Pharmacies are in a tougher position than other retail sectors regarding last-mile orchestration. In addition to the logistics surrounding orchestration, they also need to navigate a complex regulatory landscape and ensure the safety and integrity of their products at every step of the supply chain.
The logistical challenges are immense, from temperature-controlled storage and transportation to strict delivery timeframes and documentation requirements.
The stakes couldn’t get higher. A missed delivery or a compromised product could seriously affect patient health.
We sat down with Amy Leachman, our Director of Enterprise Accounts, and Courtney Catron, a senior account executive with years of experience in the supply chain industry, to discuss how companies in pharmaceutical and medical supply/devices can meet these compliance requirements while also fulfilling their customers' wants and desires.
Let’s explore what these two logistics experts had to say.
Challenges and Considerations in Pharmaceutical Supply Chain Logistics
For decades, the pharmaceutical industry operated on a “just-in-time” inventory approach. Pioneered by Toyota, this approach meant keeping inventory in line with demand and no higher.
While this approach has worked and continues to be relied upon in the automotive industry, the last few years have highlighted how complicated and easily disrupted the pharmaceutical supply chain is. This has cascading effects all the way down to your local pharmacy or hospital.
One of the most significant issues is the concentration of supply among relatively few manufacturers of many drugs. This increases vulnerability to disruptions, as changes by a single company can immediately and significantly tighten supply. Stockpiling inventory isn’t a solution due to expiration dates or high carrying costs for expensive specialty drugs.
When you add in additional macro forces such as geopolitical tensions, the complexities of drug pricing, manufacturing incentives, and the role that various intermediaries (like Pharmacy Benefits Managers) play in the process, you've got a perfect storm.
As Amy put it, “You're seeing a natural shift into how people are receiving their medicine and what they're willing to research and understand. “How can I get it quick? How can I get it efficiently? And how can I get it most cost-effectively?” She continued to point out the big opportunity to allow patients to research and understand how they can get their drugs when and where they need them.
Yet these supply chain challenges have caused a mismatch between how companies produce medications and patients’ needs and wants—and the parties stuck in the middle of this process end up being the pharmacists, hospitals, and other healthcare systems.
Complexity in Logistics
Pharmacists aren’t exactly the first group that comes to mind when thinking about who should be solving these deep-rooted logistics issues. They’ve spent years training to dispense medications and counsel patients, not oversee complex supply chain operations.
Yet pharmacists are often forced into this position if their organization wants to provide an elevated experience in last-mile delivery orchestration.
"You're now asking pharmacists to take on a whole new role,” said Courtney, “[The pharmacists’] job has been to fill prescriptions, and now you're asking them to run a logistics company, and that's not their background, and they don't have time for that."
It’s not about the time pressure. Pharmacists have long been dealing with strict delivery timeframes. Certain medications, like live vaccines and radiopharmaceuticals, must be administered within a specific window or handled in exact detail after being compounded.
But simply handing these off to a delivery service provider and calling it a day isn’t possible (or legal). “You have PII that you have to take into consideration. You have to take into consideration how quickly that item was picked and packed and then paid for,” Amy said.
The complexities mount when you start to think about other types of medications. As Courtney put it, pharmacists are always mentally processing different aspects of the medication they provide. They might be asking, "Is it a refill? You're dealing with a high volume of regular prescriptions. Is it a narcotic? Is it something that needs to be scheduled and have a nurse to facilitate [administration]?"
With so many details already within their day-to-day, adding an additional layer of last-mile logistics can increase strained pharmacies.
As many organizations have found, the solution is applying the right technology to reduce decision fatigue, free up time, and allow pharmacists to focus on providing the best quality of service to patients.
Improving the Experience of Customers and Pharmacists Alike with Technology
Whether in a retail pharmacy or a wholesale distributor, pharmacists often work long days and might not even get a lunch break.
“Technology really alleviates [the stress on pharmacists and pharmacy techs] and gives them time to be refreshed and [take that lunch break],” Amy said, “It's not a job that you're sitting down at a computer every day. You're on your feet. You're moving scripts, you're answering phone calls, you're delivering prescriptions.”
Believe it or not, there are still pharmacies that use a literal little black book to deliver prescriptions, and that's how they make sure they're dotting their I's and crossing their T's.
Using an omnichannel fulfillment platform to manage the last mile can "give that power back to the company to be able to help reduce their costs, but without having to orchestrate that on their own.” Courtney said, “Because if they're doing that on their own, it's multiple API integrations. You're having to work with multiple companies. You have to go between systems and have consistent systems integrate into each other. Delivery Solutions’ whole point is to continue to simplify for our customers while being able to give choices to their end consumers and how they would like to receive their items."
