In February 2024, a single cyberattack brought a massive portion of the U.S. healthcare system to a standstill—and left millions of pharmacists wondering not only how they’d adapt to the fallout but how they’d handle future incidents.
Nearly 1 in 3 Americans—some 200 million people—were affected by the Change Healthcare outage, making it what APhA President and CEO Rick Pollack called “the most significant and consequential incident of its kind against the U.S. healthcare system in history.”
In the weeks, months, and years after the outage, one thing has become clear: the real issue wasn’t just Change Healthcare (now Optum)'s proprietary technology. It was the system it sat inside.
If a single outage from a single company could bring the nation’s claim system to its knees, something in the underlying infrastructure was fundamentally broken.
Now, more than two years later, it’s up to pharmacies (and the technology partners that support them) to find a way to rebuild that foundation.
For pharmacists and patients alike, the pharmacy switch—once shrouded in mystery—suddenly became top of mind in a nationwide conversation about security, reliability, and the future of pharmacy technology.
At its simplest, a switch acts like an air-traffic controller for pharmacies.
Every time you process a prescription, the switch reads the BIN/PCN information, determines which payer the claim should go to, and routes it there in real time. Within seconds, it returns eligibility, formulary updates, and the patient’s copay.
This process happens thousands of times a day in a single store and millions of times across the country. When the system is healthy, it’s seamless. Patients get their scripts. Pharmacies get their reimbursements. Workflow continues as normal.
And because the switch hums along behind the scenes, many pharmacies never evaluate it in the same way they evaluate other pieces of pharmacy technology, like their PMS, POS, or any other part of their tech stack.
In other words, the pharmacy switch isn’t treated like critical infrastructure—that is, until it fails.
As we saw in the 2024 outing, when a switch fails (even briefly), pharmacies feel the effects almost immediately:
You can have the best PMS, inventory system, or clinical tools on the market, but none of it matters if the switch can’t move a claim across the finish line.
In other words, the switch creates a domino effect: When it goes down, the pharmacy goes down with it.
On the surface, the Change Healthcare switch failed because of a ransomware attack that exploited a missing multi‑factor authentication safeguard on an aging system.
But in all reality, that switch didn’t break on its own. It broke because it was part of an ecosystem that had been unstable for years.
Change Healthcare simply exposed what had been there all along.
When we consider the 2024 outage as a systemic issue, the question isn’t “Why did that switch fail?” so much as “Why did one failure ripple across the entire industry?”
The answer lives in the infrastructure underneath it.
Much of the infrastructure that routes, adjudicates, and processes pharmacy claims was designed decades ago.
While they may have been industry-standard at the time, very few have evolved with time to maintain those same standards.
Older switches were built for:
Today’s pharmacies, though, operate in environments defined by:
In other words, older infrastructure simply hasn’t kept up with pharmacy’s needs.
Right now, only three major switches handle the overwhelming majority of U.S. pharmacy transactions:
This concentration alone is notable, but what makes it especially risky is that two of the three switches (Optum, CoverMyMeds) are owned by vertically integrated giants that also control PBMs, payers, and wholesalers.
Among other things, consolidation has led to greater dependency on a shrinking pool of vendors, limited transparency, and most importantly, systemic fragility.
When a single vendor controls a major portion of claims infrastructure, any disruption—technical or otherwise—can send the whole industry crashing down.
For decades, the pharmacy ecosystem was designed to do one thing: move claims as quickly and cheaply as possible.
But if we learned anything in 2024, it’s that infrastructure built purely for efficiency often comes at the cost of stability.
Switches optimized for speed aren't made to withstand the widespread disruptions, cyberthreats, or the operational complexities pharmacies face every day.
Often, speed comes at the expense of safety and stability. Modern security measures either weren’t around or weren’t priorities during the early days of legacy systems.
What remained, then, was an all-too-fragile pharmacy infrastructure waiting to be exploited.
If pharmacy wants to stay proactive and avoid the disruptions of another major switch outage, it needs stronger infrastructure as its foundation.
Here’s what that actually looks like:
Pharmacies can’t afford technology built on 20- or 30-year-old foundations.
Modern infrastructure should be scalable enough to handle spikes in volume, flexible enough to adapt to changing payer requirements, and resilient enough to isolate failures rather than letting them spread across the system.
Cloud-native infrastructure enables all three. It distributes workloads, enables rapid scaling, and allows vendors to patch, deploy, and monitor systems.
For years, pharmacies operated with little insight into switch performance—but modern systems make insight a priority.
Real-time visibility means that PBM outages can be identified quickly, issues can be detected before pharmacies feel the impact, and pharmacies can have more transparency into the overall health of the system.
The breach showed that “good enough” security is, well, not good enough anymore. Security has to be built into the DNA of the system, especially when handling PHI and sensitive financial information.
Modern infrastructure must include:
When the same organization owns the PBM, the payer, the wholesaler, and the switch, choice is all but obsolete — and risks multiply.
Modern infrastructure should minimize conflicts of interest with unbiased routing, transparent operations, and above all, infrastructure decisions made in the pharmacy’s best interest.
This kind of transparency isn’t only good governance but a shield for systemic threats.
The Change Healthcare outage wasn’t an isolated incident but the breaking point in an already-faulty system strained by outdated technology, overworked infrastructure, and vertical consolidation.
And, in 2024, pharmacies paid the price.
For many, the outage was a necessary wake-up call that forced pharmacies to consider the parts of their operations that had been running on autopilot.
As they found out, the pharmacy switch isn’t a background system but a critical piece of infrastructure.
Luckily, pharmacies don’t need to overhaul their entire tech stack overnight.
Modern platforms—including RedSail’s independent switch, PowerLine—are already delivering the kind of cloud-native architecture, security, and redundancy that pharmacies need to keep themselves safe when the broader system is under stress.
The more pharmacies adopt infrastructure built for today’s challenges, the stronger and more stable the entire system becomes: for pharmacies, for patients, and for the industry as a whole.
To learn more about PowerLine and how it supports pharmacies as both a primary and secondary switch, click here.
