This story aired in the July 24, 2025 episode of Crosscurrents.
You may have noticed that it’s easier to find a shuttered drug store than an open one lately.
And it’s not just you… SF Gate reported last month that Walgreens and CVS have both shut nearly half of their San Francisco locations since 2021.
And even more drastically, Rite Aid recently said it will likely close all of its California locations following a second bankruptcy filing.
These closures are part of a larger trend of retail pharmacies shuttering their doors around the Bay Area and the country.
Some people are blaming these closures on an increase in theft… but KALW health reporter Alaa Mostafa learned the trend is complicated and there are even bigger forces at play. In this story she spoke with area residents just outside an East Bay Walgreens a few days before it closed earlier this year.
Click the link above to listen.
Story Transcript:
REPORTER: Steven Summers has lived in this neighborhood for the past 16 years.
STEVEN SUMMERS: [I’ll] be anxious to see what goes in here if anything.
REPORTER: We’re standing in the parking lot on the corner of E. 18th and 3rd Ave. Summers is wearing a hat with two black-crowned night herons on it. He tells me it’s Oakland’s official bird. Summers used to work at the Lake Merritt bird sanctuary until he retired.
This Walgreens is where he used to pick up prescriptions, and the occasional birthday card, or cat food.
Now, he says, he’ll have to go to the next closest one on Lakeshore Ave. He says it won’t be too much of an issue for him, and that he gets why this Walgreens closed.
SUMMERS: You know, it had shoplifting problems. I've been here right after their pharmacy has been attacked a couple of times, and tried to be robbed, been here when the glass doors to the front have been boarded up because they’ve been smashed in. So that's definitely a factor. And, you know, everything inside is locked up, which makes shopping a pain in the ass.
REPORTER: And it wasn’t just Summers. I spoke with several other neighborhood residents who brought up theft too.
In 2024, according to the city’s crime data, this Walgreens had over 40 theft-related incidents. That number is much higher than previous years.
But stealing is actually not the main reason why the store closed. When I reached out to Walgreens, a representative said it was more so because of “reimbursement pressures,” including the practices of middlemen known as pharmacy benefit managers or PBMs.
What the heck are those?
GEOFFREY JOYCE: So they decide what drugs are on your list of covered drugs, and what your cost-sharing is, and what your premium [is].
REPORTER: Dr. Geoffrey Joyce is the director of health policy at the USC Schaeffer Center for Health Policy and Economics. He’s a health economist who studies pharmacies and drug prices.
He says that pharmacy benefit managers are sort of like brokers. They’re the ones that negotiate prices ahead of time between the drug manufacturers, pharmacies, and insurance companies.
They’re hired by insurance companies and large employers to help them get the biggest discounts possible from drug manufacturers.
And because PBMs contract with different insurance companies and employers, they come to represent millions of patients. All of those potential customers for the manufacturer's drug give the PBMs leverage at the negotiating table.
JOYCE: In some ways, they are aggregating and they're lowering prices, and that's pro-consumer. The criticism of PBMs has been: they retain some of that savings – perhaps too much.
REPORTER: The thing is…
JOYCE: Nobody knows what the other person's getting paid or how much it costs. And that's where the PBMs make too much money, because there's a lack of transparency in what everybody throughout the system is paying.
REPORTER: Imagine you have a roommate. And you pay your rent to that roommate. And she passes it along to the landlord, along with her portion or whatever. But you don’t know how much she pays for her room. And you don’t know how much your total rent is. So, she could totally be overcharging you.
And that lack of transparency could be happening with PBMs too. So much so that the Federal Trade Commission – the government entity that works to prevent unfair business practices – has initiated a process to look into the practices of some of the country’s largest PBMs right now, for allegedly inflating the price of insulin. And Governor Gavin Newsom said this spring he would be looking into increasing oversight of PBMs.
In the meantime, PBMs have also cornered the market when it comes to brand-name drugs. Stores like CVS, which are part of a PBM, may be able to sell brand-name drugs at a price that Walgreens, which isn’t part of a PBM, can’t match. That means customers go elsewhere to buy those drugs.
And then, there’s online sales…
JOYCE: Walgreens used to make money off drugs, and then while in the store, the markups on their non-drugs were quite high, right? You overpaid for your diapers and your deodorant. And Walmart and others have come in and Amazon and really reduced sales of non-drugs. And that's hurt [Walgreens].
REPORTER: Meanwhile, pharmacies’ costs like rent, electricity – and yes, theft too – have gone up in metropolitan areas. And Joyce says, pharmacy chains have overexpanded over time. There are simply too many pharmacies around, especially in cities right now, for all of them to turn a profit.
So there are all these economic reasons why several Walgreens pharmacies are closing across the east bay. And yet, remember how theft was one of the first things customers like Steven Summers mentioned when I asked about the east Lake Walgreens closure? Why is it so much easier to think of that?
JENNY GUADAMUZ: I think that's just a racial dog whistle…
REPORTER: That's Dr. Jenny Guadamuz. She's an assistant professor of health policy and management at the UC Berkeley School of Public Health. Her research focuses on where and why pharmacies close.
GUADAMUZ: I'm not saying that thefts never occur. I find it really concerning that that is the focus, because these are healthcare spaces. So, if you are blaming the theft of a small toiletry for closing an operation that is giving essential medicines and essential healthcare services, you've kind of lost your way in terms of being a “healthcare service provider.” I just find it to be blaming the communities without actual evidence that is happening.
REPORTER: A few years ago, Walgreens blamed the closure of several of its San Francisco stores on organized theft. But they had to walk that back when an analysis of city crime data by the San Francisco Chronicle showed the numbers did not actually back up the company’s claims.
For this latest round of closures in Oakland, the company didn’t cite theft as a reason. Instead, a company spokesperson told me via email that “reimbursement pressures” – including the practices of pharmacy benefit managers – were more to blame.
But pharmacy benefit managers are very hard to explain, and even harder to picture. A locked theft-prevention cabinet? Much easier to understand.
But whatever the reasons for these Walgreens closing, the impacts on people who need them nearby is real. I talked to another Oakland resident with a mobility issue who said that going to the Walgreens on Lakeshore won’t work for her. They don’t have a drive-thru window the way the old location used to, and parking there is hard.
Dr. Guadamuz says pharmacies are more likely to close in low-income neighborhoods where there are disproportionately high rates of publicly insured and uninsured people. And there’s more likely to be multiple closures, with patients getting shuffled every time a store boards up its doors.
GUADAMUZ: How many people are experiencing this? I’m just not sure. And what does that mean for their health, if they consistently have to figure out what they’re gonna do next?
REPORTER: With this latest closure, Oakland now has three Walgreens locations left – down from seven this time last year.
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Note: You can find more information about PBMs by visiting this WBUR On Point episode and this article from CalMatters’ Kristen Hwang and Alexei Koseff.
Special thanks to Susie Neilson of the San Francisco Chronicle for help with data for this story and to Jennifer Kincaid.
