Costco jumps into lucrative prescription drug “one hour delivery” market, proving nearly every retailer in America is driven by Big Pharma profits
11/07/2019 // Ethan Huff // Views

Warehouse chain Costco is trying its hand at the "one hour delivery" market for prescription drugs.

By partnering up with delivery start-up Instacart, Costco hopes to be able to compete with big corporations like Amazon and Walmart that are similarly dabbling with their own prescription drug delivery services.

Not yet at the level of CVS Pharmacy, which is testing out drone-based pharmaceutical delivery technologies, Costco is piloting a program in California and Washington where customers can have their prescription meds delivered to their home or office on-demand.

It's similar to what Amazon is attempting to do with its 2018 purchase of PillPack, an internet pharmacy start-up company that caters specifically to patients with chronic ailments. Walmart is also now offering mail-order drug delivery in some areas.

While CVS Pharmacy is testing out drones, the company faces the threat of elimination by Amazon, Walmart, and now Costco, all of which are vying for the top spots in the new age of prescription drug delivery.

"Delivery will be free on orders that cost $35 or more, not including a tip, which Instacart sets at 5% of the order price," writes CNBC's Christina Farr about Costco's program.

"Otherwise, prices vary depending on how quickly a member needs the medicines delivered – the fastest option is an hour – but typically costs less than $10. Updates are provided via text message, which mirrors the experience of ordering groceries from Instacart."

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Costco also offers half-price flu shots to its members – is the company trying to kill them or something?

Another area where Costco hopes to break ground is with vaccines. The company reportedly offers flu shots, for instance, that are "about half the price of its competitors," according to Farr.

We can't say for sure whether or not Costco plans to offer other vaccines to its members, but the flu shot scam is definitely one of them. Even though flu shots don't work and have the potential to kill Costco customers, the company offers them anyway – and for what purpose?

Has Costco sold out to Big Pharma, you might be asking yourself? Maybe. Or maybe it's just offering a convenience service to patients who have a hard time getting in and out of Costco stores. After all, Costco could actually lose money with this delivery service as some customers will no longer browse the store for other products.

Still, Costco is now lumped in with the likes of Amazon, which some would say casts a negative light on a beloved bulk retailer that, unlike many of its competitors, had seemed to put the interests of its customers first.

Can this still be said, now that Costco seems to be focusing its sights on the drug business? This is difficult to say. But what it does show is that retailers these days consider pharmaceuticals a top retail item because of the immense profits they generate.

In other words, selling more pharma means raking in more cash, whether you're Amazon, Walmart, CVS Pharmacy, Walgreens, a major supermarket, or now Costco.

Another thing to point out is that Costco was recently fined by the government of Ontario in Canada after it was determined that Costco had profited to the tune of more than $7 million from illegal pharmacy kickbacks.

Costco claims that it thought the payments it received from Big Pharma were legal at the time, but does acknowledge that it failed to abide by Ontario's unique rebate laws, which prohibit pharmacy operators from accepting rebates from drug manufacturers that have products listed on the province's drug database.

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