Forced to sell medications at a loss, rural Texas pharmacies seek new survival tactics

Crystal McEntire lives two lives.

Every morning, she wakes up to tend to her family’s ranch near the top of the Texas Panhandle that houses a herd of Red Angus cattle.

But after mornings of farm work, she exchanges her ranch jeans for pharmacy jeans, she said, and drives 26 miles to Hyland’s Pharmacy in Wheeler County — one of two pharmacies she owns — a drive she described as a moment for decompression.

“It’s all in your mindset, because it is a lot. When I’m at the pharmacy, I focus on the pharmacy. And when I’m working on the cattle, I focus on loading the cattle in the chute,” McEntire said.

McEntire never planned on owning both a cattle business and pharmacies. But as the profits from her pharmacy dropped since she opened it in 2009, she needed to use McEntire Red Angus — her family’s cattle business across the border in Sweetwater, Okla. — to float her pharmacies.

McEntire’s struggles are not unique. Texas has grappled with pharmacy closures over the past decade. Sixty percent of Texas counties did not have a pharmacy in 2023. In 2025, more than 4.3 million Texans lived in pharmacy deserts, meaning they must travel farther to reach a pharmacy than a supermarket. And one pharmacy closes each week in Texas, according to the Texas Pharmacy Association.

McEntire and many other independent pharmacists place the blame for their financial challenges on pharmacy benefit managers, or PBMs. PBMs, which are usually listed on people’s insurance cards, negotiate drug prices for large employers and insurance companies and maintain the list of drugs that are covered by insurance plans, giving PBMs control over how much money a pharmacy can make per prescription. Reimbursement rates have gotten so bad for some prescriptions that pharmacies are having to sell some at a loss.

Dana Tilton, who owns Dana’s Pharmacy in Spur, about 67 miles east of Lubbock, recently filled an insulin prescription that cost Tilton $414.21 to stock. The PBM reimbursed Tilton $403.16 and the customer didn’t have to pay anything, meaning she lost $11.05.

The Texas Tribune reached out to the country’s biggest PBMs — Optum Rx, CVS Caremark and Express Scripts — which control 80% of all prescription claims in the U.S. They replied they’re doing all they can to support independent rural pharmacies, not put them out of business with unfair reimbursement rates.

“Pharmacy is the most accessed benefit in health care, and community and independent pharmacies are essential care providers, especially in rural and underserved communities,” according to Optum Rx’s statement. “Optum Rx supports these pharmacies through cost‑based reimbursement aligned to manufacturer pricing actions.”

“Last year alone, CVS Caremark saved its clients $45 billion in prescription drug costs, and our client retention rate is between 98-99% every year,” according to CVS Caremark’s statement, adding they employ over 28,000 Texans, operate 750 Texas pharmacies and generate $46.9 billion in positive economic activity in the state each year.

Express Scripts did not reply to a request for comment.

Rural pharmacies are most acutely affected by this loss of profit because of their lower revenue streams compared to corporate and urban pharmacies. Now, rural pharmacies are taking on novel strategies — like cattle businesses and gift shops — to stay afloat.

PBMs are “business people. They’re not pharmacists. It’s a business to them. They’re not as invested in these people as I am,” Tilton said.

Both Hyland’s Pharmacies and Dana’s Pharmacy are preventing two counties from becoming pharmacy deserts. Without each of those businesses, several other neighboring counties that don’t have pharmacies would also lose access.

Being a resident in a pharmacy desert means having less consistent access to medications, vaccinations and pharmacist-led care. It also means worse medication adherence, leading to the worsening of chronic conditions and overall health outcomes, according to research by Ohio State University.

“For some of them, I took care of their grandma and grandpa, and I take care of their mom and dad… they’re my friends and my neighbors,” Tilton said. “When you’re working in a big chain or a big store in a big city, you don’t know those people, and you don’t know their lives like we do in these small towns.”

