Will Plans to Start Rx Deliveries Affect CVS’s Retail Clinics Strategy?

Amazon’s apparent plans to get into the pharmaceutical distribution business—the online retailer has already gotten permits that would pave the way in several states—may have pushed CVS to announce plans to start delivering medications the same day they’re prescribed in certain cities, and next-day everywhere early in 2018. The irony is that CVS has sunk untold resources into its retail clinic business, based on drawing more customers into their brick-and-mortar locations. This begs the question of whether they’ll be cannibalizing their own business. The drugstore chain is among many to try to tackle on-site healthcare delivery, essentially working to take a bite out of urgent care’s niche by promoting their ability to treat low-acuity complaints on site, with the presumed advantage of both writing and filling prescriptions in the same visit. Recent financials question how much that strategy has helped, anyway, at least in CVS’s case: retail sales dropped 2.7% in the period ending September 30, while revenue from its pharmacy benefits manager arm grew 8.1% for the quarter.