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An Analytical Look at the Past, Present and Future Pharmacy Job Market

Discussion in 'Pharmacy' started by phathead, 09.17.10.

  1. phathead

    phathead Future World Drug Lord Moderator Emeritus

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    SDN Members don't see this ad. (About Ads)
    Re-Post from Pre-Pharm. I will be reanalyzing and editing the portion about school admission/graduation rates.

    It is difficult to discuss pharmacy on SDN in recent months without the a of a debate over the condition of the national pharmacy job market beginning. One person states that in their area the market is terrible and pharmacists are routinely unemployed, while another states that the market is healthy and prosperous.

    In each case, the individual variables which dictate that view are neglected and because of this an accurate picture is not provided.

    What has spawn from these debates is the following article. Here I shall present a summary of data gathered analyzing the health of the pharmacist job market in the United States over the past decade. The most recent set of data points were gathered in 2009 and therefore provide a reasonably accurate depiction of the current conditions we see today.

    My hope is that this piece will provide an understanding of current conditions, and add insight into what very well may be in the future to help alleviate any of the concerns some of us may have.

    How did we get here?

    Before jumping straight into the hard data regarding our the current job market, we must first delve into what circumstances have led us to this point. Most of us here have heard the term "pharmacist shortage" for the entirety of our pharmacy careers, yet may lack a full understanding of how the profession came to have a shortage.

    I must admit that I have only been a part of pharmacy since 2001 so I do not have firsthand experience of the profession prior to then. Information stated here is based upon published papers describing said situations and from discussions with more experienced pharmacists.

    First it must be clarified that every industry and/or profession has cyclical tendencies. Supply and demand fluctuate on a regular basis when leads equilibrium to rarely be stagnant. In a profession program, these tendencies can often be displayed using graduation rates on a yearly basis. In the case of pharmacy, the graph pictured below, beginning in 1960, recounts yearly graduates into the profession.

    [​IMG]

    One can easily recognize the rise and fall of graduates over the past fifty years. It is also notable how each rise in graduates corresponds to an important evolutionary step in the practice of pharmacy. For instance the introduction of Tagament in 1979 is believed to be the first catalyst leading to the drug market we see today. In the 1990s, the rise of novel classes such as statins and SSRIs acted as second catalyst, pushing the profession along at breakneck speed.

    It is equally important to note that the number of graduates does not necessarily correlate to the number of practicing pharmacists added to the workforce. This will be covered in a later section.

    The shortage we are familiar with first began to be recognized towards the end of the 1990s. In fact, as the century drew to a close, the following summation was made in regards to the current workforce conditions of the profession:

    Supply and demand models are extremely fluid, as previously mentioned, but are not necessarily fluid at the same rate. In fact, supply is almost always chasing demand in hopes of finding that perfect equilibrium. Due to the nature of the profession, there is a considerable lag in being able to close that gap between supply and demand due to the amount of time it takes to produce a pharmacist. This lag is one of the main reasons it became difficult to eradicate the shortage across the country.

    An easy way to curb a supply and demand inequality is to increase the cost of the supply. The first half of the decade saw the profession enjoy a rapid rise in salaries and incentives to entice pharmacists from one job to another. It was also not terribly uncommon for a pharmacist to be solicited for a job while at his or her current place of employment.

    Due to these facts, pharmacists at the midway through this past decade wielded extraordinary power over their employers. It is a situation that few other have professions enjoyed on such a large scale. Pharmacists had the ability to select virtually any job they wanted and to do so on their own terms. Pharmacy managers, on the other hand, had little choice but to concede.

    What then evolved was a subset of pharmacists who became spoiled and misguided. Many grew to enjoy their newfound power and the money that came along with it, while others have yearned for the chance.

    This fact remains true today, and one could argue that the sharp uptick in pre-pharmacy and pharmacy students could be attributed to this. A highly unofficial poll conducted with many second and third year students in the past week confirmed that roughly half of the students original reasoning for going into pharmacy was due to the salary involved.

    Now that there were a multitude of students fighting for a small number of spots, and because the shortage was not alleviating quickly for one of the aforementioned reasons, additional schools began to open. The logic was, and still is, that the scope of the pharmacist profession will continue to grow as modern healthcare evolves and that the profession will be able to absorb more practitioners. Today this seems like a very logical statement as the breadth of options for a pharmacist seems to be slowing increasing on a consistent basis.

    These new schools are also responsible for the sharp upward curve of graduates in recent years. There has been roughly at 25% increase in the number of pharmacy schools in the country over the past decade. A concern has now been raised that we may be producing too many new pharmacists for the profession to after many years of little growth.

    Basic economic principals state that if supply truly outstrips demand, the market will be forced to shift and bring the supply back to equilibrium. This could be a self-induced decision or one independent of control, similar to the declining application rates in the past.

    It makes little sense to panic because equilibrium will be reached once again. As stated in the quotation from the 2000 study, pharmacy naturally is slow to rebound due to the time needed to procure new pharmacists. This period, much like other time periods, will be used as guideline in the future to hopefully prevent a similar situation from occurring.

