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Bankruptcies and Store Closings Are Signs of Tough Times Ahead for US Retail Pharmacy Chains

Plans by several national retail pharmacy chains to expand primary care services and even some clinical laboratory test offerings may be delayed because of financial woes

Times are tough for the nation’s retail pharmacy chains. Rite Aid Corporation, headquartered in Philadelphia, closed 25 stores this year and has now filed for bankruptcy. In a press release, the retail pharmacy company announced it has “initiated a voluntary-court supervised process under Chapter 11 of the US Bankruptcy Code,” and that it plans to “significantly reduce the company’s debt” and “resolve litigation claims in an equitable manner.”

Rite Aid may eventually close 400 to 500 of its 2,100 stores, Forbes reported.

Meanwhile, other retail pharmacy chains are struggling as well. CVS Health, headquartered in Woonsocket, Rhode Island, and Walgreens Boots Alliance of Deerfield, Illinois, are each closing hundreds of stores, according to the Daily Mail.

They are each experiencing problems with labor costs, theft, being disintermediated for prescriptions by pharmacy benefit managers (PBMs), and probably building too many stores in most markets.

This is a significant development, in the sense that Walgreens, CVS, and Walmart are each working to open and operate primary care clinics in their stores. This is a way to offset the loss of filling prescriptions, which has migrated to PBMs. Primary care clinics are important to the revenue of local clinical laboratories, but retail pharmacy chains do not yet operate enough primary care clinics in their retail pharmacies to be a major influence on the lab testing marketplace.

Jeffrey Stein

“With the support of our lenders, we look forward to strengthening our financial foundation, advancing our transformation initiatives, and accelerating the execution of our turnaround strategy,” said Jeffrey Stein (above), Rite Aid’s CEO/Chief Restructuring Officer, in a press release. Clinical laboratory leaders may want to closely monitor the activities of the retail pharmacies in their areas. (Photo copyright: Rite Aid.)

Multiple Pharmacy Companies at Financial Risk

Rite Aid Corporation (NYSE: RAD) confirmed it continues to operate its retail and online platforms and has received from lenders $3.45 billion in financing to support the company through the bankruptcy process. 

However, according to the Associated Press (AP), Rite Aid has experienced “annual losses for several years” and “faces financial risk from lawsuits over opioid prescriptions,” adding that the company reported total debts of $8.6 billion.

Additionally, the US Department of Justice (DOJ) filed a complaint “alleging that Rite Aid knowingly filled unlawful prescriptions for controlled substances,” explained a DOJ press release.

Rite Aid is not the only retail pharmacy brand dealing with unwelcome developments. Fortune reported last year that Walgreens and CVS paid a combined $10 billion to 12 states for “involvement in the opioid epidemic.”

Walgreens intends to close 150 US and 300 United Kingdom locations, its former Chief Financial Officer James Kehoe shared in a third quarter 2023 earnings call transcribed by Motley Fool.

And in a news release, CVS announced plans to close 900 stores between 2022 and 2024.

Pharmacy Companies’ Investment in Primary Care 

Though they are experiencing difficulties on the retail side, Walgreens and CVS have significantly invested in primary care.

In “Walgreens Continues Expansion into Primary Care as VillageMD Acquires Starling Physicians Group with 30 Locations in Connecticut,” we covered how Walgreens’ VillageMD primary care clinics business was expanding its footprint by acquiring Starling Physicians, a multi-specialty physicians group with 30 locations in Connecticut.

In that same ebrief, we reported on CVS’ acquisition of Oak Street Health, a Chicago-based primary care company, for $10.6 billion. CVS plans to have more than 300 healthcare centers by 2026.

“We looked at our business, and we said, ‘We’re seeing an aging population.’ We know people don’t have access to primary care. We know that value-based care is where it’s going. We know that there’s been a renaissance in home (care). So that’s kind of how we approached our acquisitions,” Karen Lynch, CVS Chief Executive Officer told Fortune.

Other Challenges to Retail Pharmacies

It could be that these major pharmacy chains are hoping entry into primary care will offset the loss of sales from prescriptions that have migrated to PBM organizations.

In addition to reimbursement challenges, retail pharmacies are reportedly experiencing:

  • High labor costs,
  • Competition from online, bricks-and-mortar, and grocery businesses, and
  • Effects from the work-at-home trend, among other struggles.

