For the time being, CarePass is just a pilot that CVS is running in Boston. If it succeeds, the company will likely take it nationwide. (Photo: AP)
CVS is making a bold move to try to prevent pharmacy customers from migrating to online retailers, notably Amazon.
The pharmacy giant has introduced a new Netflix-style prescription drug membership, CarePass, that will deliver your prescriptions to your doorstep for free, along with whatever else you typically get from CVS: Cheetos, Mountain Dew, the National Enquirer etc.
In addition to the free delivery, the $5 a month membership gets you a 20 percent discount on CVS-branded products and a monthly $10 coupon.
For the time being, CarePass is just a pilot that CVS is running in Boston. If it succeeds, the company will likely take it nationwide.
“We want this to expand nationwide,” CVS President Kevin Hourican tells CNBC. “But we also want to make sure we are ready and prepared and that when we do roll it out nationwide, the program is one that customers can have a great experience with.”
For years, online retailers have been cutting into the non-pharmacy business that account for a large chunk of drug stores' revenue. It is only recently, however, that even the pharmacy business is coming under attack from online alternatives.
Amazon, for instance, recently purchased PillPack, the online pharmacy that is aimed squarely at the most prolific drug-store customers: people who take five or more prescriptions a day. It offers an online platform that is supposed to make it easy for customers to track their medication and order refills, which are delivered to their door.
CVS not only stands to lose these customers' pharmacy business, but much of their general retail spending as well, since they may stop depending on their weekly prescription run to pick up other essentials. They might start buying their toothpaste from Amazon.
CVS is also in the midst of a deal to acquire insurance giant Aetna for $69 billion, making it the first “triple threat” health care player, since it offers pharmacy, pharmacy benefit management and insurance.
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