Amazon Pharmacy

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

Amazon Pharmacy
TypePrivately held company
IndustryPharmaceutical
Founded2020 (2020)
Area served
United States
ServicesOnline retailer
ParentAmazon.com
Websitepharmacy.amazon.com

Launch and business model

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 online sales. The company offers free, two-day home delivery of prescription 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

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]

History and relationship to PillPack

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
  1. "Amazon opens online pharmacy with prescription delivery". CBS News. November 17, 2020.
  2. Jordan Valinsky (November 17, 2020). "Amazon is now a drug store. It will ship prescriptions to Prime members". CNN.com.
  3. Allison Xu (November 17, 2020). "Amazon launches Amazon Pharmacy". TechCrunch.
  4. "How Bad Is Amazon Pharmacy for CVS and Walgreens?". Barron's. November 17, 2020.
  5. Angelica LaVito and Matt Day (November 17, 2020). "Amazon Expands Push Into Health Care With Online Pharmacy". Bloomberg.CS1 maint: uses authors parameter (link)
  6. "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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