It is staggering how far and how fast the business of prescription dispensing has come! Pharmacy filling practices have changed from drug compounding in the early 1920s to pre-manufactured medication dispensing in the 1960s and 1970s. Medications went from being available only at request to being stocked in extensive inventories.
The evolution of prescription filling continued with mass-tableting and capsulating methods in the 1960s to the modern day, moving from strictly dispensing medications to offering clinical consultation and patient counseling. Today’s local neighborhood pharmacy practice largely follows this format.
However, as the need for pharmaceuticals has skyrocketed in recent years, pharmacies have acquired sizable and expensive inventories. The massive cash investment required, combined with costly labor shortages, and the evolution of transportation/shipping and automation, have ushered in more efficient prescription filling models. One compelling solution has been highly automated central filling and mail order pharmacy models.
Central Filling and Mail Order Pharmacies
What are Central Filling Facilities?
Central filling is the practice of processing prescriptions in a warehouse or closed-door pharmacy rather than a local pharmacy. Large chain pharmacies today commonly use this strategy to dispense refilled prescription medications (non-acute).
The filling process model is logical, efficient, and economical: a local pharmacy receives a prescription, decides whether it’s an acute/short-term medication need or a maintenance medication, and thus on a regular refill schedule. If it is the latter, the pharmacy forwards the script to the central fill location. This closed-door facility processes the prescription via automated processes and ships it back to the local pharmacy within 24 hours for patient pickup.
Chains use this strategy to simplify logistics, setting up a radius of “spoke” pharmacies in one region and placing the warehouse central fill in the “hub”. The warehouse serves only those chain locations, some within a drivable 100 miles and others across several states.
Central filling has proven success:
- Alleviate workload
- Decrease patient waiting times/heighten customer satisfaction
- Contribute to greater accuracy and reduced overall costs
- Enhance pharmacy workflow
- Drive better patient outcomes
- Contend with the rapidly changing environment – and its financial pressures – surrounding chain pharmacy
Due to its many benefits to patients and businesses alike, chain pharmacies strive to maximize efficient refilling; chain pharmacies operating a central filling model have the capability to fill up to 50% of maintenance prescriptions at their centralized facilities.
Role of Mail Order Pharmacies
Where central filling pharmacies operate by geography, mail order pharmacies are traditionally driven by insurance coverage. Instead of picking up a prescription from a local pharmacy, the patient’s prescription runs through insurance and a pharmacy benefits manager, processes via automation at a mail order pharmacy, and is delivered to the patient’s doorstep.
The process circumvents a physical brick-and-mortar pharmacy and allows insurance companies to promote medication adherence. It’s also a highly efficient system with substantial savings. Mail order pharmacies can provide patients with numerous benefits, including convenient home delivery, online ordering of prescription refills, and a longer supply than at a community pharmacy (e.g., 90-day fills are common in mail order versus 30-day fills).
Compared with community pharmacies, the total costs at mail order pharmacies may often be lower for patients. Hence, there is continual growth in mail order pharmacy prescription filling. In 2010, mail order accounted for 10% total prescriptions in the United States; a decade later, that number was almost 16%. Volume-wise, mail order pharmacies have the capacity to fill an incredible volume, upwards of 100,000 prescriptions daily.
Benefits of Centralization in Pharmacy for Maintenance Medication Prescriptions
One of the benefits of centralization is pharmacy inventory reduction, especially for chain pharmacies. A local pharmacy no longer must own and stock thousands of medications, resulting in substantial savings in overhead costs.
Centralization is also more efficient. Almost all medications can be diverted to a local warehouse with pharmacy automation, significantly decreasing pharmacy labor costs and requirements. Patients taking multiple maintenance medications can have their refills synchronized so all prescriptions arrive at the local pharmacy for pickup at the same time. This results in faster patient turnaround, fewer trips back to the pharmacy, and a more in-depth consultation with the local pharmacist at pickup time.
Pharmacy Industry Trends in Central Filling
Pharmacy centralization is a growing market, expected to expand at a compounded annual rate of 11.3% by 2028. Small to midsize chains, large hospital systems, and even independent multi-store owners are moving toward centralization for refills.
