By Dave Ketchen and Andrew Balthrop
Yellow-armed robots in a facility near Dallas now bottle and package many of the prescriptions that are sold in parts of Texas, Louisiana and Arkansas, automating a task historically handled by friendly, white-coated pharmacists at a neighborhood drug stores.
Walgreens Boots Alliance Inc., the nation’s second-largest pharmacy chain, already operates eight automated drug-filling centers that serve 1,800 of its 9,000 stores. The company plans to nearly triple those numbers by 2025, eventually filling 40-50 percent of its prescriptions at centralized sites that will serve up to 8,500 of its stores.
Center employees process prescriptions that can’t be handled by the robots (like inhalers) and provide quality control for the automation. The prescriptions, which for now don’t include controlled substances or time-sensitive medications, are then delivered to the stores and dispensed by pharmacists and technicians.
This move toward automation offers tremendous potential for improving health care delivery systems, but only if industry leaders take advantage of the benefits, mitigate critical risks and navigate tricky dilemmas.
The Benefits
A central distribution system offers many benefits. For instance, stores can more efficiently use their inventory space, either holding less inventory or more high-demand items. Also, one robot can fill 300 prescriptions in an hour — what a typical pharmacy handles in a day. And the automated pill fillers can more accurately count medications, avoiding the human error factor than can lead to, say, 10 pills in a bottle that should have 12.
Walgreens claims that centralized automation eventually will save the company more than $1 billion a year while reducing pharmacists’ workloads by 25 percent. This could make community pharmacy a more attractive career path because, as Walgreens CEO Roz Brewer noted, automation frees up pharmacists to spend more time as caregivers and less as pill counters.
“We’re doing all of this work so that the pharmacist has an easier job, so that they can get back to being front and center, building a relationship with that patient and interacting the way they were trained — the work that they love to do,” Brewer said.
Ideally, pharmacists also will better perform the more complex elements of their jobs. In 2016, the Chicago Tribune conducted a field test to see how well pharmacies guard against dispensing dangerous pairings of drugs. Reporters visited 255 pharmacies with prescriptions for clarithromycin and simvastatin, two drugs that are relatively safe when taken alone.
Combining them, however, can cause a “severe breakdown in muscle tissue and lead to kidney failure and death,” the newspaper reported. Yet, 52 percent of the pharmacies in the study sold the medications without warning of the dangers.
To the extent that automated prescription filling leads to more attentiveness from pharmacists — as well as improved data analytics that flag dangerous interactions — automation may indirectly save lives.
The Risks
Thousands of travelers endured frustrating delays in January when a computer glitch shut down the airline industry for most of a full day across the United States. Imagine such a glitch impacting something far more important — like prescription medications.
Centralized distribution centers offer efficiencies that result in many benefits; however, they also put large segments of the supply chain at risk. What happens if an ice storm knocks out the facility in Dallas, or a hurricane shuts down a facility in a coastal state? What if a software malfunction disrupts operations or a critical number of staffers at a center all get sick at the same time?
Centralization creates more efficient supply chains, but it also makes them more vulnerable to disruption. Contingency plans for keeping products flowing can’t be a nice-to-have because medications aren’t a nice-to-have. And those drugs will be in particularly high demand during a crisis. Policymakers have a vested interest in mitigating the risks of centralization, and firms would be wise to involve them in their planning.
The Dilemmas
The technology for operating centralized pharmaceutical centers has been tested in years past but didn’t stick because it freed up too much time for pharmacists, according to Rina Shah, a group vice president overseeing pharmacy strategy at Walgreens.
“There was nothing for them to do in the store,” Shah said.
The pandemic changed that by increasing the types of services pharmacists can provide that are reimbursable by insurers — administering vaccinations and COVID-19 tests, for instance.
For now, there’s a shortage of community pharmacists. Corporate leaders, however, eventually will face the temptation to reduce the number of highly paid pharmacists as a cost-savings measure, and this won’t benefit consumers.
Another dilemma is how to use centralized distribution models with controlled substances. Centralized facilities would allow for greater control of inventories, reducing the opportunities for theft by reducing the links in the supply chain. On the flip side, increased security would be needed at the distribution centers and when transporting prescriptions to local pharmacies.
On the whole, centralized packaging and distribution of prescriptions figure to improve supply chain dynamics while improving access to care for patients. Corporate leaders and policymakers simply need to do their part by keeping consumers at the forefront of their decision-making.
Dave Ketchen serves as Harbert Eminent Scholar at Auburn University. His research focuses on the intersection of supply chain management, strategy, and entrepreneurship. He earned his Ph.D. in business Penn State University in 1994.
Andrew Balthrop is a research associate at the Supply Chain Management Research Center at the University of Arkansas. His research focus is the interaction between supply chain management and government policy. He earned his Ph.D. in economics from Georgia State University in 2012.
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