How Pharmacies Make Money Beyond Prescriptions

Margins on dispensing have been squeezed for years, yet the corner pharmacy hasn’t gone away—it’s been reinventing itself. From vaccines and rapid diagnostics to beauty aisles, retail media, and digital clinics, pharmacies are building new revenue pillars that don’t depend on filling scripts. Here’s how the money really flows, and how the model differs across the U.S., Europe, and Asia.

Why The Business Model Had To Change

For decades, U.S. pharmacies relied on high prescription volume to offset thin margins. That math has grown harder as reimbursement pressure intensified, payment clawbacks proliferated, and operating costs rose. Independent pharmacies now widely report losing money on a significant share of prescriptions and are leaning into new, billable services and front-of-store categories to stay viable. Industry surveys show the vast majority of independents now offer immunizations and many offer additional clinical services (medication therapy management, point-of-care testing), reflecting a structural pivot away from pure dispensing.

Big chains have made the same pivot—but at scale. CVS Health’s “Pharmacy & Consumer Wellness” segment explicitly names diagnostic testing and vaccination administration alongside a “wide assortment of health and wellness products and general merchandise” as revenue lines. In 2024, CVS said segment revenue rose on pharmacy mix and vaccines even as front-store volume fell, and it disclosed full-year front-store sales of about $21.5 billion (versus ~$100.7 billion from pharmacy in that segment). That is a clear, audited reminder that the non-script business isn’t a side show; it’s a multibillion-dollar pillar.

The Front Of Store: OTC, Wellness, Beauty, Personal Care

Over-the-counter (OTC) medicines and self-care are a global growth story. IQVIA estimates the global OTC market expanded from roughly $150 billion (MAT Q4 2020) to $193 billion by MAT Q4 2024, driven by category expansion and brand investment. Pharmacies capture a significant share of this wallet through cough/cold, pain, allergy, digestive health, vitamins/supplements, and smoking cessation products—categories with better gross margins than most reimbursed scripts.

Beauty and personal care are the other high-margin engines—especially in Europe. At Boots UK, beauty has been central to the turnaround: the Financial Times reported profits surged as beauty sales boomed, with online accounting for over 17% of total sales in the period cited—underscoring how e-commerce strengthens (not cannibalizes) the beauty play.

In the U.S., chains have refreshed formats to emphasize “health & wellness” and beauty. CVS’ segment disclosure above shows how front-store sales remain a material component of the retail P&L; management also noted lower contributions from COVID OTC test kits post-emergency, implying a normalization back to core OTC/beauty categories.

Why it matters economically: OTC, beauty, and personal care categories deliver higher gross margins than reimbursed prescriptions, generate impulse baskets, and reinforce loyalty ecosystems. The strategic goal isn’t to replace prescriptions but to blend traffic: scripts bring people in; beauty, OTC, and wellness increase the basket and margin.

Vaccinations: A Reimbursed, High-Throughput Service Line

Pharmacy-delivered vaccines became mainstream during COVID—and stuck. CDC dashboards show pharmacies administered ~37.6 million flu shots in the 2024–25 season through mid-April 2025 (and millions more thereafter as the season matures), while the CDC’s Federal Retail Pharmacy Program previously accounted for about two-thirds of bivalent COVID-19 doses at the height of the campaign. Those numbers matter because they translate to reliable throughput and third-party reimbursement.

Chains now market broad vaccine menus—flu, COVID-19, shingles, pneumonia, hepatitis, RSV for older adults—keeping immunization rooms busy outside of flu peak. CVS’ 2024 segment notes highlight “increased contributions from vaccinations,” which helped offset front-store softness.

UK twist—vaccines within Pharmacy First: In England, the Pharmacy First program launched nationally on January 31, 2024, paying pharmacies per consultation and with a monthly fixed fee if thresholds are met. Initially £15 per consultation plus a £1,000 monthly payment (threshold-based), with the consultation fee increased to £17 in 2025. Boots alone reported 1 million+ Pharmacy First consultations in the first 18 months, showing how policy can convert clinical work into scalable revenue.

Economics at a glance: Unlike prescriptions, vaccines are (1) billable services with clearer unit economics; (2) predictable, seasonal demand drivers; and (3) cross-sell moments (vitamin D, cough/cold, pain relief, and even beauty seasonal resets).

