Although Walgreens customers expect to be greeted by a friendly human face, robots increasingly are filling their prescriptions behind the scenes. The pharmacy giant is expanding its use of so-called micro-fulfillment centers to control costs and free up staff to focus on other tasks.
These centers already handle 40% of prescription volume at supported pharmacies and account for 16 million prescriptions filled each month, a company source told CNBC. The company hopes to serve more than 5,000 stores from 11 micro-fulfillment centers by the end of 2025.
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Walgreens launched the concept in 2021 and then took a break to assess the impact and make refinements. The renewed focus comes as it prepares to go private by the end of 2025 in a $10 billion deal with Sycamore Partners.
Micro-fulfillment centers already have generated approximately $500 million in savings by cutting excess inventory and boosting efficiency, Kayla Heffington, Walgreens’ pharmacy operating model vice president, told CNBC.
The system first determines whether a subscription should be filled at a retail location or at a micro-fulfillment center. Prescription drugs that patients take regularly for chronic health conditions and don’t require immediate pickup usually are routed to a micro-fulfillment center. A robotic system fills the prescription, with the support ofpharmacy technicians and other professionals. These technicians fill canisters with medications for the robots to use, and pharmacists verity the accuracy.
The system is not without risks, such as supply disruptions if the sophisticated technology malfunctions. However, Walgreens believe these risks are outweighed by streamlined workflow, faster delivery and reduced burden on the workforce.
“Right now, they’re the backbone to really help us offset some of the workload in our stores, to obviously allow more time for our pharmacists and technicians to spend time with patients,” said Rick Gates, Walgreens’ chief pharmacy officer. “It gives us a lot more flexibility to bring down costs, to increase the care and increase speed to therapy -- all those things.”
The centers give Walgreens a competitive advantage over independent pharmacies and some rivals that don’t have centralized support for their stores, he said. However, several retailers have tested or currently are using their own micro-fulfillment facilities to dispense groceries and other items.
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Alan Goforth
Alan Goforth is a freelance writer in suburban Kansas City. In addition to freelancing for several publications, he has written a dozen books about sports and other topics.
