North Star Health Opened Three New Pharmacies
The health system's latest expansion offers a new model for operators to sustain primary care through pharmacy profit margins.
Updated on Sept. 23, 2026 in Healthcare
Live Poll
Do you support nonprofit health centers opening retail pharmacies to lower drug costs in your area?
Federally Qualified Health Center North Star Health opened three new pharmacies in Springfield, Londonderry, and Charlestown on September 22, 2026. This expansion aims to bolster local pharmaceutical access following the closure of 28 Vermont pharmacies between 2019 and 2024.
Why it matters
The model uses federal 340b pricing programs to secure drug discounts, leveraging retail margins to cross-subsidize primary care and behavioral health services. This strategy addresses the growing local pharmacy desert, exacerbated by the exit of commercial competitors like Smilin' Steve's Pharmacy.
North Star Health opened three new pharmacies to counter a state-wide trend where 28 Vermont pharmacies closed between 2019 and 2024. The initiative operates within a national market where three companies processed 80% of all prescription claims in 2025.
The players
North Star Health
A Federally Qualified Health Center operating a network of medical and behavioral health clinics across Vermont and New Hampshire.
Smilin' Steve's Pharmacy
A former commercial pharmacy provider that shuttered multiple regional locations in May 2026.
Vermont Board of Pharmacy
The state regulatory body responsible for monitoring pharmacy access and industry trends.
The details
North Star Health, a Federally Qualified Health Center, integrates pharmacy operations directly into its existing primary and behavioral health clinics. By utilizing the 340b drug pricing program, the system purchases medications at significant discounts, allowing it to recapture pharmacy profit margins that typically leave the local economy. This vertical integration follows the May 2026 departure of Smilin' Steve's Pharmacy, which left several communities with reduced access to medication.
Timeline
2019 to 2024: 28 pharmacies closed across Vermont.
2024: The Vermont Board of Pharmacy issued findings on regional access.
2025: Three companies handled 80% of national prescription claims.
May 2026: Smilin' Steve's Pharmacy exited Springfield, Ludlow, and Woodstock.
September 22, 2026: North Star Health held ribbon-cutting ceremonies for the new locations.
Market Landscape
North Star Health is leveraging the 340b drug pricing program to create a sustainable cross-subsidy model in regions abandoned by commercial retailers. This development signals a shift toward integrated care models as independent pharmacy chains continue to face national consolidation pressures.
Operators in primary care should monitor if this integrated model successfully mitigates the financial instability caused by the loss of local retail pharmacy access. Consider whether your own procurement of medical supplies could benefit from federal pricing initiatives similar to the 340b program.
The takeaway
The successful integration of pharmacy profit centers into primary care offers a tactical template for other health systems operating in pharmacy deserts. Operators should track the 340b eligibility requirements to determine if similar pharmaceutical margin recapture is a viable strategy for their facility's budget.
Further reading
For more on industry shifts, see Healthcare.
Source note: This article includes information reported by VTDigger.
Live Poll
Do you support nonprofit health centers opening retail pharmacies to lower drug costs in your area?
