Walgreens’ robot-powered pharmacy centers could help it rival Amazon, CVS

The news: Walgreens is opening 22 robot-powered pharmacy fulfillment centers across the US to fill customers’ prescriptions, per CNBC.

• By 2025, nearly half of the retail giant’s prescription volume could be filled by these automated hubs.
• Each robot can fill 300 prescriptions in 1 hour alone—the same amount a pharmacist or technician can complete in one day.

Why it matters: Retailers are finding it difficult to fill pharmacist and technician roles as droves of healthcare workers jump ship due to burnout.

Since pharmacists are stretched thin, it leads to more errors:

• About 88% of pharmacists say inadequate staffing likely contributed to medication errors or near misses in the past year, according to the 2022 National Pharmacy Workplace Survey of 4,482 US pharmacy personnel (most of which worked at a chain or supermarket pharmacy).
• Robot-powered pharmacy fulfillment centers could abate errors by taking over the repetitive task of filling medication bottles.

What this means: Walgreens’ automation play will help it keep up with Amazon Pharmacy, which is threatening to snap up some of its pharmacy customers.

Amazon’s PillPack already uses automation to fill its prescriptions and package pre-sorted doses to save on labor costs—but its threat doesn't stop at efficiency.

• Unlike retail pharmacy competitors, Amazon boasts convenience and transparent prices to reel in consumers. Amazon Prime’s Rx benefit card already offers Prime members up to 80% savings when paying for prescriptions without insurance, for instance.
• Walgreens’ new automation tech will help it keep up with one of Amazon’s key strengths: its speed.

What’s next? Despite the creeping threat of Amazon Pharmacy, CVS still remains Walgreens' largest competitor. Automating pharmacy tasks could help Walgreens pharmacists take a more active role in patient care to rival CVS’ growing retail clinic presence.

For context, CVS recently announced plans to close nearly 10% of its US locations and transform the remaining stores into primary-care offices with services like diagnostic testing, mental health services, and hearing exams.

• Walgreens has a similar strategy to attract patients, making the battle between the two retailers a fierce one: It plans to open up to 700 retail clinics in partnership with VillageMD by 2027, for instance.

Walgreens' automated prescription-filling robots will give it a competitive advantage over CVS, which has yet to automate its Rx processes. Pharmacists could spend less time filling prescription bottles and more time explaining side-effects and medication interactions to a customer after a clinic visit.