    Knowing this, the truth on the health of the pharmacy job market may not be as bleak as is expected for reasons. Next, hard data will be looked at an analyzed to help derive whether or not the job market is as poor as it may seem.

    A Measure of Current Conditions

    The Pharmacy Manpower Project created the Aggregate Demand Index (ADI) in 1999 as a tool to measure the severity of the shortage of pharmacists in the United States. The manner in which a specific point is derived will not be discussed, but over the past decade studies have proven it to be an accurate measure of workforce conditions across the country.

    One thing to remember is that the numbers of an index are arbitrary and used only to create a simple display of a complex problem. It generally holds no value and is only relevant when compared to other values in the same index.

    Below lists what each value corresponds, which is then followed by the most recent ADI data sets published.

    [​IMG]

    [​IMG]


    [​IMG]

    [​IMG]

    Clearly, the ADI displays that the pharmacy workforce is approaching it's equilibrium point, with a handful of states experiencing a small surplus. For some, alarms may already be sounding when one sees how much the national ADI value has dropped over the past year.

    Despite this, one must note the current ADI levels per setting. Only the community setting, consequently the most prevalent setting, is shown to be close to being overly saturated.

    This makes sense because pharmacy over the last two decades has begun to evolve from a community based practice to a more involved practice in numerous areas of healthcare. Students today are taught more about long term therapy management and working in conjunction with physicians rather than simply filling prescriptions in a retail location. The differing setting demands reaffirms this notion and shows that while the traditional pharmacist job opportunities may be slowing, there are still jobs in the more novel areas of the profession.

    While the ADI itself is more of a real-time indicator of conditions. it is now time to see where the profession has been, and possibly where it is going, by looking at several other key facts.

    Where Is The Health of the Job Market?

    In 2009, the AACP published its most recent review of the pharmacist workforce in the United States. This was a follow up to earlier statistical studies completed in both 2000 and 2004 respectively. The initial study spawned from the same method thinking as the ADI and has since been used to track the health and viability of the profession.

    Here we shall look, and discuss, some of the more important points made during the course of the document.
    We often hear that there are 250,000 pharmacists in the country or that there will be 12,000 graduates this year without considering that not all of those pharmacists are will go into practice. As shown here, roughly 12% of pharmacists do not possess an active role in the workforce. This is an important point to consider when attempting to compare shortage considerations versus the number of new pharmacists.

    A buzz phrase in healthcare over the past few years states that the Baby Boomers are aging and we will need to be prepared to counteract their new influx into the healthcare system. What is often neglected is that your average pharmacists age is increasing in step. Naturally, this makes sense as it has only been in recent years that there exists a sizable amount of pharmacists entering the work force. It must also be recognized that with a large proportion of older pharmacists comes to the fact that in due time they will decide to cut-back hours and eventually retire.

    New students have grim outlooks on the viability of future jobs today, but remember that nearly one half of the profession is within two decades of possible retirement. Even more important is that for these pharmacists, the profession has changed so dramatically since their career's began, that they may be even more liable to cut back their hours or opt for an early retirement altogether.

    If things remain as cyclical as they have been, one could argue that this may be the cause of the next shortage a decade or two down the road.

    Now let's do a little math using some of the information discussed thus far.

    For all intents and purposes, the split in sex of active pharmacists is now 50-50 according to the AACP, and if we assume a total population of pharmacists in the country to be 250,000 we have the following:

    (.10)(125,000) + (0.04)(125,000) = 12,500 + 5,000 = 17,500 / 3 years = 5833 pharmacists retiring per year

    Granted this is based on data from a singular point in time, but with this fact we are now down to roughly just 6,000 new graduates entering the workforce. Remember that 12% of those 6,000 graduates will not practice at a given point and we are left with 5,280 new pharmacists.

    Seems like a lot right? Except that that number represents just a 2% yearly growth for the profession. This number is well below the projected number of new pharmacists that several organizations said we would need over the next two decades to counteract the continued ballooning of the healthcare system.

    And if pharmacy holds pace with the projected national average, the rate of retirement should actually increase over the next fifteen years.

    This is one reason why the Bureau of Labor Statistics states that the job outlook for pharmacists is rather good. They predict a conservative growth of 17% over the period of 2008 to 2018, roughly in line with the numbers above.

    Most importantly, when looking at these numbers consider this analogy before becoming too upset. Population rates are not set simply by the number of births in a given year. It is also determined using the number of deaths per year, as it is the rate that is most important, not a singular number. Without a something to give a number meaning, the number itself is useless.

    Despite what we may want to believe, the actual pharmacist is not physically working more hours than they did ten years ago. In fact, when looking at yearly hours worked, they are working less than they did a decade ago. Granted, this could be explained by the increase in incentive programs over the last decade and in increase in part-time pharmacists, but nonetheless it is an interesting point.

