Walgreens is using automation to fill more of its customers’ prescriptions. Inside a Dallas-area facility, bright yellow robotic arms hold pill bottles up to dispensers, which release pills like a carefully calibrated vending machine.
Melissa Repko | CNBC
NORTHLAKE, Texas — Bright yellow robotic arms are becoming a bigger part of Walgreens’ workforce.
Inside a large Dallas-area facility, they fill thousands of prescriptions for customers taking medications to manage or treat high blood pressure, diabetes, or other conditions. Each robot can fill 300 prescriptions in an hour, the company said, about the same number a typical Walgreens pharmacy with a handful of employees can do in a day.
Walgreens Boots Alliance opens the automated and centralized hubs to keep pace with the rapidly changing pharmaceutical industry. The pandemic has heightened the pharmacy chain’s need to stay relevant as online pharmacies siphon off sales and more customers get deliveries of items ranging from toilet paper to toothpaste. The global health crisis has also increased the demand for pharmacists, as hospitals and pharmacies have hired them to administer Covid vaccines and tests.
This has forced Walgreens and its competitors, CVS Health and Rite Aid, to rethink the role of their stores and pharmacists.
Walgreens’ new CEO, former Starbucks COO Roz Brewer, wants to make health care the company’s “growth engine.” It acquired majority stakes in VillageMD, a primary care company, and iA, a pharmacy and healthcare automation technology company that helps it build the centralized centers. He is investigating a potential sale of his UK-based Boots business.
By 2025, up to half Walgreens’ prescription volume some stores could be filled at automated centers, said Rex Swords, who oversees the facilities as Walgreens Group president of centralized services, operations and planning.
This will free up more time for pharmacists to provide health care, Brewer said in an interview with CNBC’s Bertha Coombs.
“We’re doing all of this work, so the pharmacist has an easier job, so they can get back to the fore, build a relationship with that patient, and interact the way they were trained – the job they love. to do,” she said.
Pharmacists will continue to fill emergency medications and controlled substances at local stores as the company expands its use of robots.
Jefferies analyst Brian Tanquilut said automation could help Walgreens focus on ways to differentiate itself from online pharmacies like Amazon-owned PillPack and Capsule and CVS, which owns health insurer Aetna. and the Pharmaceutical Benefits Manager Caremark.
“This is a complementary measure to part of the health care strategy that they have defined,” he said.
CVS uses robotics to help fill prescriptions at its largest stores, but through a spokesperson, the company declined to say how much of its overall volume is filled by automation.
Walgreens will share its fiscal second quarter results on Thursday.
Pill bottles and capsules go through a choreographed and highly automated assembly line in the Dallas area. Walgreens is building similar micro-distribution centers across the country.
Melissa Repko | CNBC
A glimpse of the future
The Northlake Robotic Center, about 36 miles northwest of Dallas, offers a glimpse into the future of Walgreens. It is made up of 220 workers, including a handful of licensed pharmacists.
Every day, about 35,000 prescriptions are filled at Dallas-area facilities — but that number will eventually increase to 100,000 a day, Swords said.
Over the next three years, Walgreens plans to grow to a total of 22 facilities that serve more than 8,500 of the company’s nearly 9,000 stores. He opened two more near Phoenix and Memphis.
Instead of being filled by hand, pill boxes and caps go through a choreographed and highly automated assembly line.
Pill cans enter robotic pods at Walgreens’ automated facility in the Dallas area.
Melissa Repko | CNBC
A team of workers feeds containers of pills into robot pods. Each medicine has its own cartridge and its own pill counter. A yellow robotic arm grabs a labeled bottle of pills and holds it up to the cartridge, which dispenses pills like a carefully calibrated vending machine.
Then, before the pill bottle leaves the pod, it is covered with a cap.
At the Dallas facility, the robotic pods can dispense about 900 different drugs. Some common drugs are in multiple dispensers to cope with the workload.
Pill bottles circulate along the track. At a station, some are combined with a patient’s other medications or the rest of their 90-day medication supply. Scanners read barcodes, so printers can prepare documents and bags for customers to pick up later.
These prescriptions – now packed in a bag – are transported by Roomba-type rolling robots. The devices sort prescriptions and deposit them in plastic bins that head to the same pharmacy location.
A worker places filled and packaged prescriptions on rolling robots at Walgreens’ centralized facility in the Dallas area. The robots help sort prescriptions and drop them into plastic bins that head to the same pharmacy location.
Melissa Repko | CNBC
About 30% of the establishment’s prescriptions skip the automated assembly line, Swords said. Instead, workers manually prepare items like asthma inhalers, eye drops and temperature-controlled medication.
There are safety and security checks throughout the process, including pharmacists who check medications in canisters and pill bottles, electronic locks on robot pods that can detect and stop dispensing if a canister is in the wrong place, and zip ties on bins that carry filled prescriptions to stores.
Facilities aren’t fulfilling direct mail orders yet, but it’s on the program’s roadmap, Swords said.
More field pharmacists
AmeriSourceBergen Trucks Drive Over 500 Pick-Up Prescriptions pharmacies in most of Texas, parts of Arkansas and parts of Louisiana – a radius of approximately 400 miles. The same trucks also deliver bulk drugs to these pharmacies.
For customers, the move to automation would be hard to detect, other than slightly different packaging.
For Walgreens, the investment could mean cost savings and new revenue streams. Walgreens Chairman John Standley said at the company’s October Investor Day that micro-fulfillment centers will reduce the company’s working capital by $1.1 billion by 2025.
As more prescriptions are filled by robots, he said pharmacists can take on other tasks that Walgreens may charge insurers or customers, such as screening and treating medical conditions such as strep throat or the flu and writing prescriptions for those at risk of HIV.
For example, in a pilot program, pharmacists in Ohio counsel and manage the care of patients with asthma and chronic obstructive pulmonary disease.
Rick Fernandez, regional healthcare manager for Walgreens in the Dallas area, said the pandemic has underscored the value of pharmacists and how they can be used in smarter ways.
“It’s kind of boring filling in scripts all day,” he said. “What we were hearing was that pharmacy was more of an asset than people attributed to us.”
Jefferies’ Tanquilut said automation can reduce staffing requirements and turn pharmacists into more active medical providers. It’s unclear how this may play out – whether it will mean a smaller pharmacy staff or the same size or larger workforce, but with different roles. Another factor is state laws. Walgreens is urging state lawmakers to allow pharmacists to provide a longer list of health care services.
The challenge, he said, will be convincing customers and insurers to pay – rather than waiting for free advice.
“One of the key questions is ‘Do you get paid for these things? “”, Did he declare. “The idea or the hope is that over time there will be real reimbursement for them providing this service to patients.”
Join us for Healthy Returns on Wednesday, March 30 to hear from healthcare experts, including Roz Brewer, CEO of Walgreens Boots Alliance, discuss investing in healthcare technologies, the drug market, equity in health, wellness programs and more. Register here.