When we’re looking at the job outlook for pharmacists, it’s important to see how many jobs are out there (demand) versus how many candidates are out there to fill the positions (supply).
If there are more open positions and fewer people to fill them, it’s easier to get a job, and thus, pharmacists’ salaries would likely increase. If there are fewer job openings and a bunch of pharmacists looking for jobs, it will take longer to find employment; income could stagnate and even go down.
First, let’s take a look at the job market for pharmacists.
Note: The job market for pharmacists during the COVID-19 pandemic has improved markedly compared to the few years preceding it. This article reflects our view that the long term trend of the pharmacist job market will face challenges given the oversupply of new graduates at the pharmacy school level.
Pharmacist job outlook
According to the Bureau of Labor Statistics (BLS) that were just released, here is the dim outlook for the pharmacist job market.
- There were 314,300 pharmacist jobs in 2018
- The Bureau of Labor Statistics projects 0% growth over the next 10 years
- The number of pharmacist jobs will contract by 200 positions to 314,100 in 2028
- Approximately 15,000 pharmacists graduate yearly when a projected zero new pharmacist jobs are being created
In my conversations with industry experts, perhaps the retirement rate of pharmacists will be a couple thousand each year.
At a minimum, it seems as if a net 10,000 pharmacists will be entering the labor force yearly with nowhere to go. Because of the earlier mention of supply and demand, we would expect massively declining hours, reduced pay, and less attractive working conditions for the future.
Where Could Pharmacy Job Growth Come From?
Baby boomers will age. The problem is that automation, Amazon, and other forces increase productivity per pharmacist and thus reduce the number needed. Out of the pharmacist job growth that is expected, much will come from the hospital setting. Hospitals are seeing more and more value in having clinical pharmacists on hand so they can dispense and monitor patient responses to medication as well as patient outcomes.
This does not bode well for pharmacists with student loan debt. That said, most hospitals would be qualifying employers to get Public Service Loan Forgiveness (PSLF), which could save PharmDs a lot of money paying back their student loans. That is, if you can get a job.
Places like Walmart, CVS, Walgreens, Target and Express Scripts are still supplying a lot of those jobs at the moment in the private sector. But those companies set up shop and got in the game quickly. It may have been too quick because now they’re starting to reduce full-time pharmacist positions.
Adding it all together, the projected growth rate means that compared to many other professions we advise, I would not recommend someone go to pharmacy school for financial reasons. You had better be passionate about the work and be the best in your class.
More schools of pharmacy enter the market to meet demand
More pharmacists are graduating than ever because there has been tremendous growth in the number of pharmacy schools. As of January 2019, there are 142 accredited pharmacy schools in the U.S., about 60 more schools than in 2000, according to the American Journal of Pharmaceutical Education (AJPE). That’s 73% growth in just the schools, which is huge.
More schools mean that more applicants are getting accepted to school and becoming PharmDs. All of these new schools need to fill their classrooms with students so they make money, which means it’s easier than ever to get into pharmacy school.
It used to be that only about 32% of applicants were accepted into a PharmD program, but acceptance rates have skyrocketed to 82%.
Not surprisingly, there are more PharmDs graduating than ever. Between 14,000 and 15,000 people are graduating from pharmacy school each year, according to the American Association of Colleges of Pharmacy (AACP). Will 5% of the existing 314,300 pharmacists retire every year? Absolutely not.
There used to be a shortage of people to meet pharmacist job growth, which is when the pharmacist salary really started to rise. But the increase in schools has led to an upsurge in students and graduates. That could mean a leveling out of pay for pharmacists. Right now, the median entry-level pharmacist salary is $105,936, according to PayScale.
Keep in mind that’s for pharmacists who are fully employed.
The “real” job market for pharmacists
It may seem like the job market for pharmacists is growing rapidly. But we’ve heard from hundreds of pharmacists here at Student Loan Planner, and many of them are having trouble finding full-time work.
Pharmacists often get the short end of the stick as these major pharmacy chains try to cut costs by hiring many part-time employees instead of paying for full-time benefits. Why can they do this? It’s because of all of the people now being accepted and graduating with a PharmD.
Companies like Kroger laid off pharmacists and moved weekly work hours down from 40 to 32. CVS, Walgreens and Target are hiring part-time pharmacists rather than full time. We’ve heard from many pharmacists that they have to take on two part-time jobs because their employer isn’t giving them enough hours.
But it’s not only that. Residency is also now becoming a thing for pharmacists. Though this leads to much better training, it’s not great for salaries. It means hospitals can pay less for pharmacists right out of school.
