As the prospect of Amazon’s disruption of healthcare continues to makes waves in the industry, many stakeholders are looking to shore up their business by introducing Amazon-esque features and services.
Case in point is Walgreens launch of a nationwide service with FedEx for next-day prescription deliveries. Currently available in major markets including Dallas, Chicago and New York, the delivery service will be expanded to more markets in 2019.
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Patients who are signed up for alerts that notify them when their prescription is ready can now choose to have their medication delivered to their doorstep within a day for a $4.99 fee.
Next-day delivery is part of a wider initiative from the pharmacy chain called Walgreens Express meant to make filling prescriptions easier by allowing patients to preview their cost, prepay for eligible prescriptions and choose between home delivery or express pickup in store.
“This announcement expands Walgreens’ mail capabilities, an area where historically it has been less focused than other pharmacies due to its primarily retail base,” wrote Bank of America analysts in a research note.
The partnership also builds on the company’s existing relationship with FedEx which offers package pickup and drop-off services at Walgreens retails locations around the country.
A Deep-dive Into Specialty Pharma
A specialty drug is a class of prescription medications used to treat complex, chronic or rare medical conditions. Although this classification was originally intended to define the treatment of rare, also termed “orphan” diseases, affecting fewer than 200,000 people in the US, more recently, specialty drugs have emerged as the cornerstone of treatment for chronic and complex diseases such as cancer, autoimmune conditions, diabetes, hepatitis C, and HIV/AIDS.
“Next-day prescription home delivery is another convenience-driver, alongside our industry-leading number of extended hours pharmacies and one of the most downloaded digital apps in the category, designed to put care in the hands of our patients,” Richard Ashworth, Walgreens president of operations, said in a statement.
Walgreens roll out of its delivery services follows a similar move by CVS earlier this year to fend off the potential threat from Amazon’s acquisition of pharmacy startup of PillPack, which gave the e-commerce giant a ready made pathway to legally ship prescription medication nationwide.
CVS has also started to pilot a membership program reminiscent of Amazon Prime offering free one or two day delivery on most prescription medications and purchases, a discount on items under the CVS Health brand, access to a 24/7 pharmacist hotline and a $10 monthly store credit.
One other avenue that pharmacy companies are exploring to shield their business is increasing vertical integration, as evidenced by CVS Health’s $69 billion Aetna acquisition and reports about Walgreens and insurer Humana planning to take ownership stakes in each other.
Rita Numerof, the president of healthcare consultancy Numerof & Associates pointed to the partership between Walgreens and FedEx as one prime example where vertical integration can serve to boost both consumer choice and market competition.
“With emerging competition posing a threat, Walgreens was forced to step up to the plate, resulting in consumers from a variety of cities being able to get next-day and same-day deliveries of medications they need. It’s all about consumer choice based on real competition. This is the essence of a market-based model and why we need more in healthcare,” Numerof said.
Photo: Joe Raedle, Getty Images