“I think there’s a number of challenges which are coming to a head. One, you have ongoing reimbursement pressure. The reimbursement level for drugs continues to decrease, so profit margin on the core part of the business is under pressure,” Rodey Wing, a partner in the health and retail practices of global strategy and management consulting firm Kearney, told Drug Store News.

Additionally, the pharmacy’s drug sales need to be high enough to retain pharmacists, who are difficult to recruit in a post-pandemic market, Drug Store News explained.

And in the retail space where products are displayed, some pharmacies struggle to compete with Amazon on convenience and with “dollar” stores on price. And with more people working from home, retail pharmacies are seeing less foot traffic, Drug Store News noted. 

Retail pharmacy companies also have competition from pharmacies conveniently situated in grocery and big-box stores, Forbes reported. These include: 

Walmart, for its part, reduced operating hours of pharmacies at more than 4,500 sites, Daily Mail reported.

Thus, medical laboratory leaders would be wise to keep an eye on market changes in their local retail pharmacies. Some locations are equipped with clinical laboratory services and a closure could give local labs an opportunity to reach out to patients and physicians who need access to a new testing provider.

—Donna Marie Pocius

Related Information:

Rite Aid Takes Steps to Accelerate Transformation and Position Company for Long-Term Success    

Drugstore Downsizing: CVS, Walgreens, and Rite Aid to Close Nearly 1,500 Stores

Pharmacy Chain Rite Aid Files for Bankruptcy Amid Declining Sales and Opioid Lawsuits

US Files Complaint Alleging Rite Aid Dispensed Controlled Substances in Violation of the False Claim Act and the Controlled Substances Act

Rite Aid Files for Bankruptcy in the Face of Massive Debts and ‘Potentially Significant’ Claims for Role in the Opioid Epidemic

Walgreens Boots Alliance Q3 2023 Earnings Call

CVS Health Announces Steps to Accelerate Omnichannel Health Strategy

CVS CEO Sees Changes Coming ‘Faster than a Freight Train’ for Medicare. She’s Betting Billions She Can Build a New American Healthcare System

Threats and Opportunities Facing Retail Pharmacy

As CVS Says It Will Close 900 Stores, Here Are Three More Big Pharmacy Chains Which Are Shutting Locations and Cutting Hours

Walgreens Continues Expansion into Primary Care as VillageMD Acquires Starling Physicians Group with 30 Locations in Connecticut

Former Theranos Lab Director and Staff Testify in Ongoing Elizabeth Holmes Fraud Trial That They Voiced Concerns about Reliability and Accuracy of Edison Blood-Testing Device

Four-star general Jim Mattis testified that he eventually “didn’t know what to believe about Theranos anymore,” The Wall Street Journal reported

Former-Theranos CEO Elizabeth Holmes was known for her obsession with Steve Jobs, imitating not only the late Apple CEO’s well-known management style, but also his wardrobe choices. However, clinical laboratory managers and pathologists will not be surprised to learn that—in testimony during Holmes’ federal fraud trial—Theranos’ former laboratory director told jurors Holmes’ “confident demeanor” disappeared when she was told her revolutionary blood-testing technology “didn’t work,” KPIX5 TV reported.

During two days of testimony in San Jose, Calif., pathologist Adam Rosendorff, MD, told jurors that in the days leading up to the 2013 launch of the Edison blood-testing device he warned Holmes in emails and in person that the product wasn’t ready to be deployed commercially.

“I told her that the potassium was unreliable, the sodium was unreliable, the glucose was unreliable, [and] explained why,” testified the clinical pathologist. “She was very nervous. She was not her usual composed self. She was trembling a bit, her knee was tapping, her voice was breaking up. She was clearly upset,” he added.

KPIX5 TV reported that Holmes had told Rosendorff the laboratory could substitute conventional federal Food and Drug Administration (FDA)-approved devices as needed.

Rosendorff left his position with Theranos in November 2014. According to KPIX5, he told jurors, “I felt pressured to vouch for [medical laboratory] tests that I did not have confidence in. I came to believe that the company believed more about PR and fundraising than about patient care. The platform was not allowing me to function effectively as a lab director.”