Despite the opportunity to streamline workflows, it’s not as simple as implementing a new platform and flipping a switch. There remains a significant amount of work from a change management perspective.
As Amy noted, “You're handing [medication] off to someone that is not necessarily the same person that has picked it up over the last 10 years. So there's a lot of change management then within the pharmacy of how do we make this happen and how do we trust?”
After all, trust is vital because these medications are not just nice to have. “This is a must-have. This has to be delivered on time. This has to be delivered not just in the contractual SLAs within different carriers' contracts,” emphasized Amy, “This essentially could be life or death when we think about people's medication."
Meeting and managing customer expectations and needs is another important factor to consider. “One hospital might do it one way, just like one pharmacy might do it another, but the customer has the expectation or has that Amazon effect of “I need to get it when I want it because I can get anything else that way”, notes Amy “And so that's what Delivery Solutions is really trying to aim to do is giving that autonomy back to the retailers and the health systems.”
While the pharmaceutical industry as a whole has some challenges to overcome, some players are showcasing what technology can do.
For years now, CVS has been offering delivery of select drugs out of their 10,000 locations. “Actually, through COVID, they were delivering or helping deliver thousands of drugs on a daily basis because of their proactive technology-first approach,” Amy recalls.
Even smaller “mom-and-pop” pharmacies are increasingly able to offer similar services through DoorDash, Instacart, Uber, or other Delivery Service Providers (DSPs). “Technology kind of levels the playing field, being able to give smaller companies or perhaps companies that don't have brick and mortar, the ability to do the same things as the big enterprise organizations”
These are just some of the major changes over the last five years, but there is still immense potential for growth and improvement, which we’ll dive into next.
Trends and the Future of Technology-enabled Pharmacies
Implementing the right last-mile orchestration platform serves as an antidote to the reactive nature of operating from a just-in-time inventory management perspective.
“It's not [the pharmacist] looking in their little black book anymore to call up a carrier to say, “Hey, I need this tray moved from hospital one to hospital two.” Amy noted, “It's more systematically using the application to be able to schedule and plan and understand. It’s being able to take the technology and say, ‘I'm going to proactively plan.’”
The ability to plan means harnessing the power of data to understand what’s working and what’s not in your organization. That means asking yourself, as Amy says, “Is there data out there that would be able to make a better decision based on the service level of a delivery provider? You can determine who the best DSP or DSPs are for your business based on all types of information, based on the type of prescription it is, based on where it's going, based on actual performance data.”
It’s not just standalone pharmacies that are dealing with these changes. Brick-and-mortar and online pharmacies are only a subset of businesses that need to receive and distribute medications. That list includes long-term care facilities, hospitals, clinics, and more.
“When you’re talking about a “B2B-type” of delivery orchestration, you’re not just dealing with [immediate needs and same-day delivery]. You're also doing runs and sweeps, and you're regularly going to the same facility.” Courtney observed, “That's also where the relationship between the nursing staff and DSPs becomes critical, so they know, “Okay, I have to go to the third floor to be able to distribute, to deliver these drugs.”
This becomes extremely important in long-term care because if someone moves between that facility and a hospital, that medication can be put on hold and restarted as soon as they’re back in the facility.
.png?width=700&height=700&name=Social-1%20(1).png)
“Everything becomes very, very sensitive and timely, and it's really important to have that communication so the staff knows when it's arriving, and that everything's running smoothly,” Courtney said.
Amy and Courtney also want to seamlessly transfer information from a hospital to a rehab clinic to a home.
“I would like that after you see the doctor, to never go to the pharmacy. Like when I'm sick or my children are sick, I want to just go home,” explained Courtney, “And if it's telehealth, I want to stay at home. And then I would love to say, ‘Okay, here's my prescription. By the way, I also want to get some over the counter so I can get some, you know, Tylenol, aspirin, and maybe some chicken soup and ginger ale,’” and then have that delivered to her house.
We might not quite be there yet, but if the rate of change over the last five years is any indication, we’re quickly approaching it.
Improving Last Mile in for Pharmacies
As the pharmaceutical industry evolves, technology will play an increasingly critical role in enabling pharmacies to meet the growing demand for convenient, safe, and reliable medication delivery.
By leveraging advanced logistics platforms, analytics, and automation, pharmacies can streamline operations, reduce costs, and enhance the customer experience.
However, success will require more than just blind adoption of the latest software. It will require close partnerships between pharmacies, technology providers, and logistics partners to drive innovation and improve patient outcomes.
As Courtney puts it, "[The key] is partnership. It really is. And being able to be flexible and having a highly configurable system and regularly hearing what our customers are saying and working with them as a partner, because when they succeed, we succeed. And that's really what we want to do and what [Delivery Solutions] is here to build."