CVS Health aims to fight off Amazon with a next-day delivery prescription service

With recent news that tech-giant Amazon has won regulatory approval to become a wholesale pharmaceutical distributor in a number of US states, the pharmaceutical industry is looking at new ways to cater for its customers and provide not only competitive pricing, but exceptional service delivery across the board to fight off larger competitors.

CVS Health has recently announced that it is set to launch a new ‘next-day delivery’ prescription service, but is set to roll out its ‘same day’ delivery service next month in Manhattan. The move will see it cater towards the increased customer demand for services which are flexible, personalised and can be fitted around their daily routines.

"Our goal is to meet the needs of all of our customers wherever, however and whenever they want," explained Helena Foulkes, Executive Vice President, CVS Health and President, CVS Pharmacy.

"Providing same and next-day options for delivery of medications is just another way we can help our patients get and stay healthy."

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However, Adam Fein, President of Pembroke Consulting has said: “The prospect of Amazon entering has motivated CVS to do something they probably should have done years ago. I think it also is a great signal that Amazon is not going to be able to walk into the pharmacy or pharmacy benefit management industry and immediately take it over.

There are many large, sophisticated, well-entrenched competitors who are going to defend their turf.”

With ambitions to provide the service from all its 9,700 locations by next year, CVS Health will expand its operations to Miami, Boston, Philadelphia, Washington and San Francisco in early 2018.

The company has also reportedly been in talks to merge with health insurance company Aetna in order to strengthen its position within the healthcare market and fight off increased pressures, both in terms of new competitors and aggressive pricing structures.

The deal could therefore see CVS Health negotiate better pricing with drug manufacturers, as well as face added complexities surrounding the impact the Trump Administration is currently having on the industry at large. Additionally, CVS Health has recently sold off its RxCrossroads division to McKesson for $735mn, a clear move which sees the company streamlining its services to cater for future growth in areas of potential.