Adam Rosendorff, MD

Former Theranos Laboratory Director Adam Rosendorff, MD (above), testified in the federal fraud trial of Theranos founder and ex-CEO Elizabeth Holmes that he considered filing a whistleblower lawsuit against his employer because of his concerns about the Edison blood-testing device’s lack of reliability and accuracy of test results. “I wanted to get the word out about what was happening at Theranos,” the clinical pathologist told jurors, the Wall Street Journal reported. (Photo copyright: LinkedIn.)

In continuing testimony, Rosendorff acknowledged that tension increased between himself and Holmes and Theranos’ Chief Operating Officer Ramesh “Sunny” Balwani over Rosendorff’s concerns about the reliability and accuracy of the lab’s test results. At one point, he asked Balwani in an email if his name could be removed from the Theranos CLIA lab license so he would not be legally responsible for the lab’s problems.

Balwani’s own fraud trial begins in January 2022.

Former Theranos Lab Director Considered Filing a Qui Tam Lawsuit

According to the Wall Street Journal (WSJ), Rosendorff testified he forwarded work emails to his personal email account to protect himself in case the federal government investigated Theranos. He also considered filing a whistleblower lawsuit against the company.

“I wanted to get the word out about what was happening at Theranos,” he testified, the Wall Street Journal reported.

The government’s first witnesses were former Theranos employees:

Gangakehedkar testified that Holmes knew about reliability issues with the Edison blood-testing device, yet pressured staff to move forward with the Walgreens roll out.

Theranos’ partnership with Walgreens ended in 2016, after Theranos voided years of test results performed on its machines.

In “Former Theranos Chemist Says Elizabeth Holmes Was Aware of Testing Failures,” the WSJ reported that Gangakhedkar resigned from Theranos in September 2013, taking with her Theranos documents and copies of emails in which she expressed her concerns to Holmes and others about continuing problems with Theranos’ lab tests.

“I was scared that things would not go well,” Gangakhedkar testified, her voice breaking at one point. “I was afraid I would be blamed.”

As foreshadowed during the trial’s opening statements, Holmes’ defense team plans to argue that their client did not intend to defraud investors but believed her blood-testing technology—portrayed as capable of running more than 200 tests using a finger-stick sample of blood—would revolutionize the healthcare industry.

In his opening remarks to the jury, Lance Wade, JD, a member of the Holmes defense team from Williams and Connolly LLP, told jurors that evidence will show Theranos investors were “incredibly sophisticated and knew the risks” and were actually pushing to invest in Theranos. The reality of the case, he said, is “far more human and real, and oftentimes, I hate to say it, technical and complicated and boring” than what the federal government has suggested, Forbes reported.

Four-star General Jim Mattis (ret.) Testifies

According to the Wall Street Journal, former Defense Secretary Jim Mattis testified he joined the Theranos board in the summer of 2013, at which time he invested $85,000 in the company. He said he had first met Holmes in San Francisco in 2011. At the time, Mattis, a Marine Corps four-star general, was leading the US military’s Central Command (CENTCOM) and that, according to testimony, he recognized the Edison device’s potential for use on the battlefield.

Mattis testified he and other Theranos board members were surprised to learn in 2015 that Theranos was using blooding testing equipment from competing companies.

“There came a time when I didn’t know what to believe about Theranos anymore,” he told jurors, according to the WSJ. Mattis resigned from the board in 2016, after learning he would be nominated as Secretary of Defense in the Trump administration.

Courtroom sketch

The courtroom sketch above shows former Defense Secretary four-star general Jim Mattis testifying Wednesday at the criminal trial of Theranos founder Elizabeth Holmes in San Jose, Calif. (Graphic copyright: Vicki Behringer.)

Theranos Investors

Theranos, which reached a peak valuation of $9 billion, received nearly $1 billion in funding from private investors, including from some well-known people. In “Theranos Trial Jurors to Weigh Whether Investors Were Dupes or Savvy Speculators,” according to the WSJ, the startup’s top investors included:

  • The Walton family—$150 million—heirs to the Walmart fortune;
  • Fox News Corp Executive Chairman Rupert Murdoch—$125 million—who sold his shares back to the company in 2017 for $1;
  • Former Education Secretary Betsy DeVos and her family—$100 million;
  • The Cox family, owner of Atlanta-based media and automotive company Cox Enterprises—$100 million;
  • Media investor Carlos Slim—$30 million;
  • Greek shipping magnate Andreas Dracopoulos—$25 million;
  • The Oppenheimer family—$20 million;
  • Riley Bechtel, former Chairman of Bechtel Corp.—$6 million;
  • Estate attorney Daniel L. Mosley—$6 million; and
  • New England Patriots owner Robert Kraft—$1 million.

