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Walmart and Amazon are promising same-day deliveries in the $600bn US prescription medicines market, putting new pressure on drugstores and supermarkets that compete against the nation’s two largest retailers.
Retail giant Walmart on Tuesday said it would launch same-day delivery nationwide by the end of January, sending out prescription drugs from its almost 4,600 outlets containing pharmacies. The company says 90 per cent of the US population lives within 10 miles of its stores.
The move follows almost two weeks after Amazon announced it would expand same-day medications delivery to 45 per cent of US customers by the end of 2025 as it adds pharmacy service sites in 20 more cities in the US, including Philadelphia, Dallas and San Diego.
Their initiatives come amid upheaval in the US pharmacy industry, where revenues from dispensing prescriptions totalled $621bn in 2023, excluding Covid-19 vaccines, according to the Drug Channels Institute.
CVS, the owner of the largest US drugstore chain, replaced chief executive Karen Lynch with David Joyner last week as it struggles with challenges, including retail competition. Its shares have fallen 28 per cent this year.
Walgreens Boots Alliance, the second-largest pharmacy operator, plans to close 1,200 stores over the next few years as it battles ballooning losses and a 60 per cent fall in its stock this year. The Rite Aid chain went through bankruptcy reorganisation last year.
Shares of Walgreens declined 5 per cent on Tuesday morning, while CVS was down 1.7 per cent. Walmart was 0.7 per cent higher.
Meanwhile, the Federal Trade Commission has sued to block what would be the nation’s largest supermarket merger, Kroger’s $24.6bn takeover of Albertsons, arguing in part that it would diminish customer service at their in-house pharmacies.
There is also mounting concern about “pharmacy deserts”, or areas without a conveniently located drugstore. Even as it competes with brick-and-mortar pharmacies, Amazon has said its “digital-first” pharmacies would help fill such gaps.
Many independent pharmacies have long delivered medicines, sending drivers out to local customers, and both CVS and Walgreens offer same-day delivery with certain restrictions. Mail-order pharmacy is a growing industry, but deliveries take days and are typically reserved for recurring prescriptions.
Amazon opened its online pharmacy service in 2020. The ecommerce company began offering same-day delivery last year in several US cities, including its home base of Seattle, and moved into New York and Los Angeles earlier this year.
Hannah McClellan, vice-president of operations, product and technology at Amazon Pharmacy, told a press event earlier this month that the company’s pharmacies would be integrated into the same-day delivery network used for other Amazon products.
“Amazon Pharmacy is not a faster mail-order pharmacy that you have today. It’s not the online version of your neighbourhood drugstore,” she said.
Amazon says most of its pharmacy customers currently receive their medications in two days or less. Same-day deliveries in most cases would mean an order received by 4pm would arrive by 10pm.
Walmart said its same-day prescription drugs delivery will begin in six states immediately and reach 49 by the end of January, with delivery times as short as half an hour.
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