Comment by mandevil

Sister-in-law is a vet tech at a place that sold out to PE a few years ago. Wife is a pharmacist who worked at a small chain of pharmacies and had it taken over by one of the national ones. Both industries are seeing massive consolidation.

A couple of things that they observed between them: A) a lot less interest among newly graduated pharmacists and vets for going into business themselves- they are deeply in debt from school, taking out business loans to start up a new business on top of those loans is a real threat to their financial stability B) they want to do vet/pharmacy things with a reasonable work/life balance, not running a business things with an insane work/life balance while carrying that huge risk C) (unique to vet) people want the convenience of big, one stop shops that can offer complimentary goods like grooming, boarding, surgeries, and their medications all in one place, which requires large capital investments- the vet firm my s-i-l works for just got a nice brand new facility with brand new fancy equipment and surgery centers etc. D) (unique to pharmacy) Pharmacy Benefit Managers are destroying the reimbursement rates of small pharmacies, if you aren't a national chain you don't have the scale to effectively negotiate with the three PBM's that control 80% of the drug insurance business, and they are getting gutted by those PBM's, forcing pharmacy consolidation (one of those three PBM's is actually one of those national drug stores, CVS Caremark- thank the George W Bush administration for that bit of anti-competitive nonsense).

I'm not as sure about vet as I am about pharmacy, but at least in pharmacy it is not generally any harder because of regulations or anything like that, to start up than it was decades ago. My wife also points out that because we have more drugs than before, with more varied storage requirements, and they are more expensive than before, inventory costs a lot more than it did decades ago. So these newly graduated Pharm.D's with their 200k in debt would need to get even larger loans to start up a new business, and they get reimbursed less for it thanks to PBMs, making it hard for the indy pharmacies to stay in business whether they are new or old alike.