As Holmes’ fraud trial heats up, Dark Daily will continue its coverage. In “Text Messages Between Theranos Founder Elizabeth Holmes and Ex-Boyfriend Ramesh “Sunny” Balwani Grab Headlines in Early Days of Fraud Trial,” we reported that Holmes’ defense team revealed plans to claim “intimate partner abuse” by Holmes’ then boyfriend, Theranos Chief Operating Officer Ramesh “Sunny” Balwani.

And in “On-demand Video Service Hulu Gets Underway on TV Miniseries Documenting Rise and Fall of Former Theranos CEO Elizabeth Holmes,” we covered Hulu’s plan to produce the “The Dropout,” a limited series chronicling Holmes’ rise and fall from Founder and CEO of $9 billion tech company Theranos to criminal defendant.

The trial is expected to last until mid-December, with jurors hearing testimony on Tuesdays, Wednesdays, and Fridays. For clinical laboratory scientists, each day of testimony should bring a new round of surprises so stay tuned.

Andrea Downing Peck

Related Information

Elizabeth Holmes Trial: Live Updates

Theranos Trial Jurors to Weigh If Investors Were Dupes or Savvy Speculators

Elizabeth Holmes’ Lawyer Says She Made ‘Mistakes,’ But ‘Failure Is Not a Crime’

Former Theranos Chemist Says Holmes Was Aware of Testing Failures

Elizabeth Holmes Confident Demeanor Vanished When Told Tests Didn’t Work, Former Lab Director Tells Jury

Elizabeth Holmes Trial: Jim Mattis Tells Jury He Came to Doubt Theranos Technology

Text Messages Between Theranos Founder Elizabeth Holmes and Ex-Boyfriend Ramesh “Sunny” Balwani Grab Headlines in Early Days of Fraud Trial

On-demand Video Service Hulu Gets Underway on TV Miniseries Documenting Rise and Fall of Former Theranos CEO Elizabeth Holmes

Popular Science Review Finds Seven At-Home COVID-19 Antigen Tests ‘Easy to Use’ and ‘An Important Tool to Slow Spread of the Coronavirus’

Though clinical laboratory RT-PCR tests remain the ‘gold standard’ when diagnosing COVID-19, at-home antigen tests offer convenience and quick test results. But are they accurate?

Less than six months after the US Food and Drug Administration (FDA) issued the first ever emergency use authorization (EUA) for an over-the-counter SARS-CoV-2 diagnostic test to Ellume for its COVID-19 at-home antigen test, the number of do-it-yourself at-home tests available to consumers has grown large enough for Popular Science to publish a review of available consumer COVID-19 testing kits.

Clinical laboratory and pathologists generally acknowledge that RT-Polymerase Chain Reaction (RT-PCR) tests remain the preferred method for detecting COVID-19 disease. However, according to Popular Science, rapid at-home antigen tests that accurately identify people carrying larger loads of the virus are becoming important tools in the fight against spread of the coronavirus.

In “We Vetted Popular At-Home COVID-19 Tests. Here’s What We Learned: Everything you need to know about the growing number of at-home testing options for COVID,” Popular Science evaluated the ease-of-use and effectiveness of the following tests:

Many of the newest at-home tests not only have users collect their own swab or saliva samples, but some also provide results in less than an hour, which can be sent to the user’s smartphone. Conversely, home-based collection kits that are returned to clinical laboratories for testing can take 48 hours or longer for shipping and processing.

The FDA’s emergency use authorization announcement (EUA) for Ellume’s $38.99 COVID-19 At Home Test (above) states the test “is a rapid, lateral flow antigen test, a type of test that runs a liquid sample along a surface with reactive molecules. The test detects fragments of proteins of the SARS-CoV-2 virus from a nasal swab sample from any individual two years of age or older.” Ellume’s self-collection test was the first such test to receive an FDA EUA for use without a physician’s order. (Photo copyright: Ellume).

