Dogfight for Disruption: Drone Drug Delivery

It’s a matter of time until drone delivery of prescription drugs becomes the norm.

The two largest major pharmacy retailers, CVS & Walgreens, have officially committed to drone delivery. Drone delivery of pharmaceuticals makes for an interesting concept simply because pharmacy items are typically very small and easy to transport. Luckily for CVS & Walgreens, a significant portion of the U.S. population lives within just a few miles of their stores – easing concerns about drone range. With prescription drug spending at an all-time high, the combination of value and revenue could easily allow for a sustainable service for consumers.

Because there is such a large potential for disruption, companies are quickly developing programs to keep up including traditional retailers, like Walgreens and CVS, online retailers, like Amazon, and venture-backed startups like Zipline and Flirtey.

Background on Drone Delivery

It was over 5 years ago when the Federal Aviation Administration (FAA) lost a landmark case, preventing them from regulating the commercial use of drones. Since then, the popularity of drones has exploded, commercially (e.g. professional photographers) and non-commercially (e.g. hobbyists).

Medical use of drones can usually be placed in one of three categories: Search & Rescue, Medical Care, and Transport/Delivery of Products (including pharmaceuticals).

Walgreens and CVS Take Their Fight to the Sky

In headlining news, Walgreens announced last week that they were officially the first U.S. retailer to provide on-demand drone delivery to customers. Walgreens teamed up with Wing Aviation (a Google/Alphabet company) and FedEx to execute the delivery. The delivery of a cough and cold pack, including Tylenol, Halls cough drops, tissues, Emergen-C, and bottled water, was made to a home in Christiansburg, VA as a part of the U.S. Department of Transportation’s Unmanned Aircraft Systems Integration Pilot Program. At this time, prescription drugs are not being included as an available item.

Likely in a move to compete with Amazon, Walgreens and FedEx have been expanding their relationship since 2017, when they began to place FedEx outlets within Walgreens stores for holding and shipping packages.

Not to be outdone, of course, CVS Health and UPS announced their plan to develop a prescription drug delivery service using UPS drones. UPS applied for certification of their drone subsidiary, Flight Forward, in July 2019. Just a few months before that in March, UPS initiated the first FAA-sanctioned use of a drone for routine revenue flights involving the transport of a product. The FAA approval was for a contractual delivery agreement in the United States at WakeMed’s flagship hospital and campus in Raleigh, N.C. In this program, the company delivers medical samples via unmanned drones, supplementing a ground courier service.