“We’ve got to have the cattle”

Owning both businesses came naturally to McEntire. She grew up on a farm and when she started pharmacy school, she’d spend weekdays taking courses and weekends at home, tending to her cattle with her husband.

McEntire is following in the footsteps of her parents, who also relied on two sources of income — a cattle business and an oil drilling business. They used both businesses as safety nets for each other. In the early-2010s — the first years she was operating both businesses — Hyland’s revenue supported McEntire Red Angus’ operation. Now, the cattle company keeps her pharmacy in business.

“When the oil field was good, the cattle was bad, or when cattle was good, the oil field was bad,” McEntire said of her parents’ business model. “I feel like, now, you’ve got to be diversified. To be in the pharmacy business, we’ve got to have the cattle.”

McEntire isn’t the only independent pharmacist who has turned toward other revenue streams to support her faltering pharmaceutical profits. Tilton’s pharmacy in Spur, home to 900 people, sells prescription and over-the-counter drugs alongside hair products, clothing, gifts and other goods on an as-needed basis. If she knows there’s an upcoming baby shower in town, for example, she’ll stock up on baby gifts. She wants to start selling Botox injections to her customers, so she’s obtaining a license.

“It gets leaner and leaner every year and there’s more and more competition because of the big mail-order PBMs,” Tilton said.

For both Tilton and McEntire, the most difficult aspect of staying open as an independent pharmacy owner are poor PBM reimbursement rates.

The exchange between a PBM and pharmacy starts when a customer hands their insurance card to the pharmacist; many insurance cards list the PBM company. When customers go to pay for a prescription, PBMs have already determined how much the insurer and customer is paying for the drug and how much the pharmacy is reimbursed for selling the drug.

In 2025, the parent companies of the three largest PBMs in the U.S. were included within the top 13 companies on the Fortune 500, which ranks the largest U.S. companies by revenue.

Because those PBMs control the vast majority of drug claims in the country, for many prescriptions, pharmacies have no choice but to accept the rates these PBMs give them. It’s a “take-it-or-leave-it-deal,” as Tilton put it, because it’s the only opportunity to provide life-saving medication to many customers — even if that means selling medication at a loss.

“The pharmacist has absolutely no control whatsoever,” Tilton said. “(PBMs) know what’s going on. We don’t.”

Rural pharmacies aren’t the only institutions affected by PBM rates. PBM rates at any pharmacy — whether in a hospital, at a corporate-owned pharmacy or a mail-order pharmacy — have a high likelihood of being determined by one of these three PBMs.

“If you are smaller, if you are independent, if you have a more fragile revenue stream, you are more susceptible to the types of strong-arming that can happen when a larger entity comes into the system,” Charles Miller, director of health and economic mobility policy at Texas 2036, a nonpartisan think tank, said. “I would not say that it is a uniquely rural story — it is a disproportionately rural story.”

Consequences of a rural pharmacy desert

Rural pharmacies disproportionately serve older, lower-income populations compared to their urban peers. They operate not as a storefront simply to get medication but also as a community hub, offering people in the area help on a variety of issues.

McEntire, for example, recently ordered a customer’s favorite overalls for him because he doesn’t have internet at home, nor a credit card. She’s answered the questions of anxious people who just came from the hospital and were told they had cancer. In many cases, people will go to the pharmacy before the emergency room in dangerous medical situations, simply out of familiarity, McEntire said.

“We connect with them better. We don’t just move on to the next patient,” McEntire said.

McEntire and Tilton both credit the fear of creating a pharmacy desert as a major motivator to stay open. Tilton travels 24 miles to a neighboring pharmacy desert – King County – to help fill prescriptions at a 60-bed nursing home, so shutting down her business would have ripple effects beyond her home in Dickens County.

Lack of access to a pharmacy forces people to go without medicine or make their medicine last longer, according to Ohio State University researchers. Mail-order pharmacy is not a viable option for some rural Texans who lack broadband access.

