Bringing Healthcare Home

The Current State of Prescription Delivery

Industry Status Report, June 2020

Welcome to the annual prescription delivery industry status report.

This year, we’re moving away from a definition of prescription delivery and towards an in-depth review of the delivery solutions available to pharmacies, health systems, and patients.

By the beginning of 2020, interest in prescription delivery was already on the rise. Industry experts had realized the positive impact home delivery could have on medication adherence and, subsequently, overall healthcare spend. Patients, used to speedy home delivery thanks to online retailers like Amazon, were wondering why pharmacies weren’t following suit.

Then COVID-19 spread across the globe. The pandemic and movement restrictions that followed have caused an unprecedented spike in prescription deliveries.

As a result, both patients and industry leaders are seeking information on delivery. But understanding the options—whether you are a pharmacist, provider, or patient—can be difficult. We’ve created this report for that reason.

Some sections will be more relevant to healthcare professionals or business decision makers and others to patients, but overall this report is meant to provide a clear, candid picture of the current prescription delivery landscape and how it can benefit you.

A third-party, nationwide delivery solution saw a substantial increase in volume over the past six months.
ScriptDrop Data, 2020.

Delivery: A Necessity, Not a Luxury

As the COVID-19 virus spread across the country, it became clear that prescription delivery was not only desirable but necessary for good public health.

In general, states allowed people free reign to shop for groceries and medicine throughout the pandemic. However, as more people of all age and risk groups began to contract the virus and more states shut down non-essential businesses, more patients sought out delivery to reduce their exposure to contagion.

As a result, prescription delivery has become a key predictor of medication access in 2020. Delivery can be the difference between a patient adhering to their drug regimen and giving up on it altogether. Of course, this has always been the case; as we will detail elsewhere in this report, many patient demographics have needed delivery all along and will continue to benefit from it going forward.

Delivery solutions can also help independent pharmacies stay competitive in a complex market.1 While online pharmacies continue to flood the pharmacy landscape and tout home delivery, the majority only offer shipping. Patients have to wait between 3-14 days to receive their medications. In a McKinsey & Company poll, 46% of respondents abandoned online shopping carts due to “too long” shipping times.2 Offering a more robust set of service levels can improve a business’s standing in the market.3

Patients Need Delivery Now

Pharmacies Stand to Benefit

Home Delivery Impacts Patients

Even in a post-pandemic world, some may continue to believe home prescription delivery is merely a “nice to have,” or only necessary for older adults with limited mobility. On the contrary: all manner of patients can benefit from a reliable delivery solution. As healthcare trends towards a greater reliance on telehealth and as the Baby Boomer population ages, delivery will only increase in importance.

Telehealth Patients

When patients lack access to traditional healthcare, telehealth can bridge the gap. Sending patients to a pharmacy to pick up their prescriptions after a telehealth consultation interrupts the continuity of care. 25% of patient consultations during the pandemic were telehealth visits.4

Older Adults

By 2034, the number of people 65 years of age and over will outnumber people 18 years of age and younger.5 This shift will invariably affect the healthcare landscape. Adults over 65 years of age are more likely to take multiple maintenance medications.6 Staying adherent to those medications is key to older adults’ continued health, but pharmacy access is a significant obstacle for them. 59% of patients receiving delivery from an in-workflow solution are 60 years of age or older.7

Caregivers

Whether a professional or a family member, every caregiver can benefit from getting their patient’s medication delivered. Delivery can give them time back for patient care. Prior to the pandemic, 30% of an in-workflow solutions's deliveries were signed for by a caregiver. (During the pandemic, signatures were suspended for contactless delivery.)8

People with certain life circumstances

Not all patients have the means to reach the pharmacy. Working long hours, living too far away from a pharmacy, lacking a car or reliable public transportation, or simply being busy with children, school, or work could keep a patient from picking up their prescription on time.9

Specific disease states or conditions

In 2014, 42% of Americans had not one but multiple chronic conditions.10 Many chronic conditions are controlled with daily medications; without them, patients risk a relapse of their symptoms or even death. People with one or two chronic conditions average 9 prescription fills per year, and people with three or four conditions average 24 fills per year.11 That equals a lot of visits to the pharmacy.

Unfortunately, a great number of chronic conditions present physical or mental obstacles that make a run to the pharmacy nearly impossible. Some chronic illnesses cause fatigue, pain, balance issues, or shortness of breath. Others affect a patient’s mood or cause feelings of shame which could make the patient afraid to interact with pharmacy staff.

Common Disease States

These charts depict some of the most common disease states in the United States and percentage of the adult population diagnosed with them. Also listed are the most commonly-prescribed maintenance medications (generic and brand names) for these diseases.