Diagnostics And “Test-To-Treat”: From CLIA-Waived Tests To Clinic Encounters

Point-of-care testing (POCT) in pharmacies leapt during the pandemic and continues to grow. Peer-reviewed research finds pharmacy CLIA-waived testing grew ~140% since 2019, suggesting enduring demand beyond COVID. Pharmacies run rapid flu, strep, COVID, RSV tests, plus select chronic-disease screenings—often with a “test-to-treat” pathway under standing orders or collaborative practice agreements.

Chains monetize testing in two ways:

1. Retail clinics and staffed consults: CVS MinuteClinic publishes cash prices for flu and strep tests integrated into visits—revenue captured either via insurance claims or out-of-pocket. Many clinics now also bundle assessment + test + prescription initiation where allowed (for instance, strep plus antibiotics under protocol).

2. Pharmacist-run POCT at the counter: Independents and chains alike now offer rapid tests, with industry groups and state boards standardizing playbooks and compliance. Surveys show community pharmacies have rapidly adopted these services.

Why it matters economically: POCT fills weekday daytime lulls, carries attractive per-encounter revenue, and funnels new patients into the store who may not have a regular PCP—expanding the pool for vaccinations, OTC baskets, and adherence programs.

In-Store Clinics, Weight-Management Programs, And Paid Services

Retail clinics remain uneven across chains, but where pharmacies operate them, clinics are fee-for-service engines (insurer-reimbursed or cash pay). At CVS, MinuteClinic continues to anchor many stores’ clinical footprint.

A fast-growing line is weight management. CVS advertises a MinuteClinic weight-loss program that combines coaching and access to FDA-approved GLP-1 medicines where clinically appropriate, and its Aetna unit has promoted a Weight Management program to improve outcomes and manage utilization. At Walgreens, consumer education and services around GLP-1s are now integrated into front-of-store health content and pharmacy counseling; Walgreens has even partnered with Boehringer Ingelheim to recruit clinical-trial participants for an obesity drug candidate—monetizing trial recruitment and community access.

In the UK, Boots Online Doctor sells private, prescription-only weight-loss treatments (e.g., Wegovy, Mounjaro) alongside digital coaching and follow-ups—an out-of-pocket service that sits completely outside NHS dispensing. That’s pure non-script retail health revenue.

Retail Media, Data, And Partnerships: A New Profit Pool

The pharmacy front end has something every brand wants: verified shoppers with rich purchase histories and (in many cases) linked clinical behaviors. That’s why chains are building retail media networks that sell targeted ads to CPG and health brands across websites, apps, and in-store screens.

• CVS Media Exchange (CMX) pitches advertisers on closed-loop measurement tied to actual sales.

• Walgreens Advertising Group (WAG) offers similar retail-media capabilities across Walgreens’ digital and physical footprint.

While chains don’t regularly break out revenue from these networks, they are now an established line item in investor conversations and a material non-dispensing profit driver because ad dollars carry software-like margins.

Pharmacies are also monetizing clinical trial recruitment (Walgreens’ Boehringer partnership above) and payer partnerships for value-based services—new revenue streams that reward the pharmacy’s local reach.

Regional Differences: U.S. vs. Europe vs. Asia

United States: Services As The Second Engine

The U.S. model is characterized by broad scope of practice (immunizations, POCT in many states), large front-store assortments, and tight integration with insurers and PBMs. In 2024, CVS explicitly credited vaccinations for part of its Retail segment strength even as front-store sales softened. CDC data confirm that pharmacies have become a primary venue for shots (flu and COVID), institutionalizing an annual revenue cycle with third-party reimbursement.

Europe (Especially the UK): Publicly Funded, Volume-Based Services

England’s Pharmacy First (nationwide since Jan. 31, 2024) pays pharmacies per consultation and with a monthly fixed fee when activity thresholds are met. Policymakers raised the per-consultation fee to £17 in 2025, a meaningful uplift. Large chains like Boots have leaned in, surpassing 1 million consultations—turning everyday ailments into funded pharmacy encounters. Couple that with Europe’s premium beauty focus (see Boots) and robust OTC self-care growth, and you get a dual model: publicly funded services plus high-margin beauty/OTC retail.