    Few will argue that pharmacists are more overworked than perhaps ever before. Reasons range from a steady increase in the number of prescriptions dispensed yearly (up 39% since 2000), an ever increasing library of drugs, a change in the scope of practice, and PBMs are becoming increasingly involved with the day to day actions of pharmacists. So while pharmacists may be quantitatively working less each year, their actual workload endured on a daily basis is increasing. This, in turn, will have an effect on the real and perceived job market.

    [​IMG]

    It is interesting to note not only that workloads are increasing, but in what area of pharmacy they are increasing. Is it a coincidence that the two largest areas of increase in stressful workload is from those pharmacies who now employ dispensing free or excessively inexpensive medications? The problems with independent pharmacies are well documented and will not be described here.

    One of the signs of severe problems within a profession is when long time employees either voluntarily or involuntarily leave their jobs. Short-term turnover is employee based, not employer or industry based and a certain level is considered healthy. Excessive high short-term turnover rates is a sign of toxicity within the profession and points to an even larger problem. This is something that is not currently being seen.

    Now since pharmacists are now more likely to stay with an employer, that employer will have little need to hire a new pharmacist as often. Due to this, it is not that there are less jobs out there for pharmacists, but that there is less fluidity in the tenureship of pharmacists.

    One final note that has recently been discussed as a cause for the perceived decrease in jobs. An economy in recession forces workers to find new ways to produce income for this household. For pharmacy, it has been discussed that there are many pharmacy graduates who have returned to practicing or are now working full-time in order to counteract the effects of our current economic situation.

    This could be due to a constriction in the specific field they were working in, a significant other being laid off or other personal and financial hardships. A true gauge of the health of the pharmacy job market cannot be undertaken until this particular economic environment begins to climb out of the doldrums.

    What Does This All Mean?

    Taking all of this into account, what does all of this data mean? Is it worth endless nights of worrying for pharmacy students whether or not they will have job five, ten, twenty years down the road? Or is it better to keep an eye on the big picture and realize that localized situations are not representative of the whole.

    During the worst of the shortage years there were still pockets of saturation and even today the reverse remains true. This is not to say that there are distinct areas in the country where a pharmacist may find it nearly impossible to find a job. It is more that the economic, and professional climate, has changed in the last few years and the benefits of the shortage experienced by so many in the past decade are finally waning.

    Hopefully this article has served to enlighten some to facts which may not otherwise be readily available. Others will, no doubt, find fault with the facts presented here and will argue accordingly. The important thing is this, It is easy to cry wolf without considering the view of the entire picture. As professionals, we are all educated individuals, but even we can fall into the quirks of human nature.

    Being able to look beyond our own small world and into our surroundings is a skill that will reaps rewards tenfold over the course of your life. If one thing is taken from this article, I ask that this be it.

    Happy job hunting.



    Sources

    Aggregate Demand Index. Pharmacymanpower.com. 1999.

    Knapp, David. "Professionally Determined Need for Pharmacy Services in 2020." American Journal of Pharmaceutical Edition. Vol 66 (2002)

    Midwest Pharmacy Workforce Research Consortium. "Final report of the 2009 National Sample Survey of the Pharmacist Workforce to Determine Contemporary Demographic and Practice Characteristics." AACP.com. (March 1st, 2010)

    Mott, David A, et al. "Pharmacist participation in the workforce: 1990, 2000, and 2004." Journal Of The American Pharmacists Association: Japha 46.3 (2006): 322-330. MEDLINE. EBSCO.

    Report of the ASHP Task Force on Pharmacy's Changing Demographics. Am J Health-Syst Pharm. Vol 64, 2007.
  2. aboveliquidice

    aboveliquidice No sacrifice - No victory Moderator Emeritus

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    Wow - I need time to take this in...
  3. Carboxide

    Carboxide

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    As a mod, you should know that multiple posting is strictly against the rules.
  4. SHC1984

    SHC1984 Removed

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    Wow this looks very bad. Retail is at 2.85 with 2= saturation. This isn't good...and its only 2010...I wonder what it will be like in 2013! :eek:
  5. owlegrad

    owlegrad Uncontrollable Sarcasm Machine Staff Member Administrator SDN Senior Moderator

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    We can let it go this once, no?

    By "we" I mean the SDN community,of course.
  6. VancTheTank

    VancTheTank .

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    Already posted this in the sky is falling thread
  7. owlegrad

    owlegrad Uncontrollable Sarcasm Machine Staff Member Administrator SDN Senior Moderator

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    I did? :confused:
  8. phathead

    phathead Future World Drug Lord Moderator Emeritus

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    The cross posting was approved, and encouraged, by an admin
  9. VancTheTank

    VancTheTank .

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    No, I did.
  10. owlegrad

    owlegrad Uncontrollable Sarcasm Machine Staff Member Administrator SDN Senior Moderator

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    Oh, that makes more sense.
  11. aboveliquidice

    aboveliquidice No sacrifice - No victory Moderator Emeritus

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    This location has more exposure... Fl isn't looking too hot either. Finding your niche is becoming more and more imperative.

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