October 23, 2019

The drones are coming: CVS, Kaiser, and more are teaming up with UPS for drone deliveries

Daily Briefing

    The United Parcel Service (UPS) on Monday announced it is expanding its drone medical supply delivery project to include AmerisourceBergen, CVS PharmacyKaiser Permanente, and the University of Utah health system.

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    Background

    In March, WakeMed Health & Hospitals in North Carolina, UPS, and the drone company Matternet teamed up to test whether drones could help providers speed up the process of transporting lab samples to and from medical facilities. For the pilot program, the Federal Aviation Administration (FAA) authorized WakeMed Health & Hospitals to use commercial drones to transport lab samples from WakeMed's medical park to the hospital's main building for lab testing.

    The drone, Matternet's M2 "quadcopter," is equipped with a secure box that contains the vials of blood or other lab specimens. The drone can carry medical samples of up to five pounds as far as 12.5 miles. Dan Gagnon, vice president of UPS' health care and life sciences group, said early data from the project shows WakeMed's short-distance deliveries decreased delivery time from 19 minutes to three minutes.  

    FAA earlier this month authorized UPS to create a subsidiary called Flight Forward to serve as an "air carrier," allowing UPS to expand its medical delivery project.

    UPS announces new drone partnerships with health care companies

    UPS on Monday announced the company now is partnering with:

    • AmerisourceBergen to use drones to transport pharmaceuticals, supplies, and records to qualifying medical campuses;
    • CVS to use drones to transport prescription drugs and retail products from CVS stores to the customers' homes beginning in the coming weeks in one or two U.S. cities;
    • Kaiser Permanente to use drones to transport medical supplies between buildings at a number of medical campuses; and
    • University of Utah Health's hospital campuses to use drones to transport biological samples, documents, health care supplies, and medical instruments between their facilities by the fourth quarter of 2019.

    According to Axios' "Vitals," it is unclear how many drones UPS' medical delivery project will involve overall.

    It also is not clear whether UPS will be permitted to expand medical deliveries to consumers' houses on a large-scale basis. Current federal regulations restrict residential drone deliveries to test environments, such as the cities where UPS will begin testing prescription deliveries via drones under its new partnership with CVS.

    UPS has said it is working with the federal government to expand the current regulations and verify primary and alternative routes to residences. Gagnon said, "Business-to-consumer moves will come, but the regulations have been easier to comply with for business-to-business moves."

    FAA is not expected to release regulations on how to use drones in U.S. airspace until 2021.

    Could other companies follow UPS?

    Other companies, including Amazon, also are considering expanding into the drone delivery industry, "Transformation Hub" reports.

    But Jamie Kowalski, a supply chain consultant, said he has concerns about increased drone costs, hackings, and traffic, as well as intercepted drones, identification verification methods, drone tracking methods, and weight and size limitations. "Each transaction may be efficient, but the volume could add up with patients who are on 13 different drugs," he said (Baertlein, Reuters, 10/21; Owens, "Vitals," Axios, 10/22; Kacik, "Transformation Hub," Modern Healthcare, 10/21).

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