Walgreens doubles down on robots to fill prescriptions amid turnaround

As struggling drugstore chains work to regain their footing, Walgreens is doubling down on automation. 

The corporate is increasing the variety of retail shops served by its micro-fulfillment facilities, which use robots to fill hundreds of prescriptions for sufferers who take medicines to handle or deal with diabetes, hypertension and different situations. 

Walgreens goals to unlock time for pharmacy workers, lowering their routine duties and eliminating stock waste. Fewer prescription fills would enable workers to work together immediately with sufferers and carry out extra medical companies reminiscent of vaccinations and testing.

Walgreens first rolled out the robot-powered facilities in 2021, however paused growth in 2023 to give attention to gathering suggestions and bettering efficiency at present websites. After greater than a yr of constructing upgrades, together with new inside instruments, the corporate mentioned it is able to increase the attain of that expertise once more.

Walgreens advised CNBC it hopes to have its 11 micro-fulfillment facilities serve greater than 5,000 shops by the tip of the yr, up from 4,800 in February and 4,300 in October 2023. As of February, the facilities dealt with 40% of the prescription quantity on common at supported pharmacies, in line with Walgreens. 

That interprets to round 16 million prescriptions crammed every month throughout the totally different websites, the corporate mentioned. 

The renewed automation push comes as Walgreens prepares to go personal in a roughly $10 billion take care of Sycamore Companions, anticipated to shut by the tip of the yr. 

The deal would cap a turbulent chapter for Walgreens as a public firm, marked by a rocky transition out of the pandemic, declining pharmacy reimbursement charges, weaker shopper spending and fierce competitors from CVS Well being, Amazon and different retail giants.

Like CVS, Walgreens has shifted from opening new shops to closing a whole lot of underperforming areas to shore up earnings. Each corporations are racing to remain related as on-line retailers lure away clients and sufferers more and more go for quick dwelling supply over conventional pharmacy visits.

The modifications additionally observe mounting discontent amongst pharmacy workers: In 2023, nationwide walkouts spotlighted burnout and continual understaffing, forcing chains to reexamine their operational fashions.

Walgreens mentioned the funding in robotic pharmacy fills is already paying off.

To this point, micro-fulfillment facilities have generated roughly $500 million in financial savings by reducing extra stock and boosting effectivity, mentioned Kayla Heffington, Walgreens’ pharmacy working mannequin vice chairman. Heffington added that shops utilizing the services are administering 40% extra vaccines than people who aren’t. 

“Proper now, they’re the spine to essentially assist us offset a few of the workload in our shops, to clearly enable extra time for our pharmacists and technicians to spend time with sufferers,” mentioned Rick Gates, Walgreens’ chief pharmacy officer.

“It offers us much more flexibility to convey down prices, to extend the care and improve pace to remedy – all these issues,” he mentioned. 

Gates added that the facilities give Walgreens a aggressive benefit as a result of unbiased pharmacies and a few rivals haven’t got centralized assist for his or her shops. Nonetheless, Walmart, Albertsons and Kroger have equally examined or are at present utilizing their very own micro-fulfillment services to dispense grocery objects and different prescriptions. 

Micro-fulfillment facilities include their very own dangers, reminiscent of a heavy reliance on subtle robotics that may trigger disruptions if errors happen. However the services have gotten a everlasting fixture in retail because of the value financial savings they provide and their potential to streamline workflows, scale back the burden on workers and ship items to clients sooner.

When a Walgreens retail pharmacy receives a prescription, the system determines whether or not it must be crammed at that location or routed to a close-by micro-fulfillment heart. Upkeep medicines, or prescribed drugs taken frequently to handle continual well being situations, and refills that do not require speedy pickup are sometimes despatched to micro-fulfillment.

On the core of every facility is a extremely automated system that makes use of robotics, conveyor belts and barcode scanners, amongst different instruments, to fill prescriptions. The operations are supported by a group of pharmacists pharmacy technicians and different professionals.

As a substitute of workers members filling prescriptions by hand at shops, capsule bottles transfer by means of an automatic and thoroughly choreographed meeting line. 