Large integrated delivery networks (IDNs) are also increasingly creating specialty pharmacies. IDNs are organizations that own and operate a network of healthcare facilities. These central pharmacies allow healthcare providers to circumvent barriers to access and better coordinate care across multiple sites.
Efficiency gains and cost savings are leading the shift to centralization. With tight margins and labor challenges, pharmacies can optimize central and mail order automation systems and see a faster turnaround, less cash investment in stock, and fewer labor constraints.
The Scale of the Pharmacy Industry
Pharmacists filled 6.7 billion prescriptions in 2022 in the United States alone, representing a part of the largest global market. Globally, the pharmaceutical industry is enormous, valued at $1,587 billion in 2022, and expected to grow.
Outside the United States, the Netherlands is a shining European example of the progressive adoption of central filling. Beginning with a major overhaul of the country’s health services, including medication delivery methods in the early 2000s, Dutch pharmacies now fill 70% of repeat prescriptions via a hub and spoke model, with proven significant reductions in local pharmacy cost, onsite labor, and Rx filling errors.
The magnitude of the pharmacy industry means that organizations and pharmacists must adopt cutting-edge technologies to keep up with demand and maintain efficiencies. Automation is one of the major enablement levers.
The Role of Labor and Automation
Labor shortages are a critical issue, driving migration to automation. With continual evolution, stakeholders can optimize operations and increase efficiency.
Labor Challenges Driving Migration to Automation
A 2022 survey found that 76% of community pharmacies struggled to fill positions in late 2022. On top of that, demand for pharmacists will increase by 3% over the next decade. These long-term staff shortages are straining pharmacies across the board.
One of the solutions to managing staffing shortages is to embrace prescription-filling innovations. Automated central filling and mail order pharmacies can handle high-volume dispensing at high speeds, simultaneously relieving the pressure from labor constraints and increasing turnaround time.
Robotics, interconnected software systems, and now artificial intelligence in central fill pharmacies automate most tasks such as inventory management, counting, labeling, packaging, record-keeping, and shipping of medications (from bulk tablets and capsules to unit-of-use packaging). With automation in a centralized location, pharmacies at the local level can redeploy existing staff to profit-generating and patient-centered tasks, improving efficiency and quality outcomes.
Evolution of Automation Tech
Like pharmacy practice as a whole, automation tech for high volume pharmacies has evolved. Its advances are largely driven by the goals of human error reduction, cost containment and FTE reduction, escalating daily order volumes, speed, and better inventory management. Centralized pharmacy automation designers in the past often relied on integrating Rx filling devices more suited to brick-and-mortar retail pharmacies (e.g., daisy-chaining multiple retail pharmacy dispensing robots that each hold 100-200 medications).
Modern design philosophy has shifted away from that hybrid approach. Designing from the ground up with specialized central fill/mail order counting technology, instead of cobbling individual retail pharmacy technologies, addresses the unique large-scale needs of central fill or mail order in a warehouse-size layout, dispensing hundreds to thousands of NDCs/DINs via complete conveyor systems.
Also driving technology, pharmacies saw a skyrocketing number of drug shortages in 2023, requiring strict operational and clinical inventory management.
As automation expands from simple counting and filling machines to central technology, pharmacies can create complete systems that automatically manage manual tasks using rule-based design, AI, and robotic applications.
Implement Cost-Effective Prescription Filling Methods With Capsa Healthcare
The pharmacy industry is vast; the United States is approaching 7 billion prescriptions filled annually. Pharmacies have historically held extensive inventories to serve their hometown patients, but the overhead and investment costs, labor challenges, and advancements in automation are driving rapid change. Staying current on industry trends and adopting cutting-edge technologies that minimize inventory requirements and relieve labor constraints is essential.
Automated central fill and mail order design, a specialty of Capsa Healthcare’s Pharmacy Automation Group, has proven to be a cost-effective approach to transforming chain, hospital and, mail order pharmacy operations. Learn more about Capsa Healthcare’s high-volume pharmacy prescription systems.