US Pharmacies: In Decline or Merely in Flux?

The offline pharmacies channel in the US has been shrinking for several years. Following decades of consolidation, the few leading players remain under stress. Rite Aid declared bankruptcy again in May 2025, seven months after the chain emerged from its first bankruptcy as a privately-held company. Walgreens announced in late 2024 its plan to close 1,200 stores over the next three years, five hundred of the closures slated for 2025. CVS is currently the most strongly positioned of the three due to its vertical integration; it owns Aetna, a leading health insurer, and Caremark, a pharmacy benefits manager. Still, it too will close 270 stores in 2025.

This has resulted in considerable decline in physical shelf space allocated to OTC remedies and mass beauty and personal care brands. E-commerce is absorbing the loss but, for legacy brands, growth in online has strengthened the competition by allowing newer, sometimes niche, brands, aligned with the latest ingredient trends, to surface. In 2024, e-commerce accounted for 13.7% of the US OTC market, up from 12.8% in 2023.

Amazon and Walmart dwarf the leading US pharmacies in OTC e-commerce

Amazon solidly leads e-commerce distribution of OTC in the US. Following its 2018 acquisition of online pharmacy provider, PillPack, it acquired One Medical in 2023, giving it a network of 200+ brick-and-mortar clinics with 815,000 members and a telehealth platform. The move signalled Amazon’s ambition to vertically integrate all aspects of the consumer healthcare experience, from diagnosis to prescription (or OTC remedy) delivery.

Amazon’s status as a vast online marketplace benefits OTC legacy brands, as consumers search for name brands on the online storefront. By contrast, it can be harder for newer or more niche brands to stand out. To address this issue, in 2025 Amazon began experimenting with a health AI assistant intended to answer health and wellness-related questions. The chatbot leads the consumer through a series of questions about health symptoms, then directs them to specific products sold on its marketplace or to one of its medical service providers. Growth in s-commerce platforms has also allowed ingredient trends and newer brands to surface, enhancing visibility within crowded first- and third-party marketplaces.

For newer brands transitioning from DTC, hypermarkets’ omnichannel distribution is also important. Hypermarkets leader Walmart operates its own in-house pharmacies. Walmart, like Amazon, has leaned strongly into its digital pharmacy operations. In May 2025, it opened a prescription processing facility in Maryland, targeting expediting delivery times. In late 2024, the retailer announced that, in certain states, prescription medication and general merchandise could be bundled into one order for delivery.

Offline still an important channel for OTC and pharmacies

E-commerce continues to grow but, for brands looking to enter the US, offline remains the dominant channel for sales of OTC remedies.

Offline accounted for 86% of OTC consumer spending in 2024

Source: Euromonitor International

This is important because what a retailer like Amazon does not have at present is a strong brick-and-mortar retail presence. Its One Medical clinic and grocery outlets number combined is a fraction of CVS and Walgreens’ outlet count, even with their store closures.

In sum, while it is not currently a rosy picture for brick-and-mortar pharmacies, offline pharmacies are not going away. Given the relatively high cost of healthcare in the US, pharmacies have emerged again as a critical component of a newly imagined healthcare infrastructure, with prevention at its core. For the moment, this is challenged by the labyrinthine structure of health insurers and the controversial role of pharmacy benefit managers in negotiating prescription drug reimbursement. A more streamlined and lower square footage version of the US pharmacies channel is due, with retail limited to a selection of OTC and health and wellness-related offerings at the front of the store. Retail outside of prescription fulfilment will continue to be important to the business model, as a hedge against the lower-margin reimbursement rates of insurers, but it will be curated to the community that it serves, which stands to benefit OTC brands with a clear understanding of their consumer demographic.

Read our briefing, Where Consumers Shop for Consumer Health, for a global overview of where consumers shop for healthcare products, or read one of our opinion pieces: Navigating Amazon's 3P Maze to Drive Brand Value, to better understand the complexities of selling on Amazon’s 3P marketplace, or 25 Questions Every Brand Should Ask Before Joining a Marketplace, to determine if selling on a marketplace is the right choicefor your brand.