Mail-Order Pharmacy May Dominate Drugstores

By Mel Duvall Print this article Print

Big companies think automated mail-order pharmacies like Medco help cure rising drug costs. That remedy won't make retail giants like Walgreens and CVS feel better.

The sign on the door of Medco's Willingboro, N.J., pharmacy looks just like a thousand similar signs posted at neighborhood pharmacies across the country. "Pharmacist in charge, Barry M. Cesanek," it reads. But that's where the familiarity ends.

Inside this "pharmacy," vacuum tubes pop the exact quantity of pills required for an individual's prescription into a procession of plastic trays filled with bottles. Machines screw the caps onto their bottles with a force just right for handling by an arthritic senior. Robotic arms zero in on the correct bottle for a patient from thousands of trays and drop it into a waiting, addressed envelope. Conveyer belts carry the envelopes to mail-sorting stations, where they slide off sloped trays into large bags, ready to be taken to the nearby postal depot.

Neither a pill nor a bottle ever is touched by a human hand.

More than 9,000 bottles holding prescriptions for the employees or retirees of companies like General Motors, Ford Motor Co., United Airlines and IBM roll off these lines every hour. At peak, more than 1 million bottles leave the Willingboro facility each week.

Welcome to the front line in the battle between employers and spiraling drug costs. By handing off workers' drug-benefit programs to huge automated mail-order facilities like Medco's, businesses hope to put a dent in prescription costs that have been growing at about 15% a year since 1999.

In the process, the automated pharmacies are changing the face of the industry and posing a challenge to retail giants Walgreens, CVS, Costco and Wal-Mart.

"A very busy retail pharmacy might fill as many as 1,000 prescriptions a week," says Cesanek, Medco's pharmacy practice director, who worked in a small-town retail pharmacy before joining Medco.

Check out eWEEK.com's for the latest news, views and analysis of technology's impact on health care.

"This is like having 1,000 stores under one roof."

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This article was originally published on 2005-05-04
Contributing Editor
Mel Duvall is a veteran business and technology journalist, having written for a variety of daily newspapers and magazines for 17 years. Most recently he was the Business Commerce Editor for Interactive Week, and previously served as a senior business writer for The Financial Post.

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