Digital pharmacies, which provide a faster and easier way to get prescriptions, are implementing new technologies to improve prescription fulfillment and delivery. Digital pharmacies have the potential to help reduce medication errors, increase access to prescriptions and provide pharmacists more time to counsel patients. These factors can boost adherence among patients.
Market dynamics, such as the pandemic, as well as technology, including software automation, logistics, robotics and micro-fulfillment, are key drivers advancing the digital pharmacy market. For example, digital pharmacy NowRx is using an end-to-end robotic dispensing software called QuickFill, where robots sort, count, bottle and label medications in less than 30 seconds. The software further streamlines the insurance approval process and consumers can easily track their deliveries.
The COVID-19 pandemic is increasing demand for digital support tools from specialty pharmacies, with more patients and providers accessing the platforms due to social distancing. In the U.S., use of online pharmacies has increased by 17% over the last year. The highest usage is among consumers age 18 – 34 years. The lowest is among people above the age of 65 years1.
Digital pharmacies also help chronically ill patients track their medications, and provide refill reminders that support compliance. Refill reminders are one of the key features increasing uptake of digital pharmacies among U.S. patients1.
Revolutionizing mail-order pharmacies
Nearly one-third of Americans who received medications through the mail experienced delays in delivery or did not receive a shipment, according to an Axios-Ipsos poll released in August 2020 reflecting, in part, a nationwide slowdown in U.S. Postal Service delivery due to operational changes initiated by management. However, digital pharmacies are expediting the process and even providing one-day deliveries. Uber is also trying to capture a share of the business, having formed a partnership with NimbleRx to offer online prescription drug ordering and delivery direct to patients in Seattle and Dallas. Rx delivery startup Capsule recently obtained $200 million in funding from Thrive Capital and Glade Brook Capital and plans to expand its same-day prescription delivery services nationwide.
Recent mergers and funding have catapulted these small startups into the limelight
Amazon’s 2018 acquisition of PillPack gave the e-commerce giant immediate entry into the drug supply business. The recent launch of Amazon Pharmacy could pose a threat to traditional bricks-and-mortar pharmacies.
As the digital pharmacy market grows, funding will help pharmacies expand further and provide a stronger return to consumers and investors.
The road ahead
The digital pharmacy market is expected to grow at a compound annual growth rate (CAGR) of 17.3% in the next six to seven years. Most players plan to expand into new parts of the country and to provide enhanced services such as same day delivery. While COVID-19 has accelerated enrollment in digital pharmacies, this trend is likely to continue beyond the pandemic, as patients value their convenience. Though adoption has been slower among seniors in the U.S., relative to younger cohorts, 29% of those ages 65 and up are interested in using them, indicating plenty of room for these services to grow1.
Payers and pharmas seeking to encourage adoption of digital pharmacies should explore:
- Investing in efforts to raise awareness of digital pharmacies in order to encourage adoption, particularly among seniors;
- Helping these services build out better supply networks, enabling them to dispense and deliver a greater volume of drugs to patients.
- Partnering with digital pharmacies on provision of educational materials for patients (e.g., disease education and treatment information)
1) Cybercitizen Health® U.S. 2020 (Clarivate)