GLP-1s Present Profitability Challenges to Independent Pharmacies | AAP 2025

The diabetes treatment landscape is undergoing a significant transformation, with glucagon-like peptide-1 (GLP-1) receptor agonists rapidly displacing traditional insulin therapies. According to Scott Biggs, director of supplier services at IQVIA, recent market analysis have shown that insulin sales have plummeted from 45% to just 12% of the market, while GLP-1 receptor agonists have surged from 20% to 56% and continue to grow.

However, this market evolution presents significant challenges for pharmacies, said Greg Mitchell, owner of United Drug Superstore in Hatch, New Mexico. Despite the increasing popularity of GLP-1 medications, profitability remains a critical concern. Pharmacies are struggling with small margins, and in many cases, dispensing these drugs can result in financial losses.

According to Mitchell, rural pharmacies may have slightly more favorable contract terms, but the overall economic pressure remains intense. The industry now faces a complex challenge: how to maintain patient access to these increasingly important medications while ensuring the financial sustainability of pharmacy operations.

At the American Associated Pharmacies (AAP) Annual Conference, held April 10 to 12 in Austin, Texas, Drug Topics® sat down with Biggs and Mitchell to discuss how GLP-1s have changed the landscape of diabetes management in retail pharmacy, and what the biggest profitability challenges are with GLP-1s.

“There is minimal profitability in GLP-1s,” Mitchell said. “A lot of pharmacies, on a typical contract, will actually be upside down or in the red on a GLP-1. That makes it very difficult to dispense. My pharmacy has some rural contracts that are a little bit higher, so that is not usually a concern. But even on our Medicaid business, when we are National Average Drug Acquisition Cost (NADAC) based, NADAC does not cover our cost.”

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