US pharmacy workers are trying to form their first labour union, complaining they are under undue pressure to lift sales from drugstore chains struggling with falling vaccine demand after the Covid-19 pandemic.
Pharmacy workers last week staged a three-day walkout — which they dubbed “Pharmageddon” — and have now announced a partnership with IAM Healthcare, a union for healthcare professionals.
Pharmacists are the last line of defence in patients’ health but are being increasingly graded by corporate sales metrics, said Lannie Duong, a clinical pharmacist based in California who is expected to be on the new union’s steering committee.
“We are treated like we’re working at McDonald’s,” she said.
Within hours of the launch, its website crashed as more than 30,000 pharmacists and technicians signed up to declare their interest in joining a union, said Shane Jerominski, an independent pharmacist who is one of the leaders of the unionisation push.
“It’s not a shortage of pharmacists, it’s a shortage of pharmacists and technicians willing to work in an environment where you run the risk of a medical error,” Jerominski said.
The proposed Pharmacy Guild will demand legislative and regulatory change to protect patients, he said. But the partnership with IAM Healthcare is a first step in the difficult, years-long process of forming a union in the US. Union organisers at companies including Starbucks and Amazon have so far struggled to secure new contracts.
Both CVS and Walgreens said patient safety was their highest priority, adding that they were committed to working with pharmacists to address their concerns.
“We never ask our pharmacists to work beyond what they believe is safe,” Walgreens said.
CVS and Walgreens said last week’s walkout had little to no effect on their stores.
The labour unrest comes as pharmacy chains are suffering from a range of problems including waning demand for vaccines. Rite Aid filed for bankruptcy last month, while Walgreens and CVS have both announced store closures to cut costs.
CVS is shutting 900 stores by 2024. Walgreens Boots Alliance announced a $1bn cost-cutting plan last month as a new chief executive stepped in following the departure of former boss Rosalind Brewer.
Walgreens slashed its full-year earnings outlook at its latest results, citing “significantly lower” Covid vaccine and testing volumes. Similarly, third-quarter earnings at CVS were dragged down by a “Covid softening”.
Drugstore chains are also facing rising competition from Amazon and growing losses from shoplifting, some of it caused by organised crime gangs. Losses to theft grew by 20 per cent to $112bn last year, according to the National Retail Federation.
Shares in CVS have dropped by one-third and Walgreens’ more than halved since the start of 2022. In response, drug stores have shifted their focus to higher-margin products such as vaccines, which Duong said were being administered by fewer employees, who were graded on speed, quotas and upsells.
CVS is rewarding staff with a $750 bonus if their store outperforms target inoculation levels by 10 per cent, while Walgreens is offering certified technicians up to $3 per extra vaccine they upsell, as well as implementing “immunisation bingo” games and action plans to push vaccine sales, according to internal flyers shared with the Financial Times.
During the third-quarter earnings call, CVS chief executive, Karen Lynch cited “higher contributions from seasonal immunisation” to adjusted operating income.
CVS said the bonus incentive programme helps serve patients’ health. Walgreens declined to comment.
Pressure to administer more vaccines is so intense that some pharmacists book fake appointments just to catch up on filling and checking prescription bottles, an essential part of a their job, said Maurice Shaw, a former Walgreens pharmacist and one of the organisers of the Pharmacy Guild.
Even before the pandemic, studies showed that more than 90 per cent of pharmacists working in retail drug stores were saying their workload was “high” or “excessively high”.
Since then, pharmacists and technicians have been asked to do much more with inconsistent hours and pay, said Michael Hogue, chief executive of the American Pharmacists Association.
The median hourly wage for pharmacists last year was $63.82, up 3.6 per cent from 2019, while pharmacy technicians made $18.17 an hour, up 11.3 per cent from 2019, according to the Bureau of Labor Statistics.
Some big chains including Walgreens, CVS and Walmart have offered sign-on bonuses ranging from $30,000 to $75,000, but even this has not helped fill job openings, said Shaw.
The bonuses typically come with a requirement for workers to stay at the same store for two years or pay them back. “That’s why not many want to take it,” Shaw said.
Walgreens said: “We have offered sign-on bonuses for pharmacists, which varied, and have been part of larger investments focused on recruitment and retention.” CVS said: “We offer highly competitive compensation packages that may include sign-on bonuses.”
Through the third quarter of 2023, there were nearly 32,000 job openings for retail pharmacists, almost double the number in the same period in 2019. There were almost 112,000 openings for pharmacy technicians, about 30 per cent more than in 2019, according to the Pharmacy Workforce Center, which compiles pharmacy employment data.
George Hill, healthcare services analyst at Deutsche Bank, said the US had too many undifferentiated drug stores. He added that profitability was also undermined by competition for business by powerful pharmacy benefit managers, which negotiate prices.
“That ripple goes right downstream to the pharmacists,” Hill said.
At the same time, attractive parts of drugstores’ business, such as specialist drugs like Humira for rheumatoid arthritis and high-cost therapies for oncology, are increasingly moving away from pharmacies to mail order and hospital settings, Hill noted.
“We can probably lose Rite Aid and Walgreens or CVS and still be OK,” he said.
Additional reporting by Taylor Nicole Rogers
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