9.7%

Anxiety Disorderse.g. anxiety, panic disorders

  • Alprazolam
    Xanax
  • Citalopram
    Celexa
  • Duloxetine
    Cymbalta
  • Escitalopram
    Lexapro
11.9%

Mood Disorderse.g. depression, bipolar disorder

  • Citalopram
    Celexa
  • Escitalopram
    Lexapro
  • Duloxetine
    Cymbalta
  • Aripiprazole
    Abilify
  • Fluoxetine
    Prozac
  • Sertraline
    Zoloft
27%

High Blood Pressure

  • Amlodipine
    Norvasc
  • Lisinopril
    Prinivil Zestril
  • Losartan
    Cozaar
21.6%

High Cholesterol

  • Atorvastatin
    Lipitor
  • Ezetimibe
    Zetia
25%

GERD, stomach ulcers, and heartburn

  • Omeprazole
    Prilosec Zegerid
10.4%

Diabetes Mellitus

  • Insulin
    Lantus SoloStar NovoLog FlexPen
  • Metformin
    Glucophage
  • Sitagliptin
    Januvia
6.3%

Asthma

  • Albuterol
    ProAir HFA Ventolin HFA Proventil HFA
  • Tiotropium
    Spiriva
  • Fluticasone
    Advair Diskus
6%

COPD

  • Albuterol
    ProAir HFA Ventolin HFA Proventil HFA
  • Tiotropium
    Spiriva
  • Fluticasone
    Advair Diskus
1%

Epilepsy

  • Gabapentin
    Neurontin Gralise
<1%

Hypothyroidism

  • Levothyroxine
    Synthroid

Defining the Options

If you’ve determined that prescription delivery can benefit your business or your own health, you first need to know your options.

Companies have approached home delivery from both the patient side and pharmacy side. Patients can seek out delivery on their own, or can ask their pharmacy whether they offer the service.

Pharmacies or health systems can develop their own solution—some small pharmacies simply hire a part-time driver—but partnering with a third party comes with useful benefits. Even businesses with an existing delivery solution may wish to explore their options in order to increase volume and save valuable time.

Pharmacy Solutions

Courier/Logistics Partners

These third-party delivery experts generally partner with pharmacies to provide delivery services, but may be available to patients as well. Note that these companies generally are not health-specific.

In-Workflow

These third-party solutions integrate with pharmacy software systems. They allow pharmacists to move seamlessly from dispensing to delivery, saving pharmacists up to 20 seconds per prescription fill.

In-workflow solutions that capture delivery status, copay information, and the patient’s signature are particularly useful in the event of an audit.

Patient Solutions

Volunteer Couriers

Volunteers can be a temporary solution for both pharmacies and patients. During the pandemic, local law enforcement and other organizations have acted as couriers in many communities. These services generally have only been available to patients 65+ or for a limited time.

Brick & Mortar + Shipping/Courier

Chain pharmacies often rely on ground shipping services to deliver medications. They may contract with courier/logistics partners for urgent deliveries, for which the patient pays an additional fee.

Brick & Mortar + In-House

Both major chains and independent pharmacies may employ their own in-house delivery drivers. In some cases, pharmacy staff act as delivery drivers in order to perform wellness checks, medication therapy management, or other services at patients’ homes.

PBM Mail-Order

Large-scale pharmacy benefit managers (PBMs) often have their own automated mail-order pharmacies, and encourage patients with maintenance medications to use them by offering 90-day fills and reduced prices. Only patients with prescription coverage through the PBM can use their mail-order service.

E-Commerce Platform

These online pharmacies offer lower prices alongside free shipping. Not all e-pharmacies accept insurance. Some offer telehealth services: patients have a brief online consultation with a doctor or nurse practitioner and, if prescribed a medication, can have it filled and delivered by the online pharmacy.

Patient-Initiated Third Party

In many cases these third-party solutions will pass the patient’s prescription to a partner pharmacy for dispensing and delivery. Some provide delivery services to their partner pharmacies; others simply act as middlemen. More rare are pharmacy-agnostic solutions that will work with the patient’s chosen store and provide the delivery for that store.

Delivery Solution Essentials

For business owners, consider the elements most important to your store and patients to help you choose an appropriate delivery solution.

Top 5 features pharmacies want in a delivery solution

  1. In-workflow option
  2. Multiple service levels: on-demand delivery, same-day delivery, shipping
  3. On-time delivery
  4. Low overhead
  5. Responsive, reliable customer support

Source: ScriptDrop Research, 2020

  • In-workflow option

    Delivery solutions that integrate with a pharmacy’s software can save time and effort for staff, streamline data storage, and provide more features than web portals.

  • Digital capture of signatures and copay information

    Paperless signature capture and storage are useful in the case of an audit. Digital capture also reduces the need for drivers to return sensitive patient data to the pharmacy.

  • Package tracking

    Tracking provides peace of mind for pharmacy staff and patients.

