Comparison for the Market Dynamics of Minnesota Community Pharmacies from 2002 to 2022
Authors: Schommer Jon C. , Olson Anthony W. , Lee SuHak , Wilson Gavin G. , Jelodari Anita , Gaither Caroline A. , Stratton Timothy P. 
Published: June 2023

Background: Understanding the factors that influence the market entry, exit, and stability of community pharmacies (i.e., market dynamics) is important for stakeholders ranging from patients to health policymakers and small business owners to large corporate institutions. The purpose of this article is to provide an update to a 15-year ecological comparison for the market dynamics of Minnesota community pharmacies from 2002 to 2017 [1]. Objectives: The first objective was to update the 15-year study [1] by describing the market dynamics of community pharmacies for each county in the state of Minnesota every five years over a 20-year period (i.e., 2002-2022). The second objective was to update the 15-year study by describing the number and proportion of community pharmacies for each county in the state of Minnesota every five years over a 20-year period (i.e., 2002-2022) by (1) ‘Business Organization Structure’ and (2) ‘Pharmacy Type.’ The third and fourth objectives were new for the 2022 study. In response to evolutionary trends in the pharmacy market, objective three described the number of Minnesota licensed pharmacies located in-state and out-of-state between 2002 and 2022. Objective four described the primary type of service provided by licensed pharmacies categorized as out-of-state in 2002 and in 2022. Methods: Data were obtained from the Minnesota Board of Pharmacy, US Census Bureau, and Minnesota State Demographic Center for 2002, 2007, 2012, 2017, and 2022. Descriptive statistics were used to tabulate and summarize the findings and test associations between study variables. Results: Over the 20-year study period, the total number of community pharmacies in Minnesota remained steady. Findings for 2022 were similar to those for 2017 regarding the effects of population density and metropolitan designation on the market dynamics of community pharmacies and regarding the organizational structures and types of pharmacies. The findings revealed significant growth in the number of proportion of pharmacies licensed in Minnesota that were located out-of-state. In 2002, there were 283 of these pharmacies (19% of the total). By 2022, this grew to 960 (46% of the total). Over that 20-year period, the number of mail order and medical supply service pharmacies rose from 196 to 413. The number of specialty pharmacy distributors rose from 37 to 230 and the number of compounding pharmacies rose from 33 to 202. Discussion: The findings confirmed the shift over the past 20 years from traditional retail convenience models to healthcare access models based on population health metrics. National scalability was another detected shift in order to have profitable margins for some services and was feasible due to advances in technologies. Conclusion: The findings showed that community pharmacy distribution in Minnesota’s 87 counties shifted between 2002 and 2022 from traditional retail convenience models to healthcare access models based on population health metrics and to nationally scalable models based on economic pressures. This signals the need for not only new approaches for tracking community pharmacy market dynamics but also adjustments by community pharmacies to remain relevant in a new environment of patient care services.