Are At-Home COVID-19 Tests a Good Idea?

“The more we can do simple, regular, at-home testing, the less we need it,” Mara Aspinall, Professor, College of Health Solutions at Arizona State University, told Popular Science. “It’ll become a habit, as easy as brushing your teeth,” she added.

But in “Pathologists Urge Caution on At-Home COVID Test Kits,” MedPage Today, reporting on the College of American Pathologists (CAP) March 11 virtual media briefing, pointed out downsides to at-home COVID-19 tests.

Among the issues cited were the potential for inadequate samples and improper handling to cause inaccurate results, as well as uncertainty whether at-home antigen tests will pick up on COVID-19 variants.

At-home tests also are less likely to be covered by insurance, MedPage Today reported.

During the CAP virtual media briefing, pathologist Kalisha Hill, MD (above), Chief Medical Officer and Chair, Department of Pathology and Medical Director, Laboratory Services, at AMITA Health St. Mary’s Kankakee (Ill.), said, “The gold standard is still a laboratory-performed real-time PCR test and that is the most sensitive and most accurate that we do that is very specific for COVID-19.” Hill called at-home tests a “good screening tool,” but she noted, “You’re testing that moment, that day, and as soon as you leave your home or come in contact with someone else, you could potentially be COVID positive. It’s also important to recognize that when you’re collecting a sample yourself, you may not be able to obtain enough sample for an accurate result … It’s very important how it is collected and also the sensitivity and specificity of the test,” she added. (Photo copyright: AMITA Health/LinkedIn.)

How Do the Tests’ Accuracy Compare?

The Quest Direct and LabCorp Pixel tests—both of which are sent to company labs for PCR testing—scored highest on the two main statistical measures of performance sensitivity (positive percent agreement) and specificity (negative percent agreement). According to Popular Science, each of these tests’ sensitivities and specificities are close to 100%.

According to the websites of the other tests reviewed by Popular Science:

  • DxTerity test, which uses a saliva sample—97.2% sensitivity and a 92.5% specificity.
  • BinaxNOW test—84.6% sensitivity and 98.5% specificity.
  • Cue COVID-19 test—98.7% sensitivity and 97.6% specificity.
  • Lucira Check Its test—98% accuracy.
  • Ellume test—95% sensitivity and 97% specificity.

Rapid Antigen Tests Accurate and Easy to Use, says Popular Science

Popular Science found the tests generally easy to use and concluded they are a beneficial—if imperfect—tool in the fight against COVID-19.

“If you’re unvaccinated and symptomatic, they’re a great way to confirm a COVID-19 infection without risking a trip out of the house,” Popular Science stated in its article. “If you’re unvaccinated and have no symptoms, and just want to know whether you can safely attend a family dinner or soccer game, an at-home test remains an imperfect way of self-screening. Remember: If the test comes back negative, there’s still the chance the result is false, and you could accidentally expose others by being within six feet of them without a mask on.”

As the popularity of at-home COVID-19 tests increases, clinical laboratories that perform RT-PCR tests may want to keep a watchful eye on the demand for at-home rapid antigen testing, especially now that some tests are available without prescription.

Andrea Downing Peck

Related Information:

We Vetted Popular At-Home COVID-19 Tests. Here’s What We Learned

Coronavirus (COVID-19) Update: FDA Authorizes Antigen Test as First Over-the-Counter Fully At-Home Diagnostic Test for COVID-19

Pathologists Urge Caution On At-Home COVID Test Kits

The Rapidly Changing COVID-19 Testing Landscape: Vaccines, Variants, and Health Disparities

Cue COVID-19 Test for Home and Over-the-Counter (OTC) Use

DxTerity SARS-CoV-2 RT-PCR Test EUA Summary

Ellume’s COVID-19 Home Test Shows 96% Accuracy in Multi-Site US Clinical Study

Walmart Health Opens Two Primary Care Clinics at Retail Supercenters in Chicago with Plans to Open Seven Florida Locations in 2021

Walmart may be the largest, but it is not the only retailer offering clinical laboratory testing and primary care services at conveniently-located retail stores

Earlier this month in “How Walmart Plans to Take Over Health Care,” CNBC asked, “Is Walmart the future of healthcare?” Good question. In the midst of the COVID-19 pandemic, Walmart (NYSE:WMT) managed to open six Walmart Health locations in Georgia and Arkansas. In addition, the giant retailer announced plans to open more primary care clinics at Walmart Supercenters in Chicago and Florida.

