- Amazon unveiled an online prescription marketplace and home delivery platform, dubbed Amazon Pharmacy.
- And its aggressive pursuit of pharmacy poses threats to incumbents and entrants alike.
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The tech giant unveiled Amazon Pharmacy, which offers online prescription fulfillment and home delivery of medications via the Amazon website or mobile app and will be available to consumers 18+ in 45 states.
Amazon Pharmacy accepts most forms of insurance, and uninsured Prime members can receive an up to 80% discount on meds. Prime members also receive unlimited free two-day delivery, while non-Prime customers receive free five-day delivery or the option to dish out $5.99 for two-day delivery.
Amazon’s disruption of the $312 billion pharmacy and drug stores market poses a serious threat to smaller entrants and traditional players alike. Traditional pharmacies like CVS and Walgreens can’t compete with the tech giant’s infrastructure of its online marketplace, tech resources, and reserve of users in place to pilot, iterate, and launch innovative services.
For example, Amazon leveraged its PillPack service to offer free prescriptions and over-the-counter delivery to both Prime and non-Prime consumers, and now Amazon Pharmacy settled on a model that offers free delivery options to both Prime and non-Prime consumers. The tech behemoth also casts a daunting shadow over newer entrants as it flaunts its member base of 118 million Prime subscribers—which would make it difficult for small pharmacy startups like NimbleRx to attract customers.
This launch marks yet another healthcare space Amazon plans to disrupt—far from unexpected after the myriad health-focused moves it’s made in recent years:
- Amazon has been making forays into pharma since its acquisition of PillPack. Amazon’s 2018 acquisition of the online pharmacy service laid the groundwork for Amazon Pharmacy: Since absorbing PillPack, Amazon has forged a string of partnerships with major payers like Blue Cross Blue Shield, Horizon Healthcare Services, and Medicare, and pharmacy benefit managers like Prime Therapeutics and Evernorth.
- Amazon’s voice assistant is gaining traction as a medication management tool. Alexa earned HIPAA compliance in 2019, and it has since been tapped by Giant Eagle Pharmacy for its medication management features. In March, it also launched a feature for consumers that allows them to ask questions about 1,500 of the most widely prescribed drugs in the US.
- And Amazon has been gradually scaling its employee-facing virtual health clinics via its Amazon Care program. Amazon Care’s virtual and in-person care services were first launched in September 2019 to select workers in Seattle, and the program was expanded to all Amazon employees in Washington state this September.
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