Asia: Digital Pharmacies And Health Platforms

In China, online-first health platforms (e.g., JD Health, Alibaba Health) combine e-pharmacy, telehealth, and wellness products—channels that pharmacies in the West now emulate via same-day delivery and e-commerce. Reuters profiles the businesses as integrated “Internet + Healthcare” ecosystems. In India, Apollo is carving out its digital health and pharmacy unit for a separate listing, targeting ~₹250 billion revenue by FY27 with improving margins—evidence that pharmacy + digital clinical services is a standalone growth story.

Inside The Major Chains: How Diversification Shows Up In The Numbers

CVS Health (U.S.)
In 2024, CVS’ Pharmacy & Consumer Wellness segment generated about $124.5 billion in revenue, with $100.7 billion from pharmacy, $21.5 billion from front store, and the rest from “other.” Management called out vaccinations as a positive contributor and front-store volume (including OTC COVID test kits) as a headwind—classic signs of a post-pandemic reset toward core non-script categories and billable services. MinuteClinic, diagnostic testing, and Aetna-aligned care programs (e.g., weight management) add multiple non-dispensing revenue lines.

Walgreens Boots Alliance (U.S./UK/International)
Walgreens’ disclosures break out U.S. Retail Pharmacy and International (with Boots UK the crown jewel). Boots’ beauty-led performance and double-digit online mix have materially improved profitability. Walgreens is also monetizing its consumer reach through WAG, its retail media network, and through clinical trial services (e.g., GLP-1 trial recruitment) that leverage pharmacy locations as community health hubs.

Boots (UK)
Boots illustrates the European mix best: premium beauty + NHS-funded services (Pharmacy First) + private digital health (Boots Online Doctor) for out-of-pocket revenue on weight management and other treatments. That three-legged stool—public funding, premium retail, paid digital care—has underpinned Boots’ recent profit surge.

E-Commerce And Digital Health: From Baskets To Care Journeys

E-commerce isn’t just a convenience; it’s integral to margin growth:

• Beauty and OTC online: Boots’ >17% online sales share shows digital’s importance for higher-margin categories and click-and-collect traffic.

• Telehealth + e-pharmacy: In Europe and the U.S., online doctor services (e.g., weight-management consults, contraceptive renewals, dermatology) feed pharmacy fulfillment and recurring revenue. Boots Online Doctor and CVS MinuteClinic virtual visits are examples of services where the visit is monetized in addition to any product sold.

• Retail media and data: Digital storefronts enable closed-loop ad measurement and on-site search monetization—new, high-margin revenue streams that don’t require more headcount or shelf space.

The Revenue Mix—Category By Category

Over-The-Counter (OTC) & Self-Care

• What it is: Pain, cough/cold, allergy, GI, sleep, vitamins/supplements.

• Why it matters: Scale + margin. The global OTC market hit ~$193B (MAT Q4 2024). Promotions and private label bolster profitability.

Beauty & Personal Care

• What it is: Cosmetics, skincare, haircare, premium beauty.

• Why it matters: Margin leader and traffic driver. Boots’ profit rebound was led by beauty, with sizable online share.

Vaccinations

• What it is: Flu, COVID, shingles, pneumonia, RSV, Hep A/B, Tdap, travel.

• Why it matters: Reimbursed services with large annual volumes (e.g., pharmacies delivered ~37.6M flu shots by mid-April 2025). In the UK, per-consultation fees plus fixed monthly payments turbocharge the model.

Diagnostic Testing & Test-To-Treat

• What it is: CLIA-waived rapid tests (strep/flu/COVID/RSV), chronic screens, sometimes coupled with prescribing under protocols.

• Why it matters: Fast-growing, profitable encounters; pharmacy CLIA-waived testing up ~140% since 2019. MinuteClinic price lists show integrated visit + test bundles that are reimbursed or paid in cash.

Retail Clinics

• What it is: Nurse practitioner/PA-led clinics offering episodic and preventive care.

• Why it matters: Billable visits, cross-sell into vaccinations/OTC, and payer-contracted services. CVS remains the bellwether in the U.S.

