Walgreens uses automation to fill more customer prescriptions. Inside a Dallas area facility, bright yellow robotic arms hold pill bottles up to dispensers, which deliver tablets like a carefully calibrated vending machine.
Melissa Repko | CNBC
NORTHLAKE, Texas – Bright yellow robotic arms are becoming an increasingly important part of Walgreens’ workforce.
Inside a large facility in the Dallas area, they fill thousands of prescriptions for customers taking medications to manage or treat hypertension, diabetes, or other conditions. Each robot can fill 300 prescriptions in an hour, the company said, roughly the same number that a typical Walgreens pharmacy with a handful of staff can do in a day.
Walgreens Boots Alliance is opening up automated and centralized hubs to keep pace with the rapidly changing pharmaceutical industry. The pandemic has intensified the pharmacy chain’s need to remain relevant as online pharmacies steal sales and more customers have items from toilet paper to toothpaste delivered to their doorstep. The global health crisis has also increased the demand for pharmacists, as hospitals and pharmacies have hired them to administer Covid vaccines and tests.
This forced Walgreens and its competitors, CVS Health and Rite Aid, to rethink the role of their stores and pharmacists.
Walgreens’ new CEO, former Starbucks chief operating officer Roz Brewer, wants to make healthcare the company’s “growth engine.” He acquired the majority stake in VillageMD, a primary care company, and iA, a pharmaceutical technology and health automation company that is helping build centralized hubs. He is considering a potential sale of his UK-based Boots business.
By 2025, up to half of Walgreens’ prescription volume from the shops could be filled in automated centers, said Rex Swords, who oversees the facilities as Walgreens Group President for Centralized Services, Operations and Planning.
This will free up more time for pharmacists to provide health care, Brewer said in an interview with CNBC’s Bertha Coombs.
“We are doing all of this work, so that the pharmacist has an easier job, so that he can go back to being the center, building a relationship with that patient and interacting the way he was trained – the job he loves to do. “, he said.
Pharmacists will continue to stock time-sensitive drugs and controlled substances in local stores as the company expands its use of robots.
Jefferies analyst Brian Tanquilut said automation could help Walgreens focus on ways to differentiate itself from online pharmacies such as PillPack and Capsules owned by Amazon and CVS, which owns health insurer Aetna and pharmacy benefits manager. Caremark.
“This is a complementary move to some of the health strategies they have outlined,” he said.
CVS uses robotics to help fill prescriptions in its highest-volume stores, but via a spokesperson, the company declined to say how much of its overall volume is filled by automation.
Walgreens will share its second quarter fiscal earnings on Thursday.
Pill bottles and caps move through a choreographed and highly automated assembly line in the Dallas area. Walgreens is building similar micro-fulfillment centers across the country.
Melissa Repko | CNBC
A look to the future
The Northlake robotic center, approximately 36 miles northwest of Dallas, offers a glimpse into Walgreens’ future. It has 220 employees, including a handful of licensed pharmacists.
About 35,000 prescriptions are filled in the Dallas-area facility each day, but that number will eventually increase to 100,000 per day, Swords said.
Over the next three years, Walgreens expects to grow to a total of 22 facilities serving more than 8,500 of the company’s nearly 9,000 stores. He has opened two more near Phoenix and Memphis.
Instead of being filled by hand, the pill bottles and caps move through a choreographed and highly automated assembly line.
Pill containers come in robotic capsules at the Walgreens automated facility in the Dallas area.
Melissa Repko | CNBC
A team of workers feeds the robots’ pill containers. Each drug has its own container and pill counter. A yellow robotic arm grabs a labeled pill bottle and brings it closer to the container, which dispenses the pills like a carefully calibrated vending machine.
Then, before the pill bottle leaves the pod, it is covered with a cap.
In the Dallas facility, the robot pods can dispense approximately 900 different drugs. Some common medications are found in multiple dispensers to keep up with the workload.
Pill bottles travel along the track. At one station, some are paired with a patient’s other drugs or the rest of his drug supply for 90 days. Scanners read barcodes, so printers can prepare documents and bags for customers to collect later.
Those prescriptions, now packaged in a bag, are ferried by rotating robots similar to Roomba. The devices sort the prescriptions and drop them into plastic containers that make their way to the same pharmacy.
A worker places filled and packaged prescriptions on rotating robots at Walgreens’ centralized facility in the Dallas area. The robots help sort prescriptions and place them in plastic containers that make their way to the same pharmacy.
Melissa Repko | CNBC
About 30 percent of prescriptions at the facility skip the automated assembly line, Swords said. Instead, workers manually prepare items such as asthma inhalers, eye drops, and temperature-controlled medications.
There are security checks throughout the process, including pharmacists checking drugs in pill containers and bottles, electronic locks on the robot pods that can detect and stop dispensing if a container is in the wrong place, and zip ties on bags carrying filled prescriptions to stores.
The facilities still don’t meet direct mail requirements, but that’s on the program’s roadmap, Swords said.
More practical pharmacists
AmeriSourceBergen trucks bring ready-to-go prescriptions to over 500 pharmacies in much of Texas, parts of Arkansas and parts of Louisiana, within a radius of approximately 400 miles. The same trucks also deliver wholesale drugs to those pharmacies.
For customers, the move to automation would be difficult to detect, aside from slightly different packaging.
For Walgreens, the investment could translate into cost savings and new revenue streams. Walgreens president John Standley said on the company’s investor day in October that the fulfillment microcentres will reduce the company’s working capital by $ 1.1 billion by 2025.
As more prescriptions are filled by robots, he said pharmacists can take on other tasks Walgreens can bill insurers or customers, such as testing and treating medical conditions like strep or flu, and writing prescriptions for people at risk for HIV.
For example, as part of a pilot program, Ohio pharmacists provide advice and manage care for patients with asthma and chronic obstructive pulmonary disease.
Rick Fernandez, Walgreens regional health director in the Dallas area, said the pandemic underscored the value of pharmacists and how they can be used in smarter ways.
“It’s kind of depressing to fill the scripts all day,” he said. “What we were hearing was that the pharmacy was more of an asset that people gave us credit for.”
Jefferies’ Tanquilut said automation can reduce staffing needs and turn pharmacists into more practical medical service providers. It is unclear how this will turn out, whether this will mean smaller pharmacy staff or a workforce of the same size or larger, but with different roles. Another factor is state laws. Walgreens is urging state lawmakers to allow pharmacists to provide a longer list of health services.
The challenge, he said, will be to get customers and insurers to pay, rather than expect free advice.
“One of the key questions is ‘Do you get paid for these things?'” He said. “The idea or the hope is that over time there will be effective reimbursement for providing that service to patients.”
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