McEntire had six customers leave Hyland’s Pharmacy to get their prescriptions filled at corporate or mail-order pharmacies. But, she said, all six of those patients returned to Hyland’s not long after.

McEntire believes this was because rural patients appreciate independent pharmacies that are better able to accommodate their unique needs. For example, one couple that left Hyland’s returned after Walmart consistently filled only one of their prescriptions at a time, forcing them to make the two-hour-long journey to and from Walmart multiple times a week.

Independent rural pharmacies offer better customer service than their corporate and mail-order peers, McEntire said. One of her patients was prescribed a blood pressure medication containing a compound she’s allergic to. McEntire recognized the issue and advocated for the safer medication to be covered by insurance.

“I knew my patient, knew her problems,” McEntire said. “Pharmacy is an industry that can kill you or cure you. If I give you the wrong medicine, it can kill you. If I give you the right medicine, I can cure you.”

Tilton hasn’t seriously considered closing down her shop. She’s owned Dana’s Pharmacy for 30 years and plans to retire in nine years when she turns 70. But if she can’t find somebody to buy Dana’s, she’d rather run the pharmacy until she “absolutely can’t do it anymore,” because she doesn’t want her community to go without a pharmacy.

McEntire, though, has considered closing her second pharmacy in Shamrock, also in Wheeler County. But she knows that if she did, her employees would lose out on their wages, McEntire said.

“I know they need their payroll to put food on their table for their families,” McEntire said. “It is a huge burden.”

More transparency in reimbursement rates

Texas lawmakers have passed several laws impacting the relationship between PBMs and pharmacies, but they’ve done little to address the core issue of fairer PBM reimbursement rates.

One bill, passed last year, provides protections for pharmacies in their contracts with PBMs. Another, also passed last year, prohibits “gag clauses,” which previously prevented pharmacists from informing patients if their medication was more affordable to obtain elsewhere.

But pharmacists and advocates believe that more can be done to ensure pharmacies can run independently, without relying on other sources of income. RoxAnn Dominguez, president of the Texas Pharmacy Association, supported both bills but said state and federal lawmakers need to pass laws preventing PBMs from underpaying pharmacists and increasing PBM reimbursement rate transparency.

She noted some states, such as Ohio and California, are under a flat-fee PBM model, which pays pharmacies a fixed, transparent fee per claim. She thinks a similar system could be effective in Texas.

“I think most people just want transparency,” Dominguez said. “If everybody’s getting paid the same, then what you’re going to actually compete on is service, and who does the best by patients.”

Many pharmacists and advocates hope for an overhaul of the PBM system. But Miller believes supporters of a PBM overhaul should be wary of placing the blame for the entire system’s design on any individual person or organization.

“A common thing is to look at a PBM and say, ‘we don’t like what’s happening with PBMs,’ and the next natural conclusion would be to say, ‘well, that PBM is acting poorly’ or ‘we don’t like it,’” Miller said. “Ultimately, we need to look at the rules that we have designed around PBMs, and if we don’t like how they’re behaving, it’s probably because we set up a poor system.”

In the meantime, Tilton and McEntire will continue to try and keep their pharmacies afloat through their gift shops and cattle businesses.

Recently, plans for a data center near Spur by an artificial intelligence company were approved. Tilton is excited for the prospect of new businesses coming in as a result. But this, too, may attract corporate pharmacies to the area, posing a potential threat to her business.

“That’s part of their work method — trying to run us little guys out.” Tilton said.

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Disclosure: Texas 2036 and Texas Pharmacy Association have been financial supporters of The Texas Tribune, a nonprofit, nonpartisan news organization that is funded in part by donations from members, foundations and corporate sponsors. Financial supporters play no role in the Tribune’s journalism. Find a complete list of them here.

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This story was originally published by The Texas Tribune and distributed through a partnership with The Associated Press.