Pharmacies play an instrumental role in the evolving health care continuum, and COVID-19 has further underscored the need for

Deborah Weinswig

patients to have access to trusted care. According to the Centers for Disease Control and Prevention, 90% of Americans live within five miles of a community pharmacy, providing easy access for patients. During the pandemic, pharmacists have been among the health care providers on the front lines of testing and vaccination efforts, pushing pharmacies to examine how they can better meet new demands and increase efficiency, such as by accelerating their adoption of in-store and centralized automation solutions.

Centralized fulfillment

Over half of U.S. adults take at least one prescription drug, and that number is understandably higher among older people, according to a poll conducted by nonprofit organization KFF in May 2021 — underscoring the scale of the demand for prescription services. Centralized prescription-filling operations support pharmacists in filling high volumes of prescriptions while taking on new duties. Prescriptions are assembled and verified at a central location, from which they are delivered to pharmacies or mailed directly to the patient. This reduces drug inventory carrying costs for pharmacies and relieves work for pharmacists, enabling them to focus on other services and frontline patient care: Pharmacy automation tech provider iA stated that technology and centralization can free up over 60% of pharmacists’ time to focus on frontline patient services. In automated centralized fulfillment, a high-speed robotic system and remote visioning and verification technologies reduce medication-dispensing errors, deliver prescriptions to patients more rapidly and improve operational efficiency.

Earlier in the year, Walgreens made a majority investment into iA to support its expansion and development of automation capabilities for the pharmacy industry, including a suite of software-driven pharmacy-automation solutions for the end-to-end prescription-filling process. Currently, the first two iA-operated micro-fulfillment centers in Dallas and Phoenix are supporting prescription fulfillment for 550 Walgreens pharmacies and will support around 1,000 locations over time. The company plans to roll out the next nine micro-fulfillment centers by the end of 2022. Walgreens stated that its micro-fulfillment model will increase the speed at which it can deliver packages to stores, to lockers for pickup and directly to customers’ homes.

In-store automation

In stores, retail pharmacies have been speeding up digital innovations that minimize in-person contact and maximize efficiency when customers pick up prescriptions — through services such as online ordering and curbside or drive-thru pickup. Automated pickup kiosks also simplify and streamline the prescription-pickup process for both patients and pharmacists. Once a prescription is filled by pharmacy staff, patients receive a notification (through a text or email) with their individual pickup code; they can then come to the pharmacy at their convenience to scan the code and pick up their prescription in a quick, contactless way.

According to automated service provider Bell and Howell, pharmacy staff waste up to 50% of their time searching the will-call bins during prescription retrieval. With an automated locker, pharmacists can preload prescriptions ahead of time and focus more on clinical activities to enhance the patient experience. Consumers also benefit from decreased wait times, which could improve their overall satisfaction. Research conducted by UC (University of California) Irvine and UC San Diego found that patients using an automated kiosk in one pharmacy picked up an additional 400 prescriptions per year. As pharmacies lose money when a prescription is filled but not picked up by patients, an automated kiosk could result in cost savings for a pharmacy of $12,000 annually, according to the researchers.

Automation is also used behind the pharmacy counter to reduce drug dispensing errors and improve productivity. Robotic systems leverage barcode-reading technology to facilitate prescription fulfillment and automate the pill storage, counting and dispensing process. In addition, according to technology company KNAPP, its automated robotic storage and retrieval system requires roughly 60% less space for medication storage behind the counter than typical storage systems, creating space for pharmacies to expand more value-added and profitable offerings for patients. Coresight Research expects the adoption of robotic automation to continue, with such systems increasingly becoming more advanced and efficient.

Other supporting technologies

There are many other supporting technology solutions that help pharmacies to streamline work flows. Healthcare technology company Omnicell launched its EnlivenHealth division in October 2020. The platform offers engagement solutions and personalized communication tools to improve patients’ medication adherence and is deployed by almost 30,000 retail pharmacies in the U.S. today. EnlivenHealth’s Med Sync technology aligns prescription refills to a single date each month so pharmacists can consolidate all of a patient’s medications for them to pick up on one day, increasing pharmacy efficiency and providing convenience for consumers.

Amid the peak of the pandemic in 2020, EnlivenHealth unveiled its new CareScheduler solution, which automates scheduling, patient communication and registration for COVID-19 vaccinations. CareScheduler eliminates the need for hard-copy forms and so minimizes the time that patients spend in the pharmacy, greatly lowering the risk of infection for patients and staff.

Pharmacies have evolved to become a health destination for patients, particularly in rural areas that have fewer health care providers. The pandemic has no doubt highlighted the vital role of retail pharmacies and created greater awareness of the need for technology solutions. We are seeing more tech innovators offer new products and services to alleviate some of the pressures related to manual tasks, allowing pharmacists to concentrate on more value-added patient care. In the near future, we expect more retail pharmacies to adopt automation and other technologies to meet increased customer expectations.

Additional technology solutions that are supporting pharmacies include LogicSource, a tech-enabled procurement business that helps businesses reduce their indirect spend, or goods and service not-for-resale (GNFR), which can represent up to 20% of revenue for retailers. LogicSource emphasizes that, after a turbulent year that has reshaped retail, possibly forever, leaders have a mandate to respond in ways that can alleviate increasing pressure on their margins, launch cost-reduction procedures and ultimately drive savings to their bottom line.

LogicSource announced a multiyear agreement with Rite Aid in May 2020 to drive profit improvement by lowering operating and capital expenses for GNFR. Under the terms of the partnership, LogicSource is responsible for sourcing and managing over $1.4 billion of spend and will supply strategic sourcing expertise, market intelligence, spend analytics, scale leverage and better visibility into market cost. The partnership will allow the company to reinvest in the business, reduce debt, generate free cash flow and grow EBITDA.

Deborah Weinswig is founder and chief executive officer of Coresight Research. Additional research by Katy Cheng.