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CVS partners with UPS on drone delivery of drugs and retail products

"Three dimension" delivery service ramps up competition between CVS, Walgreens, Amazon and others.

Susan Morse, Senior Editor

United Parcel Service and CVS Health have signed an agreement to explore drone delivery options, UPS announced Monday.

The program will include delivery of prescriptions and retail products to the homes of CVS Pharmacy customers from its retail stores.

UPS said its Flight Forward is the only company approved to operate a drone airline by the Federal Aviation Administration. The FAA granted approval on September 27.

WHY THIS MATTERS

Competition in the prescription drug space is steep.

UPS can now compete with FedEx, Amazon and others in the development of drone delivery services.

Last week, Alphabet's drone delivery arm Wing began delivering goods for FedEx Express, Walgreens and a small retailer in a pilot program based in Christiansburg, Virginia. The companies said it was the first scheduled commercial residential drone delivery service in the U.S., according to The Wall Street Journal. Residents participating in the trial can also order health and wellness products from the Walgreens Boots Alliance pharmacy chain.

THE LARGER TREND

UPS said the CVS alliance has other potential uses, including business-to-consumer operating models.

Since March, UPS Flight Forward has been in the business of delivering medical samples by drone at WakeMed Hospital in Raleigh, North Carolina. It plans to expand the use of drones to deliver medical samples and supplies on hospital campuses in Utah and elsewhere.

The parcel carrier is also planning a drone logistics project with Kaiser Permanente to examine how drones can help move supplies between buildings at the health system's 39-hospital network, the WSJ report said.

ON THE RECORD

"We're always looking to improve convenience for customers through faster, lower-cost and more efficient delivery models," said Kevin Hourican, president of CVS Pharmacy. "Given our focus on innovation, we're excited to be the first retail health care company to explore drone delivery options with UPS."

"As the country's first fully-certified drone airline, UPS Flight Forward is rapidly building a robust customer base and a network of technology partners to galvanize our leadership in drone delivery," said Scott Price, UPS chief strategy and transformation officer. "We will create new logistics and delivery solutions no one has ever considered. Previous industry thinking had been limited to only ground transportation technology. Now we're thinking in three dimensions."

Twitter: @SusanJMorse
Email the writer: susan.morse@himssmedia.com