Written By Rob Bertman, CFA, CFP®
Updated on December 24, 2023
When we’re looking at the job outlook for pharmacists, it’s important to see how many job opportunities 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. But if there are fewer pharmacists job openings and a bunch of pharmacists looking for jobs, it will take longer to find employment. Income can stagnate and even go down.
Before the pandemic, there was clearly an oversupply of new pharmacists. Many new PharmDs would only receive offers of part-time employment in the most desirable places to live. Some felt that they had to live in a rural location simply to have a good full-time opportunity.
Still others sought more education and residency training to insulate themselves from the difficult labor market trends in retail pharmacy.
But then COVID arrived and destroyed all of these trends. Will the huge need for pharmacists during the pandemic change the long-term dynamics of the pharmacist labor market? We'll explain our thoughts and show you why we expect strain in the profession going forward.
How to become a pharmacist
Pharmacists have critical jobs as part of the overall healthcare team. It's their responsibility to make sure that patients receive not only the right medications but also the appropriate dosages. They also discuss potential side effects with patients and any existing medical conditions that could react negatively to the medicine. With all this in mind, it's no surprise that pharmacists have rigorous education requirements.
Most pharmacy schools require applicants to have completed at least two years of post-secondary education and many require a bachelor's degree. At a minimum, most pharmacy programs will want their students to have completed undergraduate courses in chemistry, biology, and physics.
It typically takes four years to graduate from a Doctor of Pharmacy program. However, some schools offer an accelerated 3-year option. Completing a one-or two-year residency is not a licensing requirement. But it may be required to qualify for certain advanced positions.
After graduation or residency, prospective pharmacists must pass two licensure exams. The first is the NAPLEX. The second will either be the Multistate Pharmacy Jurisprudence Exam (MPJE) or an alternative state-specific test. Graduates may also choose to pursue optional certifications to demonstrate advanced knowledge or patient care skills.
Pharmacist job outlook
According to the U.S. Bureau of Labor Statistics (BLS), here is the modest outlook for the pharmacist job market. While the expected average growth rate for all occupations over the next 10 years is 5%, pharmacist employment is expected to only grow by 2%. This is a better outlook than the decline that was expected pre-pandemic.
- The median wage for pharmacists in 2021 was $128,570
- There were 323,500 pharmacist jobs in 2021
- The number of pharmacist jobs will grow to 331,100 positions by 2031
- 14,000+ pharmacists graduate yearly but there's only about 13,600 openings
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. During the pandemic, this oversupply was absorbed due to the labor market shortage.
Older pharmacists have significant home equity and retirement account gains in the past two years. This could cause a higher retirement rate, but unless something drastic happens, an increasing number of retirees will not make up long-term for the structural oversupply of new graduates.
Because of the earlier mention of supply and demand, long term, we would expect declining hours, reduced or flat lining pay, and less attractive working conditions for the future.
Where could pharmacy job growth come from?
Baby boomers will age. And as they do, so will there need for prescription medications. The problem is that automation increases productivity per pharmacist and thus reduces the number needed.
The biggest growth in the pharmacy profession is likely to come from non-retail healthcare settings such as hospitals, physician offices, and outpatient care centers. These kinds of places are seeing more and more value in having clinical pharmacists on hand so they can dispense medicine and monitor patient responses. In some states, pharmacists can even administer vaccinations.
This does not bode well for pharmacists with student loan debt. That said, most hospital pharmacists would qualify for 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.
Retail settings like Walmart, CVS, Walgreens, Target and Express Scripts are still supplying a large number of jobs at the moment. But they're facing a lot of competition from online pharmacies, mail order, and specialty pharmacies. It may have been too quick because now they’re starting to reduce full-time pharmacist positions.
Additionally, the BLS says that pharmacy technicians are increasingly performing tasks that pharmacists use to do. These include things like collecting patient information and preparing certain types of medications.
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 December 2022, there are 142 schools in the U.S. that are accredited by the Accreditation Council for Pharmacy Education (ACPE). That's over 60 more than in 2000, or about a 73% growth in Doctor of Pharmacy programs.
This increase in the number of schools is in large part driven by the change in PLUS loans in 2006. After that date, students could take out unlimited debt up to the cost of attendance. After 2007, they could pay it back as a percent of their income under an IBR plan. That change turned an uneconomic $300,000 pharmacy degree into a realistic option.
More pharmacy programs 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. This 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 over 80%.
Not surprisingly, there are more PharmDs graduating than ever. Over 14,000 are graduating from pharmacy school each year, according to the American Journal of Pharmaceutical Education. Will 5% of the existing 314,300 pharmacists retire every year? Probably not.
There used to be a shortage of people to meet pharmacist job growth. And that's 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 $111,820 according to PayScale.
Keep in mind that 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 have been 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 drug stores.
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 Have Been Falling Precipitously
In a 2017 interview with Drug Topics, Lucinda Maine, the executive vice president and CEO of the American Association of Colleges of Pharmacy (AACP), said the number of applicants to pharmacy schools is shrinking.
Although the number of applications to pharmacy school has started to fall, the acceptance rate for pharmacy school as of the most recent data from 2021 shows an overall acceptance rate of 89%!
A smaller number of applications could theoretically help current pharmacists and their career prospects. But the applicant number needs to shrink 50% or more to bring back the “be a pharmacist, they make so much money!” environment. The only way that happens is if at least half of pharmacy schools close their doors. That will likely not happen as long as programs can access unlimited federal student loans.
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 chain 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.
These trends were mostly paused due to the pandemic, but since more normal economic times have resumed, these long-term dynamics have begun to resume and show no signs of reversing.
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 pharmacy 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 job prospects besides traditional positions graduates usually fill.
How to approach pharmacy student loan repayment
You might look at these number and think it's a bunch of doom and gloom. Far from it. I simply want to share the numbers with you so that those passionate about pharmacy continue to pursue it. If you were planning to pursue it to get an easy path at professional earnings, you might want to look at additional options before committing.
If you already have debt though, there's no need to be concerned about it because at worst, it's a highly complex tax on your income.
A general rule of thumb on student loan repayment for pharmacists 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 confirm that you're not eligible for PSLF or other loan forgiveness options.
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 are the experts for pharmacy school student loans
We’ve worked with a huge number of pharmacists (and other healthcare professionals) 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.
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. When you realize how to optimize your loans, you'll feel a lot better even in a tough pharmacist job market.
We’ve done over 11,000 individual consults and have advised on more than $2.5 billion in student loans. If you want to share the details of your situation and learn how we could help, simply click the “Get a Student Loan Plan” button below.
Travis Hornsby contributed to this report.
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