Clinical laboratory managers who struggle to keep revenues flowing should take notice. These retail clinics may not have their own medical laboratories, but their primary care physicians will be generating lab specimens.

And because Walmart offers medical laboratory tests at these locations, with so many people opting to visit health clinics installed within retail stores, independent clinical labs could see a noticeable drop in business as Walmart Health expands its network across the US.

Therefore, clinical labs near Walmart Health locations would be wise to develop strategies and services toward becoming a lab test provider to these retail clinics.

Walmart Health Eyes Florida Primary Care Market

“The past few months in particular have exposed the vulnerabilities of our healthcare system and left many without access to adequate health resources,” said Lori Flees, Senior Vice President and Chief Operating Officer, Walmart US Health and Wellness, in a blog post. “We know our customers need us more than ever, which is why we’re announcing an expansion of Walmart Health.

“We’re planning to open seven Walmart Health locations in the Jacksonville [Florida] market in 2021, with at least one opening in early 2021, and we’re beginning conversations in the Orlando and Tampa markets. Our new health centers will be in communities in need of affordable, accessible preventive care, which we will help deliver through Walmart Health,” Flees wrote.

Exterior and interior images of Walmart Health Clinic with customers sitting on a blue couch in the lobby
Walmart could be operating 22 Walmart Health locations like that shown above in Georgia, Florida, Arkansas, and Illinois by the end of 2021, Fierce Healthcare reported. This means Walmart Health may double its locations by the end of this year. Clinical laboratories near these locations may want to reach out and offer lab testing services to these retail clinics. Notice that, in the picture of the exterior of a Walmart Health clinic, “Labs” is a service that is prominently displayed as one of the important clinical services offered at that site. (Photo copyright: Walmart.)

Can Clinical Laboratories Compete or Collaborate with Walmart?

A news release announcing the opening of the Walmart Health Centers in Chicago stated that Walmart Health partners with “local, on-the-ground health providers to deliver primary care, labs, x-ray and diagnostics, counseling, dental, and hearing services all in one facility at transparent pricing regardless of a patient’s insurance status.”

However, clinical laboratories wanting to be a testing provider to Walmart Health may have to keep their costs of tests and services down in order to be competitive.

As Dark Daily reported in “Walmart Opens Second Health Center Offering Clinical Laboratory Tests and Primary Care Services,” Walmart Health’s lab test prices—in conjunction with primary care services—are low. Some of those tests include:

  • Primary care physician office visit – $40
  • Lipid – $10
  • Hemoglobin A1c – $10
  • Pregnancy Test – $10
  • Flu Test – $20
  • Strep Test – $20
  • Mono Test – $20

Walmart Health’s “Summary Price List” provides a complete list of medical laboratory tests and services offered at the retail clinics.

Other Primary Care Disruptors

Walmart is not the only retailer offering primary care services amid the COVID-19 pandemic.

Walgreens Boots Alliance (NASDAQ:WBA) partnered with VillageMD, a provider of primary care services, to open 500-700 “Village Medical at Walgreens” primary care clinics “in more than 30 US markets in the next five years, with the intent to build hundreds more thereafter,” according to a news release.

Exterior image of Village Medical at Walgreens primary care site medical clinic
By end of summer 2021, 40 “Village Medical at Walgreens” primary care sites (above) are expected to open in Texas, Arizona, and Florida, according to a January 2021 news release. Walgreens is investing $1 billion over three years in the clinics, which will be situated near its stores. “Through these conveniently located clinics at our neighborhood stores, we will uniquely integrate the pharmacist as a critical member of VillageMD’s multi-disciplinary care team to provide patients with personalized and coordinated care,” said Stefano Pessina, Walgreens Executive Vice Chairman and CEO, in the news release. (Photo copyright: Walgreens Boots Alliance.)

