Is Walmart Poised To Dominate Pharmacy Delivery?

Joining a host of new and old competitors, Walmart recently announced that it has launched a same-day pharmacy delivery service in six states, with a plan to be available in 49 by the end of January 2025.

The discount giant said it now offers same-day pharmacy delivery in Arkansas, Missouri, New York, Nevada, South Carolina, and Wisconsin. Delivery is available for both new prescriptions and medication refills.

Walmart+ members receive free delivery on pharmacy items, while non-Walmart+ members pay a delivery charge of $9.95. Customers will have a choice to schedule their same-day drop-off within certain delivery windows or choose on-demand delivery within three hours or express delivery in as little as 30 minutes.

One advantage Walmart has over many competing platforms is that orders can be combined with general merchandise. Walmart cited a recent survey the company completed, which found that 55% of Walmart customers wanted to have their prescriptions delivered along with their groceries and other items in a single order.

Another advantage is reach. With the retailer’s footprint of 4,600 stores across the U.S., delivery is possible to more than 86% of households, the retailer said.

Tom Ward, executive vice president and chief e-commerce officer at Walmart U.S., said in the announcement, “If you’re sick, we can deliver the necessary medicine along with everything else you need to feel better: cough drops, a heating pad, blanket and orange juice. Walmart’s size, resources and expertise set it apart from other retailers.”

Walmart’s announcement comes on the heels of Amazon recently announcing plans to expand its national pharmacy network next year, promising to reach nearly half of U.S. residents for same-day delivery of medications.

National drug chains such as Walgreens and CVS also offer same-day prescription deliveries within a certain radius of their stores. Newer competition includes Mark Cuban’s Cost Plus Drugs online pharmacy, which also ships right to the patient’s door.

However, the retail pharmacy model has been squeezed by complicated and sometimes lower reimbursement rates for medication as well as low dispensing fees for Medicaid enrollees. Many blame the profitability challenges on pharmacy benefit managers, who run prescription drug coverage for insurers, large employers, and other clients. In September, the federal government sued the big three pharmacy benefit managers — Caremark, Express Scripts, and OptumRx — over a system of drug rebates that regulators say has made the price of insulin soar for diabetic patients.

In late May, Walmart itself shuttered 51 in-store health clinics as well as its telehealth service, citing “the challenging reimbursement environment and escalating operating costs.”

The profitability pressures have led to rounds of store closures at CVS, Walgreens, Rite Aid, and independents that are seen creating “pharmacy deserts,” or lack of nearby pharmacy options, in some areas. Nearly half of U.S. counties have communities more than 10 miles from a pharmacy, according to a study published in August by the Journal of the American Medical Association.

Pharmacy delivery from Walmart could help fill the gap. Only 31% of U.S. adults had used a drug delivery service as of a 2022 university survey, but 71% believe it would be “more convenient and accessible than in-store drug refill.”

“The service provides a significant benefit to Walmart customers and members, particularly families, seniors and those managing chronic conditions who do not have time for multiple trips,” Walmart said in its statement. “For Walmart, reaching these people is no problem.”