Costco is partnering with Instacart to test free delivery of prescription drugs to members, people familiar with the matter told CNBC. The initial pilot will be limited to California and Washington state, and includes options for both home and office delivery.
Delivery will be free on orders of $35 or more, not including a tip that is set at 5% of the order price. The fee varies for smaller orders based on the speed of delivery, with the cost usually remaining under $10. Customers will receive updates on their orders via text message, mirroring what Instacart offers for grocery orders.
Once a delivery is made, shoppers will need to show proof of identity and confirm their birth date to ensure they are over age 18. Delivery workers will be required to pass HIPAA certification training to ensure that they’re aware of the rules around sensitive health information.
The move could help Costco pharmacies compete with CVS and Amazon. By April 2019, CVS offered same-day delivery at 6,000 stores, a year after the retailer launched its one-day and next-day delivery at all stores. Amazon acquired PillPack in June 2018 to make its own entry into the pharmaceutical space.
Walmart and Walgreens both offer prescription delivery services as well, but neither company has made moves to offer free same-day options. However, it may only be a matter of time before they become available: Walmart already offers free next-day delivery on orders over $35 for select products, while Walgreens offers next-day shipping with FedEx and is experimenting with drone delivery.