Retailers Put Pressure on Pharmacy Market with Same-Day Delivery Plans

The pharmacy industry, which has been grappling with a range of challenges over the past few years, is now facing additional pressure with the launch of same-day medication delivery by the nation’s two largest retailers.

Earlier this week, Walmart announced plans to offer same-day medication delivery across starting early in 2025. The company will leverage its 4,600 outlets containing pharmacies to send out prescription drugs, according to the Financial Times. The announcement followed news earlier this month that Amazon is expanding its same-day medication delivery to nearly half of the US population by the end of next year. It plans to add pharmacy services sites in 20 cities, including Philadelphia, Dallas and San Diego.

Amazon said its same-day service would mean an order received by 4 p.m. would arrive by 10 p.m. In Walmart’s case, prescription delivery times could be as short as half an hour.

The $621 billion pharmacy market is an attractive target for retailers that already deliver groceries and other goods to consumers who may favor a one-stop shopping experience. But the announcements are likely to impact drugstore chains like CVS and Walgreens, which have been dealing with increasing losses, falling share prices and executive turnover in the past year. Walgreens announced plans to close 1,200 stores over the next few years.

Another large drugstore chain, Rite-Aid, went through bankruptcy reorganization last year. Online pharmacies could also be impacted, Emarketer senior analyst for digital health Rajiv Leventhal said in an interview with Financial Times.

Concerns about consumer access to in-house pharmacies as well as the potential for “pharmacy deserts” to emerge are among the Federal Trade Commission’s objections to Kroger’s $24.6 billion takeover of Albertson’s, the article noted. Amazon, which opened its online pharmacy in 2020 and began same-day delivery last year in a few markets, has said its digital-first pharmacies will fill potential gaps.

Both CVS and Walgreens offer same-day delivery with restrictions. Mail-order pharmacy services are growing in popularity but are better suited for recurring prescriptions.

Amazon’s pharmacy growth strategy relies on the development of modular pharmacies of varying sizes positioned within larger Amazon Same-Day Delivery sites. This will allow Amazon clinical teams to manage the prescription review and packaging process and then tap into Amazon’s delivery network and logistics capabilities.