Drone delivery is still in the starting gate, but with early testbeds showing positive results there's good reason to suspect regulators will become more permissive in the mid term. But should delivery include controlled substances like pharmaceuticals?
It's not an idle question. Amazon and CVS have teased drone delivery for medications, though it doesn't strain the imagination to spot glaring problems. Drone regulations will only allow drones to fly in particular areas, excluding certain populations based on geography and thus hobbling one of the primary arguments for delivering drugs via drone — namely that drones can help solve for pharmacy deserts. What's more, packages delivered by drone might be tampered with or stolen, drones can be shot down, and identity authentication will be tricky.
Underlying this push is the fact that the pharma industry needs tech innovation, yet there are very few who have been able to disrupt this giant industry. I connected with Susan Lang, Founder & CEO of XIL Health, a complex drug pricing analytics company, about the prospects of delivering medicine via drones.
GN: Who has trialed prescription delivery by drone, and what have been the results?
Susan Lang: So far publicly companies have begun pilots. CVS and UPS started in May 2020 and are using Matternet's M2 drones with authorization from the Federal Aviation Association to deliver prescription medication to residents in The Villages community in Florida.
In Ireland, the healthcare system and Irish aviation systems have allowed Manna Aero to deliver medications via drone to the elderly in Moneygall, a small Irish village. In Uganda, Johnson and Johnson are piloting a program in the Lake Victoria Kalangala District. Access to the islands is difficult, making it hard to get needed medications. The drones could offer quicker and safer transport, being more effective than even boats.
Walgreens partnered with Wing, a subsidiary of Alphabet, people will be able to have over-the-counter medicines and household items delivered to their backyards. There are so many different pilot programs going on, these are just a few of the public trials we know about.
GN: Why is the Pharma industry in need of tech innovation?
Susan Lang: When there's a retail infrastructure like in the United States and Ireland, it's the retail store that's in charge. In the case of Uganda, Johnson and Johnson as a pharmaceutical company is directly involved in the pilot program because it's direct access from them. Innovation is needed for the ease of access for consumers, it could also help avoid delays from weather or other issues.
Like disaster recovery, drone technology could help reach people in an emergency situation we might otherwise not have access to. Drone deliveries also started during COVID, as more and more companies are trying to do touchless deliveries. In the US drones could be safer and quicker to use when compared to trucks with drivers, especially with the supply chain issues that have come up. Drones can also be more sustainable in the long term, reducing the need for other forms of transportation.
GN: What are the biggest challenges ahead and where might drone delivery pilots excel while others miss the mark?
Susan Lang: Most likely companies experimenting with drone deliveries will exclude controlled substances and avoid any class two drugs because of the sensitivities involved.
One of the biggest challenges is that drone delivery won't work for every type of product, so they need to test to see when it works. For the pilot programs, going to central zip codes, not residential, they'll have to answer how to scale and deliver to individual homes in the future. What will it look like to have multiple drones going in and out of neighborhoods? They'll have to take into consideration how consumers will react to drones in their neighborhoods. Pilot programs are still figuring it out, we just don't have the answers yet.
Healthcare companies will either run the pilot programs themselves or partner with a third-party program. Part of the issues they face is having the volume to scale the program, and since it's such a new technology, they'll need big anchor clients like CVS and Walgreens to come on board. They'll have to work with the FAA to see if delivery affects any animals, people, will need to see how high they can fly the drones, where is the drone highway, etc. Drones themselves are a robust technology, but in healthcare, it's still very new and there's a lot of questions.
GN: For what environments is drone delivery best suited?
Susan Lang: One of my earlier examples, the pilot program in Uganda where it was difficult to reach and deliver, shows how drone delivery might be better suited for more rural and suburban markets right now. With urban markets, there are more risks. There is a difference in geography, of where this is going to be valuable in terms of getting packages to consumers quicker. There are only a couple of pilot programs in the pharmaceutical space, they're all new, most of them are less than a year old. It's still very new, we don't have all the results yet.
In the U.S there are two models that are emerging right now, models that are delivering to your home and then models that are delivering to a central location then driven last-mile to your home. Outside of the U.S., drones are also being used instead of boats and other transportation in areas that are difficult to deliver to. The other concern is battery life, limiting how far they can travel. Now, over time, the battery technology will improve but for right now it's limiting the delivery reach.
GN: Why will some pilots possibly not lead to adoption while others succeed?
Susan Lang: What matters in adoption of technology is finding clients that are early adopters — that's not dissimilar to any emerging technology. You're looking for folks that want a solution and are willing to look at non-traditional answers. Looking for key clients early on that can test, which is what they're doing with Walgreens and CVS, helps ensure more success early in the program. Otherwise, it will be a slow painful adoption process. Pilot programs are a chance to figure out all the ways the program can fail and fix them early on. Critical thinkers are trying to find the faults now to improve the technology sooner, giving them more potential for success.
Drones are not necessarily inadequate, rather delivery services might need a multi-pronged approach. They need to have other things in place to ensure patients and consumers get timely access, drones are not the only approach. The issues that could arise are still unknown with drone technology. The FAA is still developing its own drone highway to ensure it doesn't interfere with other flying devices. There are still a lot of questions on if they can be hacked and diverted.