A pharmacy that runs out of a drug loses the prescription. A pharmacy that overpays a supplier loses the margin. Costco put artificial intelligence (AI) on both problems.
The warehouse retailer’s pharmacy inventory system now compares prescription drug prices across vendors and “autonomously and predictively reorders inventory,” Ron Vachris, Costco’s president and CEO, said Dec. 11, 2025, on the company’s fiscal first-quarter 2026 earnings call, PYMNTS reported. The change improved in-stock levels to more than 98%, he said.
Vachris said the system played an important role in mid-teen growth in pharmacy prescriptions filled. It also improved margins and lowered prices for members, he said, though he did not give a figure for either.
In-Stock Levels Top 98% After AI Takes Over Reorders
The 98% figure comes from a system that does two jobs. It checks what each vendor charges for a drug, then places the replenishment order before the shelf runs low.
Costco has kept building on it this year. Gary Millerchip, Costco’s chief financial officer, said on the company’s fiscal second-quarter 2026 earnings call in March that Costco had added new AI tools to improve pharmacy in-stock positions.
Gasoline is the next inventory job. Costco is deploying AI tools in its gas business and expects them to improve inventory management and drive incremental sales, Vachris said on the same December call.
Gas demand has since hit records. The final five weeks of the fiscal third quarter of 2026 were Costco’s top five gas volume weeks ever, and the volume required multiple daily deliveries to many locations, Vachris said on a May 28 earnings call.
Prescriptions Filled Grow Double Digits for the Year
Prescriptions filled grew double digits in fiscal 2026 and pharmacy sales grew nearly 20%, Vachris said Sept. 24 on the company’s fiscal fourth-quarter 2026 earnings call. He credited GLP-1 and fertility programs, pickup lockers and Rx Mobile Pay Ahead. Many U.S. warehouses now see more than one-third of prescriptions paid ahead, he said.
The growth more than offset lower prices from Medicare maximum fair price changes, he said.
“When we see lower prices, we see an opportunity,” Vachris said, pointing to lower GLP-1 prices that helped drive unit growth.
Inventory is one driver among several, and Costco has not detailed AI’s impact on growth in its pharmacy department.
90% of Retailers Limit AI Agents to Look-Up Access
Costco’s pharmacy system places orders on its own. Most retailers are not ready to let AI go that far. Ninety percent of retail firms would limit an AI agent to look-up access and 5% would allow some execution with human approval, the PYMNTS Intelligence report, “Wholesale Writes the AI Playbook: How Goods Firms Are Scaling Intelligence Across the Enterprise,” found. The July report is based on a survey of 60 senior technology executives at U.S. enterprises with at least $1 billion in annual revenue.
Sixty percent of retail firms said their main five-year goal is semi-autonomous AI with human oversight, the report found. No executive surveyed expects fully autonomous AI within five years. Sixty-five percent of wholesale and retail firms plan to raise AI budgets over the next 12 months, and 40% of retail firms expect a return within one to two years.
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