Meanwhile, Forbes reported that CVS Health is intent on opening 1,500 more HealthHUB locations in its stores during 2021. In “Walgreens, CVS Add New Healthcare Services and Technology to Their Retail Locations; Is Medical Laboratory Testing Soon to Be Included?Dark Daily reported on CVS Health’s pilot program to test several HealthHUB locations in Houston that would offer expanded Minute Clinic services. These services include:

  • medical laboratory blood testing,
  • health screening,
  • telehealth visits,
  • durable medical and sleep apnea equipment, and
  • wellness programs.

Clinical laboratory managers and pathologists will want to be on the alert for opportunities to forge relationships with Walmart Health, Walgreens, and CVS Health to capture new primary care-related testing business coming out of these non-traditional healthcare providers.

—Donna Marie Pocius

Related Information:

How Walmart Plans to Take Over Health Care

Two Newly Remodeled Chicago Supercenters Introduce Walmart Health

One Year In, Walmart Health is Delivering Affordable Healthcare and Expanding

Walmart Health Opens Two More Locations in Chicago

Walmart to Expand Health Centers to Florida Next Year

Walmart to Launch Healthcare Supercenters in Lucrative Florida Market

Walmart Health Expands to Florida Bringing Affordable and Accessible Care to Local Communities

Walgreens Boots Alliance Accelerates VillageMD Investment and Large-scale Rollout of Primary Care Clinics

CVS HealthHUB Openings on Track Despite Pandemic

CVS Health Debuts HealthHUB Locations to Serve Greater Houston Community

Walmart Opens Second Health Center Offering Clinical Laboratory Tests and Primary Care Services

Walgreens, CVS Add New Healthcare Services and Technology to Their Retail Locations; Is Medical Laboratory Testing Soon to Be Included?

Walmart, Quest Diagnostics, and DroneUp Collaborate on Pilot Project to Deliver COVID-19 Laboratory Tests to Consumers in Select Cities

Coronavirus pandemic expected to spur wider acceptance of drone delivery services for clinical laboratory specimens and medical supplies

Routine delivery of clinical laboratory specimens and medical supplies by drone moved one step closer to reality with news that Walmart (NYSE:WMT), Quest Diagnostics (NYSE:DGX), and DroneUp of Virginia Beach, Va., are partnering to bring at-home self-collection COVID-19 test kits to residents of several areas hard hit by the COVID-19 pandemic.

In its race to keep pace with online retailer Amazon (NASDAQ:AMZN), Walmart last September implemented two drone-delivery trials. One, according to Progressive Grocer, is with Tel Aviv, Israel-based drone company Flytrex, to deliver select grocery and household essentials in and around Fayetteville, N.C. The other trial program is with drone company Zipline of San Francisco, to test delivery of certain health and wellness products to areas around Walmart’s headquarters in Bentonville, Ark., Progressive Grocer also reported.

Then, Walmart announced a third pilot project for home delivery—one that could potentially affect clinical laboratories. This time, in collaboration with Quest and DroneUp, Walmart is piloting delivery of at-home COVID-19 collection kits in North Las Vegas, and Cheektowaga, New York, a Walmart news release stated.

Is this yet another example of how the COVID-19 pandemic will continue to drive shifts in delivery of key healthcare services? Probably.

According to Walmart’s news release, “Patients who qualify for drone delivery of the COVID-19 self-collection kits must live in a single-family residence within a 1-mile radius of the designated [Walmart] Supercenters in North Las Vegas and Cheektowaga. The kits will land on the driveway, front sidewalk, or backyard of the customer’s home, depending on where there are cars and trees. There is no delivery or kit cost for customers electing to receive an at-home [COVID-19] kit delivered via drone. Once the kits are delivered, the person will perform a self-administered nasal swab in the privacy of their home and send their sample back to Quest Diagnostics for testing using the included prepaid shipping label.”

Walmart’s home delivery service of at-home COVID-19 test kits video screenshot
Click the image to watch the short video that demonstrates Walmart’s home delivery service of at-home COVID-19 test kits. Clinical laboratories in these areas may wonder how Walmart’s new drone-delivery service will impact their own specimen delivery programs. (Photo/video copyright: Walmart.)

