CVS to offer prescription, merchandise delivery service

This is an archived article and the information in the article may be outdated. Please look at the time stamp on the story to see when it was last updated.

NEW YORK — CVS will soon be offering next-day delivery of prescription drugs and merchandise, CEO Leary Merlo told USA Today on Monday.

While everyone will get to experience the delivery service, some lucky cities — Miami, Boston, Philadelphia, Washington D.C., and San Francisco — will get same-day delivery, he added.  CVS Pharmacy customers in Manhattan will be the first to test out the new service starting on December 4.

Other stores will begin following suit in 2018.

The announcement comes as rumors begin to swirl that CVS Health is in talks to acquire the health insurer Aetna for $66 billion. Both companies declined to comment on market “rumors.”

If the merger is approved and goes through, it would reshape the health care industry. CVS Health controls a massive drugstore chain and pharmacy benefits management system, while Aetna is one of the nation’s largest insurers.

But what’s behind the proposed merger? Some say it could be Amazon.

In recent months, there has been a drumbeat of reports about Amazon’s interest in selling prescription drugs as part of its bottomless ambition to offer every consumer product and service imaginable.

As analysts at Goldman Sachs put it in one investor note this summer, “Imagine a day when you can ask Alexa to have your Lipitor refill arrive at your doorstep in under two hours.”

It may sound like a stretch for a company that started as an online bookseller. But Amazon now owns the Whole Foods grocery chain and is testing its own corner stores. It also offers one-hour delivery in certain markets. That potentially puts it in a strong position to deliver prescription drugs online and offline.

On an earnings call in August, Merlo tried to play down the threat of Amazon as a competitor.

“There are many barriers to entry when you’re looking at pharmacy,” Merlo said on the call. “It’s highly regulated, so the barriers to entry are high.”

Amazon may be scaling those barriers, however. On Thursday, the St. Louis Post-Dispatch reported Amazon had gotten the green light for wholesale pharmacy licenses in at least a dozen states.

Amazon’s “speculated entry into the Drug Value Chain is becoming more real with wholesale pharmacy licenses,” Ana Gupte, an analyst at Leerink, a boutique investment firm focused on the health care industry, wrote in an investor note Thursday.

Gupte said Amazon posed “a massive threat to CVS” at a time when it’s struggling to get enough foot traffic into its stores.

Latest News

More News