Warehouse club Costco is partnering with delivery firm Instacart to launch a prescription delivery pilot program in California and Washington, CNBC reported on Wednesday (Nov. 6).
The program offers one-hour, free delivery of prescriptions over $35 to Costco members at their home or office. For smaller priced orders, the delivery fee varies depending on how quickly customers need the medications but is typically under $10.
Instacart couriers are required to pass an online HIPAA certification course before they can deliver medications. They’ll pick up the orders in sealed, tamper-proof bags and won’t know which medications are inside. The courier will also ask customers for proof of identity to ensure they’re delivering to the right person.
Costco has retail pharmacies in many of its stores and is known for its bargain pricing. This is Instacart’s first foray into prescription deliveries, but the company has looked into it for years, a source told the news outlet.
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“Long term you could see many of the retailers take on this ecosystem,” said Emily Melton, managing partner at Threshold Ventures. “More competitive forces is good.”
The move gives Costco a competitive edge as companies like Walmart and Amazon move into the $300 billion prescription space. The service could also threaten bigger retail pharmacies like Walgreens and CVS.
Eric Pachman, president of 3 Axis Advisors, a research and consulting firm that specializes in the drug supply chain, told CNBC that retailers could “provide an alternative to the status quo in the current drug supply chain” by working with large-self-insured employers.
In other recent news, UPS and CVS partnered to deliver prescriptions by drone and completed their first flights on Nov. 1 to a CVS customer’s home and to a different customer in a nearby retirement community.
Both flights launched from a CVS store in Cary, N.C. and used the M2 drone system by UPS partner and drone systems developer Matternet.
UPS Flight Forward was certified in September and was the first firm recognized by the U.S. Federal Aviation Administration (FAA) to use drones under a Part 135 Standard certification, which is designated for package deliveries.