  • Patient delivery notifications

    Patients want to know when they can expect a delivery, especially if their medication is expensive or temperature-sensitive.

  • On-demand delivery

    On-demand delivery can make your pharmacy more attractive to current and new patients.

  • Same-day/next-day delivery

    Patients have come to expect delivery within one or two days. Offering quick delivery can be a major differentiator for pharmacies competing with retailers that only offer shipping.

  • Shipping

    Shipping is affordable, useful for refills, and helps pharmacies attract and retain patients who live too far away for on-demand or same-day delivery.

  • Privacy and security measures (tamper-evident packaging, etc.)

    Any legitimate delivery solution should ensure that patients’ health information is protected.

  • Nationwide courier network with redundancy and flexibility in key regions

    Many delivery solutions are very geographically limited, meaning that many pharmacies and patients will not benefit from their services. A nationwide network ensures widespread benefit and timely delivery.

A Snapshot of Delivery Providers

Even within the aforementioned categories there is a great deal of variety. Not all e-commerce platforms are the same; not every solution provides the same level of integration. Comparing the options is essential before choosing a solution.

A Closer Look

Please note that the following chart is meant to be a snapshot of the prescription delivery landscape during a specific timeframe and is subject to change. The COVID-19 pandemic has led to significant but temporary changes in some businesses’ delivery services.

A B C D
1
 Capabilities Deliv Rx Dropoff Delivery Roadie Delivery
2
 Delivery request initated by
3
 Pharmacy Pharmacy Pharmacy or patient
4
 Access
5
 Web portal Yes Yes Yes
6
 API available Yes Yes Yes
7
 Mobile app No No Yes
8
 Dedicated customer support team No Yes Yes
9
 Price of delivery
10
 Cost dependent on pharmacy Cost dependent on pharmacy Cost dependent on pharmacy
11
 Service levels available
12
 Same-day On-demand, same-day On-demand, same-day
13
 Pharmacy choice
14
 Any partner pharmacy Any partner pharmacy Any partner pharmacy
15
 Coverage
16
 Over 50% of states Under 50% of states Over 50% of states
17
 Security & Tracking
18
 ID check at point of delivery* (*ID checks temporarily paused due to COVID-19) Yes Yes Yes
19
 Signature capture at point of delivery* (*Signature collection temporarily paused due to COVID-19) Yes Yes Yes
20
 Real-time tracking other than shipping carrier tracking Yes Yes Yes
21
 Delivery status updates No Yes Yes
22
 Tamper-evident packaging provided No No No
23
 Means of delivery
24
 Independent contractors Independent contractors, or pharmacy can keep own driver Independent contractors

The Domino Effect:
Challenges to Delivery

Despite patients’ increasing need for delivery and copious industry research demonstrating its positive impact on adherence, there have been considerable obstacles to the expansion of delivery.

Patients

Until recently, patients were largely unaware that prescription delivery was available to them, even though most major chains and 76% of independent pharmacies offered delivery prior to the pandemic.22 This may be due in large part to the lack of advertising by pharmacies.

Pharmacies

Many pharmacy owners like the idea of delivery and understand how it can improve patients’ adherence to therapy. At the same time, they may avoid promoting it, afraid that profits will fall if patients no longer physically visit the store and browse. Unfortunately, many pharmacies are reliant on the sale of OTC medications, toiletries, and other products for revenue, due to PBM practices such as low reimbursements, retroactive DIR fees, and delayed payments for medication therapy management.23

PBMs

While the Pharmaceutical Care Management Association says, “PBMs recognized that home delivery can provide an alternative way of safely accessing needed maintenance medications and other prescription drugs,” there has not been much momentum on improving medication access. PBM fees and low reimbursements can have a negative effect on many pharmacies in terms of getting patients into the store.

In early March 2020, the American Pharmacists Association (APhA) felt it necessary to explicitly ask PBMs to lift administrative restrictions on access such as “burdensome prior authorization, refill limits, and home delivery requirements.”24 Many of these restrictions were then temporarily lifted. Nevertheless, PBMs continue to primarily promote delivery via their own mail-order pharmacies.25

What’s at Stake

Last September, Eric Kinariwala, CEO and founder of Capsule prescription delivery, told Becker's Hospital Review that “consumers are demanding a better pharmacy experience and that prescription delivery will over time become the new normal.” Little did any of us realize how quickly that would become reality.

The COVID-19 pandemic has changed the healthcare industry landscape. It was already clear that reliable prescription delivery had the potential to impact the quality and cost of American healthcare for generations to come. Now it is equally clear that reliable prescription delivery must become the new normal.

This report will be updated over the course of the year to reflect changes in the delivery landscape and healthcare industry overall.

