CVS's Prescription For Amazon Bug Includes Same-Day Rx Delivery

CVS Caremark will roll out free same-day prescription delivery service in Manhattan on December 4 and will extend it to its stores in Miami, Boston, Philadelphia, Washington, D.C., and San Francisco metro areas early next year. It intends to offer next-day delivery service to customers of all of its 9,700 stores by the end of 2018.

“We will bring the pharmacy to our patients’ doorsteps, with nationwide next-day delivery from our stores,” CVS CEO Larry Merlo said on a conference call with analysts yesterday afternoon that has been transcribed by Seeking Alpha. Merlo et al. were primarily discussing third-quarter results — up 3.5% on revenue of $46.18 billion — that beat analysts’ expectations.



“A CVS spokeswoman, Erin Pensa, said delivery fees outside of Manhattan will vary by location, and have not yet been made public. She also said the company’s delivery partner has not been announced, but ‘we’ve been able to use our scale to negotiate low-cost, affordable options for all CVS Pharmacy customers,’” Katie Thomas reports for the New York Times.

“Prescription medications and a curated selection of over-the-counter products will be delivered in ‘secure tamper-proof packaging right to customers’ doors to assure complete privacy,’” CVS said in a statement, Jasmine Heyward reports for

“Amazon's entrance into the pharmacy business has been widely predicted by Wall Street — although the company has given no indication of its plans. But Amazon is thought to pose the biggest near-term threat to retail pharmacies such as CVS, Walgreens Boots Alliance or Walmart,” writes Carolyn Y. Johnson for the Washington Post

“Amazon has won regulatory approval from multiple states to become a wholesale pharmaceutical distributor, including Nevada, Arizona, Idaho, Louisiana, North Dakota, Alabama, New Jersey, New Hampshire, Michigan, Connecticut, Tennessee and Oregon,” writes  Kirsten Korosec for Fortune.

Not that the Amazon dynamic is necessarily a bad thing: The Washington Post itself has thrived both financially and in breaking news under the ownership of Amazon founder Jeff Bezos by “focusing on readers first, not advertisers,” among other things. And its renewal is making its main competitor, the NYT, better, too. 

Competitors, including CVS, are well aware of its competitive presence, of course.

“The Woonsocket, Rhode Island-based company has been transforming itself into a health-care business for years, propelled by its acquisition of the Caremark pharmacy benefit manager platform in 2007,” observes Lauren Hirsch for

And it is reportedly in talks to acquire Hartford, Conn.-based Aetna Inc. for $66 billion — another move that is said to be partially driven by the encroachment of Amazon on its turf. 

“Merlo and other CVS executives did not address any of the Aetna chatter on the conference call,” Paul R. La Monica reports for CNN Money. “But if the rumors are true — and if an Aetna deal passed antitrust scrutiny — then CVS appears to be on its way towards building a formidable health care/retail giant that may avoid getting Amazon-ed.”

Indeed, “Merlo said during the call with analysts Monday that he still sees Amazon as more of a potential ally than threat,” LaMonica writes.

“You would never close the door on any type of partnership,” Merlo responded when asked about working with Amazon.

Not that CVS isn’t facing competition from other retailers for the sale of eyeliners, rubber bands and suntan lotion. 

“Sales of cosmetics and household goods, CVS’ ‘front of store’ business, meanwhile dropped 2.8%. CVS increasingly faces competition for these goods from big-box stores and grocers, sometimes for a lower price,” CNBC’s Hirsch writes. But it blamed the decline on the closure of many stores due to three hurricanes in the South during the quarter.

Spokeswoman Pensa “declined to say how the company would handle the logistics of packaging and shipping, but said it would be handled by ‘a national partner.’ Products will be shipped from local pharmacies, not from a warehouse,” reports Nathan Bomey for USA Today.

“Merlo said CVS has an advantage because 70% of Americans live within three miles of a CVS store. CVS Pharmacy President Helena Foulkes said next-day shipping has already been tested in 1,600 stores,” Bomey continues.

But an even larger percentage of Americans who fork over their yearly Amazon Prime fee live within striking distance of “free” two-day delivery. It will be an interesting marathon to watch.

Next story loading loading..