Hospitals can do this because the pharmacist job market is becoming more and more competitive. Pharmacists are chasing the highly-coveted, full-time jobs at hospitals, where they get the hours they need and also qualify for PSLF.
Hopefully, the projected growth of pharmacist hospital jobs will come to fruition because they’re one of the better positions to get as a pharmacist compared to working in a retail setting.
Pharmacist career growth
We are certainly at a crossroads.
What we can feel fairly sure about is that the demand for pharmacists is there and should continue to grow. The biggest question is what the job market will actually look like. The primary factor will be the number of new pharmacists graduating each year.
The growth of pharmacy schools and graduates has outpaced pharmacy job growth, and right now, it appears the supply of new PharmDs is meeting the job demand. But if the growth of pharmacy school graduates continues to outpace the actual job growth, we could see pharmacist salaries stagnate and the ability to find a full-time job become an even greater challenge.
Pharmacy School Applications Are Falling Precipitously
In a 2017 interview with Drug Topics, Lucinda Maine, the executive vice president and CEO of the AACP, said the number of applicants to pharmacy schools is shrinking.
According to our sources, applicants for the 2019-2020 cycle fell by 15%.
This could theoretically help current pharmacists and their career prospects, but the applicant number needs to shrink 50% or more to fix the problem. The only way that happens is if at least half of pharmacy schools close their doors.
If the pool of applicants to pharmacy school shrinks, some of the poorly-run or overly-expensive pharmacy schools won’t be able to fill their classrooms. This would cause those schools to lose money and eventually close down.
That could cause a chain reaction. Fewer schools mean fewer graduates, which would slow the supply of new pharmacists entering the market. This would then make the job market better for pharmacists.
But if the number of applications stays where it’s at, the pharmacist career outlook for the average graduate is very bleak.
Hopefully, the first scenario plays out so that current pharmacists can have a brighter outlook.
Closing Pharmacy Locations Put More Pharmacists in the Unemployment Line
Smaller stores going out of business have become a frequent happening. When Fred’s closed its 80 stores, that cost the profession about 80-160 jobs.
It’s not just retail locations. Campus pharmacies are also closing (see this example at Rutgers). This puts more pharmacists out of work.
With giant competitors fighting for survival, any inefficient location could easily be pushed out of business. The big employers gain further market share and thus even more leverage over the large number of graduates looking for work. Of course, one way to be competitive is to pay lower wages.
There might be some growth in the hospital setting like we’ve mentioned, but it might not be enough to offset the challenges in other areas of the profession. Clearly pharmacy schools need to prepare students for jobs besides traditional positions graduates usually fill.
We are the experts for pharmacy school student loans
Our whole article has highlighted the struggles facing the pharmacist profession right now. It’s not a good outlook, but there’s definitely hope.
When the internet got adopted, the number of travel agents plunged. However, the ones leftover tripled their productivity. Something similar could happen to the pharmacist profession with the coming wave of automation. There will always be pharmacists out there doing important work making a decent living. It’s just going to look very different from today.
We’ve worked with a huge number of pharmacists who have an average student loan debt of $213,000 to prepare them for this future financially. Some of them didn’t know how to approach their loan repayment with a part-time job. Even the ones with full-time jobs weren’t sure what to do. Most have severe anxiety over their student debt.
Having job uncertainty is hard enough, but not being sure how to pay off six figures of student loan debt on top of that is extremely stressful. So how do you decide which repayment plan is best for you?
A general rule of thumb is that if someone owes less than 1.5 times their income in student loans (e.g., a pharmacist earning $100,000 who owes $150,000 or less in loans) should consider refinancing. Make sure you can afford to pay off your loans in 10 years or less and that you don’t have any eligibility for PSLF or other loan forgiveness options.
But those with two times their income or more in student loans (e.g., PharmDs making $100,000 who owe more than $200,000) should explore income-driven repayment.
We’ve done thousands of individual consults and have advised on more than $700,000,000 in student loans.
If you’re looking to get help finding a solid plan to pay back your student loans, we’d be happy to help. Along with potential savings, most people say they just feel relieved to have a concrete plan they understand.
Pharmacists can learn more about our flat fee planning service here. Ditch your pharmacy school student loan debt anxiety. When you realize how to optimize your loans, you’ll feel a lot better even in a tough pharmacist job market.
If you want to share the details of your situation and learn how we could help, reach out to our team at [email protected].
*Correction: An earlier version of this article mistakenly interpreted the BLS data reflecting a 6% annual growth rate. Instead, the correct interpretation was that the BLS expects a cumulative growth rate of 6% over the next 10 years, reflecting a very poor expected rate of job growth.
Travis Hornsby contributed to this report.