Pharmacy technicians fill canisters with medicines for robotic pods to dispense, and pharmacists confirm these canisters to ensure they’re correct. Yellow robotic arms seize a labeled prescription vial and maintain it as much as a canister, which exactly dispenses the particular remedy for that bottle.

Sure prescriptions are crammed at separate handbook stations, together with inhalers and contraception capsule packs. Every prescription is then sorted and packaged for supply again to retail pharmacy areas for last pickup.

There are different safety and security measures all through the method, mentioned Ahlam Antar, registered group supervisor of a micro-fulfillment heart in Mansfield, Massachusetts. 

For instance, the robotic pods mechanically lock and sign an error with a red-orange mild if a employee attaches a canister to the unsuitable dispenser, stopping the inaccurate capsules from getting in a prescription, she mentioned. 

Correctly coaching employees on the facilities to make sure accuracy and affected person security can also be essential, in line with Sarah Gonsalves, a senior licensed pharmacy technician on the Mansfield website. 

She mentioned a core a part of her function is to guarantee that technicians can accurately carry out the totally different duties within the course of. 

Antar, who has labored on the Mansfield website since its 2022 opening, mentioned Walgreens has made enhancements to the micro-fulfillment course of after contemplating suggestions from shops and sufferers through the paused growth. That features establishing new roles wanted to assist the method on the websites, reminiscent of a coaching supervisor for all 11 areas. 

The services additionally plan to transition to utilizing smaller prescription vials after listening to issues that the present bottles are too massive, in line with a Walgreens spokesperson. They mentioned that may enable the facilities to ship extra prescriptions per order and scale back prices.

Heffington mentioned the automated areas have helped scale back Walgreens’ general prescription success prices by practically 13% in comparison with a yr in the past. 

She mentioned Walgreens has additionally elevated prescription quantity by 126% year-over-year, now filling greater than 170 million prescriptions yearly. The corporate hopes to boost that quantity to 180 million or much more. 

Heffington added that Walgreens carried out new inside instruments to trace the work throughout all 11 facilities and supply real-time knowledge on the place a affected person’s prescription is within the micro-fulfillment course of. 

“If a affected person known as the shop and mentioned, ‘Hey, are you able to inform me the place my prescription is in the present day?’ [Workers] can do this with nice specificity,” because of the brand new instruments, Heffington mentioned. 

Regardless of the corporate’s progress, Gates mentioned there’s extra work to be performed with micro-fulfillment facilities. 

For instance, he pointed to the potential of transport prescriptions on to sufferers’ doorsteps as a substitute of placing that burden on retail shops. 

“It is solely the 1st step proper now,” he mentioned. 

Different enhancements should be wanted at services, in line with some studies. For instance, WRAL Information reported in April that some clients at a Walgreens retailer in Garner, North Carolina, say they’re solely getting partial prescription fills, with a number of capsules lacking, or their drugs is being delayed.

Earlier than Brian Gange’s Arizona retailer began counting on an automatic facility, he walked into the pharmacy each morning figuring out {that a} large record of prescriptions was in his work queue ready to be crammed for the day. 

Now, with assist from micro-fulfillment, that record is considerably smaller every day, in line with Gange. 

“We do not have to spend as a lot time on simply these repetitive success duties,” he advised CNBC. “It actually takes an enormous weight off our shoulders.” 

Gange mentioned that provides him and his group time to step behind the pharmacy counter and work together with clients face-to-face, answering questions, offering recommendation, performing well being assessments or administering vaccines. 

That form of consideration could make all of the distinction for a affected person.  

For instance, Gange remembers stepping away for 5 minutes to take a affected person’s blood strain regardless of being overwhelmed with duties whereas working at a unique Walgreens location a number of years in the past. He ended up sending that individual to the emergency room as a result of their blood strain was “off the charts.” 

That affected person’s spouse visited the pharmacy the subsequent day to thank Gange, saying her husband “in all probability would not be right here with us in the present day” with out that blood strain check. 

“I should not should query whether or not I’ve that 5 or 10 minutes to test a blood strain for a affected person,” Gange mentioned. “Micro-fulfillment and centralized companies are actually what are going to permit us to have the ability to do this, to have that point.” 

“That actually permits us to supply higher look after them,” he added.