Pharmacist Job Market in 2020: Hospital Employment Up, Retail Salaries Down (rerun)

This week, I’m rerunning some popular posts while I prepare for today's live video webinar: Drug Channels Update: Buy-and-Bill Market Trends.

Click here to see the original post and comments from June 2021.

---

The Bureau of Labor Statistics (BLS) has recently released its employment and salary data for 2020. That means it’s time to update Drug Channels Institute’s (DCI) annual analysis of pharmacist salaries and employment.

We have found that the share of pharmacists who work at hospitals reached a new high. What’s more, average base salaries for retail pharmacists have dropped, while salaries have risen for pharmacists employed by hospitals, physician offices, and other non-retail settings. 

A word of caution: These data were collected during the peak of last year’s pandemic shutdowns. I suspect that 2020 will turn out to have been a much more challenging year for retail-employed pharmacists.

TREND TRACKING

The table below profiles overall employment and salaries for U.S. pharmacists in 2020. Details on the data and our methodology appear at the bottom of this article.

[Click to Enlarge]

Our observations about the recent employment trends:

• Overall retail pharmacist employment has been stable. For 2020, there were 182,310 pharmacists employed at retail outpatient settings: chain drugstores, independent pharmacies, supermarkets, mass merchants, and mail pharmacies.
  
  Total employment in these settings has declined from its recent peak of about 189,000 people in 2017, but has been fairly stable since then. However, retail pharmacist employment has shifted from mass merchants to pharmacies and drugstores.

• Hospitals and physician offices continue to grow as a source of pharmacist employment. Total U.S. pharmacist employment has grown, from more than 286,000 in 2013 to nearly 316,000 in 2020. The share of pharmacists employed in non-retail settings grew significantly during this period, from 27% in 2013 to 32% in 2020. (See next chart below.) Consequently, pharmacist employment at non-retail settings—hospitals, physician offices, outpatient care centers, and home health—grew by nearly 22,000 from 2013 to 2020.
  
  Note that the non-retail figure likely understates pharmacist employment by hospitals. That’s because hospital-owned retail pharmacies are included within the retail category. (See our Notes for Nerds, below.)

[Click to Enlarge]

INCOME OUTCOMES

Observations about the recent salary trends:

• The average pharmacist’s salary was unchanged for 2020. Despite the pandemic, overall average salaries across all industry settings was $125,460—roughly equal to the 2019 figure of $125,510. However, pharmacists who work in hospitals had slightly higher pay (+0.7%; green line in chart below), while those in retail outpatient dispensing formats had slightly lower pay (-0.8%; orange line).

[Click to Enlarge]

• The salary gap between a pharmacy owner and an employed retail pharmacist has grown slightly. For 2019, U.S. government data show that the average gross base salary for a pharmacist working in a chain, independent, or long-term care setting was less than $124,000. Our analysis of industry survey data indicates that the average pharmacist owning a single pharmacy earned about $141,000 in 2019. (See Pharmacy Economics Rebound (A Little) Amid Glimmers of Good News.) Independent pharmacy owner profits improved due largely to better expense control.

NOTES FOR NERDS

We rely on the 2020 Occupational Employment Statistics (OES) data from the Bureau of Labor Statistics (BLS). BLS and the State Workforce Agencies (SWAs) collaborate on the OES survey. BLS funds the survey and dictates its structure, while the SWAs collect most of the data. The OES survey categorizes workers by detailed occupations based upon the Standard Occupational Classification (SOC) system. For more on these data, see the OES FAQ page.

The Pharmacist occupation code is 29-1051. Using these data, we identified pharmacists working in various retail and non-retail settings based on the NAICS (North American Industry Classification System).

A few more items of note:

• BLS computes the annual wage data by multiplying an hourly mean wage by a "year-round, full-time" figure of 2,080 hours. These data exclude bonuses and employer costs of nonwage benefits, such as health insurance and contributions to retirement plans.

• Pharmacists employed by an independent pharmacy are included. Paid owners and officers of incorporated independent pharmacies are included, too. However, the data exclude business owners and partners in unincorporated pharmacies.

• The data show the location of employment as a "pharmacist." They do not specify the duties that the pharmacists perform or the entity that operates the pharmacy.

• The NAICS industry code “446110 Pharmacies and Drug Stores” includes drug stores, pharmacies, and on-site institutional pharmacies. Thus, a pharmacist employed in a hospital’s retail outpatient pharmacy is likely classified as an employee of a retail pharmacy.