Glossary

Adherence
When a patient takes a medication exactly as prescribed (i.e. correct dose, correct administration, correct duration of therapy).
Brick-and-mortar
Physical pharmacy stores. These may also use a website, patient portal, phone line, or app to conduct business, but largely depend on customers coming into the store.
Chain pharmacies
Major pharmacy retailers with many locations nationwide. E.g. CVS, Walgreens, etc.
Chronic condition
A long-term disease or condition, variously defined as lasting at least 3-12 months, and requiring ongoing care or therapy.
Digital Pharmacy Accreditation
Signifies that an online pharmacy complies with the National Association of Boards of Pharmacy criteria, which includes patient privacy, order security, quality assurance, and provision of meaningful consultation between customers and pharmacists.
DIR fees
Direct and Indirect Remuneration fees. Various fees collected by a PBM from pharmacies for a variety of reasons.
E-commerce
Pharmacies without physical locations that conduct business entirely online.
Inventory management
The process of maintaining an adequate stock of medications in order to avoid too little or too much stock on the pharmacy shelves.
Maintenance medications
Prescriptions taken at regular intervals (usually daily) to treat chronic conditions.
Medication therapy management
Broad range of medication services administered by pharmacists. Often centers around reviewing a patient's prescriptions, ensuring they understand why and how to take them, and monitoring their progress on therapy.
OTC
Over-the-counter, that is, not prescribed.
PBM
Pharmacy benefit manager. Third-party companies that manage patients' prescription drug benefits on behalf of an insurer.
Pharmacy software systems
Software implemented by pharmacies to manage their operations.
Prior authorization
Approval from the health plan or PBM that is required for payment of certain medications.
Reimbursements
Payments made to a pharmacy after a prescription is billed to the patient's PBM and the PBM accepts the claim.
Return to stock
When prescriptions are dispensed but not picked up by the patient, the medication must be put back into stock containers. Some states have strict guidelines on returning to stock to ensure labels are appropriately destroyed and batches of medication are not mixed.
Service area
Geographic area served by the delivery solution.
Service levels
In regards to delivery, the turnaround time from delivery request to completion. Service levels could include on-demand, same-day, next-day, shipping, expedited shipping, etc.
Shipping
Delivery completed by the USPS or other package carriers and transported by ground or air.
Telehealth
Healthcare and health consultations delivered via telephone, online portal, or other telecommunications means.

Sources

  1. https://blog.computer-rx.com/4-things-to-consider-prescription-delivery
  2. https://www.mckinsey.com/industries/retail/our-insights/same-day-delivery-ready-for-takeoff
  3. https://www.mckinsey.com/industries/travel-transport-and-logistics/our-insights/how-customer-demands-are-reshaping-last-mile-delivery
  4. IQVIA, “Shifts in Healthcare Demand, Delivery and Care During the COVID-19 Era”
  5. https://www.census.gov/newsroom/press-releases/2018/cb18-41-population-projections.html
  6. https://www.sciencedirect.com/science/article/pii/S2210833515000441
  7. https://www.pharmacyowners.com/5-programs-your-independent-pharmacy-cant-afford-to-ignore
  8. https://www.rand.org/content/dam/rand/pubs/tools/TL200/TL221/RAND_TL221.pdf
  9. https://www.rand.org/content/dam/rand/pubs/tools/TL200/TL221/RAND_TL221.pdf
  10. https://www.medscape.com/answers/176595-45364/what-is-the-prevalence-of-gastroesophageal-reflux-disease-gerd-in-the-us
  11. https://www.cdc.gov/copd/basics-about.html
  12. https://www.goodrx.com/drug-guide
  13. https://www.beckershospitalreview.com/pharmacy/10-most-prescribed-drugs-in-the-u-s-in-q1.html
  14. https://www.drugtopics.com/drug-price/annual-price-increases-most-commonly-prescribed-brand-name-drugs
  15. https://www.mckinsey.com/industries/retail/our-insights/same-day-delivery-ready-for-takeoff
  16. https://medium.com/mobikit/delivery-intelligence-96bd32a152f8
  17. https://www.pewresearch.org/internet/fact-sheet/mobile/
  18. https://www.statista.com/statistics/243794/us-adult-cell-phone-owners-who-have-downloaded-apps-by-age-group/
  19. 2019 NCPA Digest
  20. https://www.mckesson.com/Blog/How-to-Improve-Revenue-at-Your-Independent-Pharmacy/
  21. https://www.prnewswire.com/news-releases/apha-urges-insurers-pbms-to-immediately-remove-barriers-on-prescription-drug-refills-for-coronavirus-preparedness-301022567.html
  22. https://www.pcmanet.org/pbms-are-taking-action-to-promote-patient-access-to-prescription-drugs-during-the-covid-19-pandemic/
  23. https://www.beckershospitalreview.com/pharmacy/pharmacy-industry-is-finally-seeing-a-much-needed-change-capsule-ceo-says.html