Weight-Management & Digital Health Services

• What it is: Coaching programs, GLP-1 care pathways, private online doctor consults.

• Why it matters: High continuity and cash-pay potential (Europe/UK), payer-aligned utilization management (U.S.). CVS and Aetna promote structured weight-management programs; Boots monetizes Online Doctor subscriptions and repeats.

Retail Media & Data Services

• What it is: Ad placements across sites/apps/in-store tied to actual purchases; audience segments for CPG/health brands.

• Why it matters: Software-like margins; incremental dollars with little added labor; rising share of chain “other income.”

Clinical-Trial Recruitment & Partnerships

• What it is: Using pharmacy footprint to identify, screen, and enroll patients (e.g., Walgreens–Boehringer GLP-1 trial).

• Why it matters: Diversifies income and positions pharmacies as research infrastructure.

Case Studies

CVS Health: Blending Services With Retail

CVS’ 2024 results show the retail segment leaning on vaccinations to offset a softer front store while still moving > $21B in non-script goods. The company is also extending MinuteClinic and weight-management programs (with GLP-1 support), and leveraging CMX to monetize site traffic. The combination—services + OTC/beauty + retail media—illustrates a balanced non-dispensing stack.

Walgreens/Boots: Beauty + NHS Services + Digital

In the UK, Boots has executed a premium beauty strategy while scaling Pharmacy First consultations and private Online Doctor services (weight loss, dermatology, contraception, etc.). That triangulation—high-margin retail, publicly funded clinical work, and private digital care—has powered Boots’ profit growth and online mix. In the U.S., Walgreens layers in WAG retail media and clinical-trial partnerships to broaden non-dispensing revenue.

Asia Platforms: Pharmacy As A Digital Health Hub

China’s JD Health and Alibaba Health embody platform-first pharmacy—e-commerce, telehealth, and wellness under one roof. In India, Apollo is separating its digital health & pharmacy unit (with distribution) into a listed business targeting ~₹250B (~$3 billion USD) revenue by FY27, validating pharmacy-plus-digital as a standalone growth engine.

What E-Commerce Changes

Digital has become a revenue multiplier, not a threat:

• Bigger baskets: Online search surfaces premium OTC and beauty, lifting average order values. Boots’ >17% online sales share is proof of scale.

• New ad dollars: Retail media networks monetize on-site search and product pages while suppliers pay for targeted placements.

• Telehealth funnels: Digital consults create paid encounters that often end with pharmacy fulfillment—and recurring refills or follow-ups.

The Strategic Playbook (And Risks)

1) Double down on reimbursed services: Vaccines, test-to-treat, chronic screenings, contraception, and minor-ailment programs (e.g., Pharmacy First) convert clinical time into predictable revenue. Policymakers are clearly willing to fund this access point.

2) Premiumize the front end: Beauty, derm, and performance nutrition drive margin—especially when linked to loyalty, subscriptions, and online discovery. Boots’ beauty-led rebound shows the upside.

3) Monetize data and demand: Retail media (CMX/WAG) and clinical-trial services are high-margin add-ons that leverage traffic and trust built over decades.

4) Integrate weight-management responsibly: GLP-1 demand is strong, but long-term sustainability hinges on coaching, adherence, and payer alignment—hence CVS/Aetna’s structured programs and Walgreens’ clinical-education push.

Risks: Reimbursement volatility, staffing shortages, and shifting regulation can whipsaw service lines. Front-store sales are cyclical and subject to competition from big-box and online marketplaces. But the diversified model—services + retail + digital—offers more levers than dispensing alone.

Bottom Line

Pharmacies are no longer just places that fill prescriptions. They are healthcare access points and omnichannel retailers that make money by:

• Selling high-margin OTC, wellness, beauty and private-label goods,

• Running vaccination and diagnostic services at scale,

• Operating clinics and digital programs (e.g., weight management),

• Monetizing audience and data via retail media and clinical-trial infrastructure, and

• In the UK and parts of Europe, getting paid per consultation for minor ailments through programs like Pharmacy First.

As self-care grows, payers push care closer to home, and consumers expect speed and convenience, the non-prescription side of the pharmacy isn’t ancillary—it’s the growth engine.