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Amazon Pharmacy

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Amazon Pharmacy
Company typeSubsidiary
IndustryPharmaceutical
FoundedNovember 17, 2020; 3 years ago (2020-11-17)
Area served
United States
ServicesOnline pharmacy
ParentAmazon
Websitepharmacy.amazon.com

Amazon Pharmacy is an American online pharmacy which is a subsidiary of Amazon. The business was launched on November 17, 2020, initially offering pharmacy service only in the United States.

Launch and business model

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On November 17, 2020, Amazon launched Amazon Pharmacy.[1] The move was described as "arguably Amazon’s broadest push into the healthcare business to-date."

Amazon Pharmacy's business is based on sales. The company offers free, two-day home delivery of prescriptions to Amazon Prime subscribers.[2] Amazon Pharmacy requires customers to establish a secure pharmacy profile to manage insurance and medical information.[3] At the time of its formation, Amazon Pharmacy's operation was limited to the United States.[3] At the time of its launch, Amazon Pharmacy also announced its intention to offer a help line staffed by pharmacists and a discount program for uninsured customers.[4]

Challenges faced by Amazon Pharmacy include the need for customers to ask doctors to redirect prescriptions, customer habit in using nearby brick-and-mortar drug stores, and customer desire to speak in person with a pharmacist.[5]

Impact on existing pharmacies

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The formation of Amazon Pharmacy was expected to result in disruption of the retail pharmacy sector.[6] On the day of its launch, stock prices for competitors dropped: GoodRx by 20%; Rite Aid by 16%; and Walgreens and CVS Pharmacy by 9% each.[4] In all, drugstores, drug distributors, and health insurers lost $22 billion in market value on the day of Amazon Pharmacy's launch.[7]

An analysis from Citi Research called the announcement "a disruption to the system and competitive threat that will likely shift scripts away from the retail channel."[6] An Edwards Jones analyst opined that Amazon Pharmacy was a particular threat to smaller drugstores that lack the purchasing power of major drugstore chains.[6]

Some employers, such as 7-Eleven, began only paying for prescriptions through Amazon Pharmacy following its launch through their health insurance plan.[citation needed]

Relationship to PillPack

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The establishment of Amazon Pharmacy followed Amazon's acquisition of PillPack in June 2018 for a reported US$753 million.[8] In an interim step, Amazon rebranded PillPack in November 2019 as "PillPack, by Amazon Pharmacy".[9] With the launch of Amazon Pharmacy, the company announced that PillPack would continue to operate as a "distinct service for customers managing multiple daily medications for chronic conditions."[2]

References

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  1. ^ "Amazon opens online pharmacy with prescription delivery". CBS News. November 17, 2020.
  2. ^ a b Jordan Valinsky (November 17, 2020). "Amazon is now a drug store. It will ship prescriptions to Prime members". CNN.com.
  3. ^ a b Allison Xu (November 17, 2020). "Amazon launches Amazon Pharmacy". TechCrunch.
  4. ^ a b "How Bad Is Amazon Pharmacy for CVS and Walgreens?". Barron's. November 17, 2020.
  5. ^ Angelica LaVito; Matt Day (November 17, 2020). "Amazon Expands Push Into Health Care With Online Pharmacy". Bloomberg.
  6. ^ a b c "Amazon opens online pharmacy, shaking up another industry". Associated Press. November 17, 2020.
  7. ^ Cristin Flanagan (November 17, 2020). "Drugstores, Insurers Suffer $22 Billion Blow on Amazon Move". Bloomberg.
  8. ^ Farr, Christina (2019-05-10). "The inside story of why Amazon bought PillPack in its effort to crack the $500 billion prescription market". CNBC.
  9. ^ Garcia, Ahiza (2019-11-15). "Amazon rolls out 'Amazon Pharmacy' branding to PillPack". CNN Business. Cable News Network. Retrieved 2019-11-18.
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