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Costco, Instacart pilot prescription drug delivery

Two-state test marks delivery specialist’s foray into pharmacy

Costco Wholesale Corp. is testing prescription drug delivery via Instacart in California and Washington.

San Francisco-based Instacart confirmed news of the pilot, first reported yesterday by CNBC. Under the test, still in its early stages, Costco pharmacy customers can get same-day delivery of prescriptions along with groceries and staple household products, in as soon as an hour.

Prescription delivery is free for orders of $35 or more for customers with a Costco or an Instacart membership, according to Instacart.

“Part of grocery shopping for many also includes picking up much-needed medication. Convenience is important to Instacart customers, and we’re always exploring new ways to partner with retailers to connect customers to the brands they love and the goods they depend on,” Instacart said in a statement.

Instacart said Costco customers ordering prescriptions for delivery must be age 18 or older and enter their birthdate at checkout, as well as present a valid government ID at the time of delivery. Instacart sets a default tip amount of 5% of the order total, with a minimum of $2, which a customer can raise or lower.

To deliver prescriptions, Instacart personal shoppers must complete online HIPAA certification. Prescription orders picked up from Costco come in a sealed, tamper-proof bag, and personal shoppers don’t know what medications are in the bag they’re delivering, Instacart noted.

Costco declined to comment on the prescription delivery pilot with Instacart. The Issaquah, Wash.-based warehouse club chain first partnered with Instacart in February 2016 and now offers Instacart grocery delivery via all of its 500-plus U.S. clubs. As of the end of 2018, Costco was the 10th-largest U.S. pharmacy, with estimated prescription revenue of $2.6 billion, according to the Drug Channels Institute.

The pilot with Costco signals Instacart’s first foray into prescription drug delivery. Instacart provides delivery service to the three largest U.S. drugstore chains (CVS Pharmacy, Walgreens and Rite Aid) and Canada’s biggest drug chain (Shoppers Drug Mart) but not for prescription medicines.

Rival Shipt, owned by Target Corp., began providing same-day delivery of prescriptions for CVS in early April. All pharmacies in Target stores are operated by CVS, which acquired the discount chain’s pharmacy and clinic business in December 2015. Walgreens launched next-day prescription delivery this past December under a partnership with Federal Express. Walmart provides delivery of prescriptions through its own service.

Pharmacy retailers stepped up efforts to launch prescription delivery services following Amazon’s acquisition of online pharmacy PillPack in June 2018. PillPack’s service, however, specializes in prescheduled delivery of maintenance medications, with customers on multiple prescriptions receiving their medicines sorted by date and time.

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