CVS to offer next-day delivery as Amazon considers entering market

CVS will begin offering free same-day delivery of drugs in Manhattan on Dec. 4. / Getty Images / Spencer Platt

CVS said Monday it would start next-day delivery from its stores in 2018, a move some analysts saw as a response to Amazon’s potential entry into prescription drug sales.

Shares of drugstore businesses have been under pressure because of fears that Amazon will use its vast ecommerce platform to disrupt the pharmaceutical supply chain.

“We will bring the pharmacy to our patients’ doorsteps, with nationwide next-day delivery from our stores,” CVS Chief Executive Larry Merlo said on a conference call with analysts.

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The pharmaceutical chain, which also reported better-than-expected quarterly profit on Monday, said it would offer same-day delivery in select metro areas and free same-day delivery for drugs in Manhattan starting Dec. 4.

The company said it was open to working with Amazon, adding that it would never close the door on any type of partnership.

Some analysts saw CVS’s plan as a defensive move.

“I think CVS also worries about Amazon’s potential future moves,” said Neil Saunders, an analyst with GlobalData Retail. “This is possibly a defensive strategy just to make sure that CVS is in a position to respond when that happens.”

While prescription drug delivery might be a fledgling concept in some parts of the country, in New York City it’ is nothing new.

Capsule, a pharmaceutical delivery start-up, launched in May 2016 and offers free delivery anywhere in the five boroughs.

Pharmacies in Manhattan also have been delivering prescription drugs to customers for decades, whether it be to their home or office.

David Lerman, manager of Carnegie Hill Pharmacy in Midtown, said Carnegie Hill Pharmacy has offered delivery services throughout Manhattan since they opened in 2001.

“Most independents have been doing it for years,” Lerman said. “It’s not easy, but you provide better service to your customers.”

Navigating building security and doormen are among the aspects that make prescription drug delivery in the city complicated, Lerman said. Without being personally familiar with the customer and their living situation, successfully delivering sensitive prescription drugs could get hairy.

“People who use independents, they want a mom-and-pop organization, they want to be called by their first name,” he said. “You literally have to know your customer, and that’s something chains will never be able to do. It’s going to be a disaster for them.”

CVS’ shares fell as much as 4 percent in early trading, before paring some losses to trade down 2.7 percent.

With Colter Hettich