This link (via Gayle D.) is pure awesome. Turns out someone has decided to offer prescription drugs via an ATM. For policy wonks, this has all the hallmarks of a disruptive innovation.

I suspect that in the pharmaceutical industry the 80/20 rule is in effect. That being 80% of  patients are using only 20% of the available drugs. So a small number of drugs account for the vast majority of all prescriptions filled. That means you could service a huge part of the market with only a handful of drugs on hand.

This is precisely what this ATM for drugs allows you to do. Moreover, it allows you to do it faster, cheaper and with a better experience for customers. That is precisely what a disruptive innovation is.

Indeed, you can see the early signs of its disruptive nature in the way it is being talked about.

The Canadian Pharmacists’ Association has endorsed the machine, but it appears oblivious to the machine’s implications (despite the very clear case study of the decline of bank tellers after the introduction of ATMs – although perhaps the idea of pharmacists comparing themselves to bank tellers is so threatening that they ignored that data):

Some pharmacists will undoubtedly feel threatened by the technology, says Jeff Poston, executive director of the Canadian Pharmacists’ Association.

But he predicts the machines will have only a niche role, likely in remote communities that have limited pharmacy services, since the devices offer patients a “lesser” form of communication with the druggist.

“I tend to think the face-to-face encounter with the pharmacist would win hands down,” he said.

Niche role? I suppose, if you count 80% of the pharmacy business as niche. I suspect this service will take off – and we’ll need fewer pharmacists. On the flip side, the pharmacists we keep will have to very good since they’ll be focused on the more dangerous, complicated and difficult prescriptions – which really is the best use of their time.

What about people’s alleged preference for face-to-face encounters? Perhaps this is a preference. But how strong is that preference? For me, it isn’t so strong that I’m willing to hang around in the pharmacy for 30 minutes while my prescription is being filled, or worse, to come back they next day. I suspect that the overwhelming majority of us will use the ATMs – just like we do at the bank.

Indeed, the president of the company that creates the ATMs for drugs – who is quoted later in the article – knows what’s really going on:

Just over 800 patients used the machines at Sunnybrook to obtain 1,200 prescriptions between June and September. A survey of 108 of them indicated that more than 95% received their drug in less than five minutes and would use PharmaTrust again, said Peter Suma, president of PCA. None of the prescriptions was incorrectly filled, he said.

Not everyone, however, was able to take advantage of the pharmaceutical ATMs. About a third of patients who tried discovered that their medicine was not available, said Dr. Domb, though PCA offers to deliver those orders to the patient’s home the next day.

Despite such limitations, Mr. Suma predicts his kiosks will be embraced by consumers accustomed to instant, technologically aided service, especially when the devices are “deployed ubiquitously.”

95% satisfaction rate? This technology is killer. And check out the different perspectives of the two quotes.

On the one hand, the industry expert and entrenched actor (the pharmacists association executive director) believes the ATMs will be restricted to a niche market (such as rural markets). In contrast, the disruptor (the president of PCA) sees these machines as being “deployed ubiquitously.”

They can’t both be right.