I’ve been a Costco member for about 20 years. And when I first signed up, my warehouse trips were pretty predictable.
I’d stock up on bulk groceries, grab a few household essentials, and somehow leave with far more snacks than I ever intended to buy.
Over time, though, Costco became much more than a place to buy giant jars of peanut butter and paper towels.
I’ve purchased tires, used Costco for home services, booked travel, and increasingly relied on its pharmacy.
That’s part of a larger shift happening across the retailer as Costco continues turning its membership into something that delivers value well beyond the warehouse shelves.
The company’s latest earnings show that strategy is paying off — especially in its pharmacy business, where Costco is expanding services while giving members more ways to save on prescription medications.
Costco’s pharmacy business keeps adding value
During Costco’s third-quarter 2026 earnings call, CFO Gary Millerchip highlighted pharmacy as one of the company’s strongest-performing ancillary businesses.
“Pharmacy led the way and saw significant market share gains in the quarter,” Millerchip said.
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He added that several factors are driving that momentum.
“These include increased GLP-1 demand, and inclusion of Wegovy and Ozempic in our Member Prescription Program, great value on pet medications, acceptance of Medicare D over-the-counter flex cards, and expansion of our mail order and specialty pharmacy offerings,” Millerchip said.
Each of those initiatives addresses a growing consumer need.
Demand for GLP-1 medications continues to climb, with the percentage of U.S. adults who currently take GLP-1 medications for weight loss rising from 3% in 2024 to 11% in 2026, according to Gallup.
Mail order pharmacy services have also become increasingly popular among consumers looking for convenience and automatic refills.
A 2025 JD Power survey found that customers were more satisfied with mail order pharmacy services than in-store service, Pharmacy Times reported.
For pet owners, meanwhile, Costco’s pharmacy is often another overlooked benefit. Many common pet medications are available at prices that often compare favorably with veterinary offices, creating another opportunity for members to save.
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A focus on pharmacy makes sense for Costco and its members
Costco’s push for expanded pharmacy services is a smart play because prescription medications generate recurring visits.
Customers filling monthly prescriptions are more likely to stop by the warehouse regularly, where many inevitably purchase additional items during the same trip.
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Mail order pharmacy expands that relationship even further by keeping Costco connected with members, even when they don’t visit a warehouse.
From a business perspective, health care also fits naturally into Costco’s membership model.
The company doesn’t have to maximize profits on every prescription. Instead, offering competitive pricing and convenient services helps strengthen the overall value of a membership, increasing the likelihood that customers renew year after year.
Given that membership fee income totaled $1.37 billion during Costco’s most recent quarter, that right there is a win.
And for members, the benefits are straightforward.
Whether it’s access to popular GLP-1 medications, lower-cost pet medications, Medicare Part D over-the-counter flex card acceptance, or expanded mail-order and specialty pharmacy services, the warehouse club is making health care more convenient while potentially lowering out-of-pocket costs.
That’s a win for shoppers looking to stretch their health care dollars, and it’s also smart business for Costco.
Every additional service that saves members time or money makes the annual membership feel more valuable.
In an increasingly competitive retail environment, that’s exactly the kind of advantage that helps Costco keep customers loyal long after they’ve filled their shopping carts.
Maurie Backman owns shares of Costco.
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