6 ways Amazon could disrupt the pharmacy business


With the retail giant's foray into the U.S. grocery market in June through its acquisition of Whole Foods, experts suggest Amazon's entrance into the pharmacy market is not far behind, despite the company's refusal to comment on its growth prospects, according to Bloomberg.

Speculation regarding the retail giant's move into the pharmacy business has received mixed reviews. While some drugmakers welcome the move, other healthcare industry heavyweights expect the company to face many significant barriers to entry.

Here are six ways Amazon could disrupt the pharmacy market, according to Bloomberg.

1. Expedited shipping could eliminate the middleman. Amazon's massive logistics operation would easily allow the company to create a mail-based drug delivery business, eliminating the need for consumers to head to drugstores or distributors to pick up medication, according to the report.

2. Offer medication at a much cheaper price. The company could use its massive buying power to offer significant discounts on brand-name and generic drugs, which would appeal to uninsured patients. To break into the market for insured patients, Amazon could negotiate with insurers and encourage them to consider mail-based drug delivery.

3. Set up pharmacies in Whole Foods locations. With the addition of Whole Foods, Amazon also has the physical space to set up pharmacies or pick-up points, in addition to mail-based delivery. The retail giant could also potentially partner with local independent pharmacies, the report states.

4. Acquire a pharmacy benefit manager like Express Scripts. Instead of partnering with local pharmacies, Amazon could also acquire a drug distributor, PBM or specialty pharmacy operation. However, entering into an exclusive partnership with a PBM like Express Scripts may cause competitors to ban their plan members from filling prescriptions at Amazon or its pharmacy locations.

5. Launch its own startup. Amazon maintains wholesale distribution licenses in at least 12 states and has the ability to potentially build a pharmacy business from scratch, effectively restructuring the drug supply chain process, according to the report.

6. Allow consumers to shop for and refill prescriptions using Alexa. One of Amazon's first priorities will most likely be to improve the consumer experience for patients shopping for medication by allowing them to purchase or refill their prescriptions using their voice-activated assistant device, Alexa, Bloomberg reports.

To read the full report, click here.

Copyright © 2024 Becker's Healthcare. All Rights Reserved. Privacy Policy. Cookie Policy. Linking and Reprinting Policy.


Featured Whitepapers

Featured Webinars