The giant retailer’s expanding use of drone delivery systems will likely lead to greater acceptance among consumers of unmanned aerial vehicles for delivering all sorts of personal items, as well as various types of clinical laboratory specimens. If consumers embrace drone delivery systems, clinical laboratories with existing courier and logistics networks may experience another disruption in how they do business.

In a news release following the announcement of a yet another drone-delivery service of COVID-19 at-home test kits—this time in El Paso, Texas,—Amanda Jenkins, Vice President of Operation Support and Implementation, Walmart US Health and Wellness, said, “Walmart has been serving the El Paso community throughout the pandemic with drive-thru testing sites and extended testing hours, and we wanted to provide another way to access testing that provides convenience and leverages technology, while learning how drones could impact the delivery of healthcare in the future,” KTSM-9 TV reported.

Drone Delivery Systems Worldwide for Healthcare

The United States is not the only country turning to drone technology to speed deliveries and reduce person-to-person contact during the pandemic. A World Economic Forum blog post outlined the critical role drones are playing in China, the world’s most populated country, as it responds to the health crisis.

“At the moment of life and death, the air transport network can significantly confine the flow of people, avoid unnecessary physical contact, and prevent secondary transmission,” Lv Yinxiang, Secretary of the Party Committee of the County People’s Hospital, said in the blog post. “Medical samples delivered through air can shrink the delivery time … while saving precious field resources.”

Amazon also is predicting a bright future for drone delivery of all types of goods. In August, Amazon’s Prime Air drone delivery service received approval from the Federal Aviation Administration (FAA) to operate its fleet of drones, CNBC reported. Amazon launched its drone project in 2013 and began the process of seeking FAA approval in 2019.

In “UPS Expands Drone Delivery Service for Transporting Clinical Laboratory Specimens Across Healthcare Systems to Include Delivering Prescriptions from CVS Pharmacy to Customers’ Homes,” Dark Daily reported on UPS’ plans to become a major player in healthcare’s use of drones by partnering with CVS Health to not only transport clinical laboratory specimens, but also make pharmacy deliveries to customers’ homes.

And in “WakeMed Uses Drone to Deliver Patient Specimens,” Dark Daily’s sister publication, The Dark Report (TDR), reported on UPS’ launch of a drone delivery service on the WakeMed Health and Hospitals medical campus in Raleigh, N.C. The implementation followed a two-year test period during which UPS used drones manufactured by Matternet of Menlo Park, Calif., to fly clinical laboratory specimens from a medical complex of physicians’ offices to the health system’s clinical laboratory.

COVID-19 Pandemic Drives Drone Delivery System Development

Tom Ward, Walmart’s Senior Vice President for Customer Product, predicts the drone delivery systems being rolled out during the COVID-19 pandemic will increase the use of contactless delivery for all types of deliveries, not just healthcare.

“There’s a lot we can learn from our drone delivery pilots to help determine what roles drones can play in pandemic response, healthcare delivery, and retail,” he said in the Walmart news release. “We hope drone delivery of self-collection kits will shape contactless testing capabilities on a larger scale and continue to bolster the innovative ways Walmart plans to use drone delivery in the future.”

The widespread use of drone technology appears to be soaring to new heights as the COVID-19 pandemic moves forward into the new year. Clinical laboratory managers will want to keep their eyes on the skies as this new delivery system becomes more commonplace and potentially disrupts the way laboratory specimens traditionally have traveled to and from medical laboratories.

—Andrea Downing Peck

Related Information:

Walmart, Quest Diagnostics and DroneUp Pilot COVID-19 At-Home Self-Collection Kit Delivery in Cheektowaga, New York

Walmart Adds Even More Fuel to Drone Delivery

Walmart, Quest Diagnostics and DroneUp Pilot Drone COVID-19 At-Home Self-Collection Kit Delivery in North Las Vegas

Walmart Now Piloting Drone Delivery of COVID-19 At-Home Self-Collection Kits

3 Ways China Is Using Drones to Fight Coronavirus

Amazon Wins FAA Approval for Prime Air Drone Delivery

UPS Expands Drone Delivery Service for Transporting Clinical Laboratory Specimens Across Healthcare Systems to Include Delivering Prescriptions from CVS Pharmacy to Customers’ Homes

WakeMed Uses Drone to Deliver Patient Specimens