Amazon Pharmacy: Can Amazon take on Healthcare next?

Dear friends and colleagues,

We’ve made it through the first month of 2021. Give yourself a pat in the back. We deserve it.

Things are looking up – I feel more hopeful, happy, optimistic. Perhaps it is due to my baseline happiness taking a nose-dive in 2020. But hey, I cannot complain.

Arguably, one of the companies that made it out through 2020 without any scratches (in fact has gained an armor) is Amazon. Today we’re going to talk about the launch of Amazon Pharmacy and what it means for US Healthcare.

Amazon has been trying for several years in entering into healthcare, and recently it has made an announcement that its prescription drugs would be sold through its Amazon Pharmacy flagship store.

What was the big move?

• 2 years ago, Amazon bought PillPack, an online pharmacy to integrate the pharmacy into its online store

• It gave Amazon license to operate a pharmacy in almost every state

• Now Amazon pharmacy is a competitor to GoodRx and even Walgreens, CVS etc.

  

What does Amazon Pharmacy mean for Prime Patients?

• Amazon prime members (120 million in US) can enjoy 2 benefits: 1) prescription delivered for free within 2 days 2) If qualified, get discount ~80% off generics and ~40% off brand name drugs

• For those who don’t have Prime, well no luck. This is another indication of the inequalities of America’s healthcare system … but that’s another story

  

What does future of Amazon healthcare look like?

• Poses an immediate threat to GoodRx which offers discounts on prescription drugs for uninsured and underinsured patients

• Transfer of brand loyalty (to amazon) and retail convenience

• Key future advantages: could offer biologics if able to do cold storage and transportation, offer same day delivery

As we all know, Amazon is in the business of gathering information. Amazon may build enough experience with pharmacy benefits to start administering drugs themselves. Perhaps they may expand into the convoluted business of Pharmacy Benefit Managers (PBMs) – who manage prescription drug benefits on behalf of health insurers.

One thing for sure, the more convenient you can make an unpleasant experience, the better the patient experience. Amazon has taken grocery, can they now disrupt healthcare?

Moving into the future,

Katherine