HomeTown Pharmacy closes four Michigan locations citing financial strain
Money Moves Grand Rapids, MI localRegional chain blames pharmacy benefit manager reimbursement rates as Michigan independent pharmacies keep closing
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Overview
Updated 1 hour agoHomeTown Pharmacy closed four Michigan locations on September 1, including three in Traverse City and one near Muskegon. The regional chain said it faces "continuing financial strain."
The company blames pharmacy benefit managers, the middlemen that set drug reimbursement rates for insurers. Independent pharmacies say those rates often fall below what it costs to buy and dispense the drugs. Since 2024, 270 Michigan pharmacies have closed.
Why it matters
If PBM reimbursement rates stay below drug costs, more independent pharmacies close, and rural patients lose their nearest source of prescriptions.
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Organizations Involved
Michigan-based regional chain of independent community pharmacies.
Traverse City hospital that works with HomeTown Pharmacy on an ambulatory pharmacy.
Companies that manage prescription drug benefits for insurers and set pharmacy reimbursement rates.
Timeline
January 2024 September 2026
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Local outlets report the closures
Latest ReportWOODTV and Yahoo News publish HomeTown Pharmacy's announcement.
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HomeTown Pharmacy closes four Michigan locations
ClosureThree Traverse City stores and one near Muskegon close, citing PBM reimbursement strain.
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Michigan pharmacy closures begin accelerating
TrendMichigan loses 270 pharmacies over the next two years, according to local reporting.
Historical Context
3 moments from history that rhyme with this story — and how they unfolded.
Medicare Part D transition (2006)
When Medicare Part D launched, private insurers and PBMs began managing drug benefits for seniors. Pharmacies had to accept PBM-set reimbursement rates to stay in network.
Independent pharmacies reported thinner margins and some closed or sold to chains.
PBMs gained lasting control over drug pricing and network access.
The same PBM reimbursement mechanism is at the center of HomeTown Pharmacy's closures.
Ohio PBM lawsuit (2019)
Ohio's attorney general sued CVS Caremark, Express Scripts, and OptumRx, alleging they overcharged the state's Medicaid program through spread pricing, charging taxpayers more than they paid pharmacies.
The lawsuit drew attention to PBM practices and led to state oversight hearings.
It made PBM reimbursement a legislative issue in multiple states.
It shows PBM reimbursement practices are a recognized policy problem, not just a company complaint.
Rite Aid bankruptcy (2023)
Rite Aid filed for Chapter 11 bankruptcy and began closing hundreds of stores. The chain cited debt and opioid litigation, not PBM rates, but the closures reduced pharmacy access in many communities.
Rite Aid closed stores and restructured under new ownership.
The case showed how pharmacy closures can create pharmacy deserts, especially in low-income areas.
It illustrates the community impact of pharmacy shutdowns, which HomeTown Pharmacy says it is trying to avoid in rural areas.
