Amazon making a move?


Amazon may be getting in touch with US pharmacy industry players in moves to enter the pharmaceutical market

Analysts at investment bank Leerink Partners have spoken with pharmacy executives, reports Axios, and said that Amazon.com is in talks with mid-size pharmacy benefit managers.

Pharmacy benefit managers – such as the giant Express Scripts, CVS Health and UnitedHealth Group – work between insurers/Medicare and other health plans, and medication sellers, creating the formulary lists which allow or deny access to different drugs.

Amazon’s reported contact with the managers has been “in an effort to get into various contract arrangements,” says Axios.

It says Amazon may take a look at going into mail-order pharmacy, starting with a potential customer base of uninsured Americans and/or people who pay high cash prices for prescription medicines as a result of having high insurance deductibles.

These conversations indicate that Amazon is now heading in this specific direction, Axios hints.

But it also says that “the country is a long way from Amazon handling people’s prescriptions, if that time even comes”.

According to the pharmacy executives who talked to Leerink Partners, Amazon would not be able to secure the necessary drug licensing arrangements in all 50 US states for 18 to 24 months at minimum.

According to thestreet.com, Amazon shares began to sink after reports of the potential pharmacy move began to circulate.

Amazon has now acquired Whole Foods, which Stephen Buck, entrepreneur and co-founder of GoodRx, told CNBC would make it easier for the company to enter the pharmacy space.

“Amazon could use this retail footprint for consumers to pick up prescriptions,” he said in June, before the acquisition was finalised.

CNBC reported in late August that the acquisition would be “a threat to everyone”.

In June, AJP readers told us that they were not keen on the internet giant entering the pharmacy space: 39% said they did not support it entering the sector in Australia, and 24% said Amazon was “incompatible with pharmacy as a sector globally”.

While the current pharmacy ownership rules preclude Amazon entering the Australian market, the Pharmacy Guild told us at the time that it was watching this space.

“We will be watching Amazon’s arrival with interest, but have no information as yet on their approach to selling medicines in the Australian market,” a Guild spokesperson told the AJP.

Previous Do beta blockers add benefit to other meds?
Next Understanding exercise barriers vital

NOTICE: It can sometimes take awhile for comment submissions to go through, please be patient.

3 Comments

  1. William
    25/09/2017

    Amazon’s entry will be quite different and make current gripes about CW look like a slight itch.

  2. Bruce ANNABEL
    25/09/2017

    Amazon are a sophisticated super low cost/low price online retailer with a lot of clout in many respects. Plus they aren’t always focussed on the bottom line. The danger for traditional bricks and mortar retailers, including pharmacies, is they will threaten commodity products that aren’t advice and service driven that will fit in a small box. Therefore, my view is certain pharmacy departments should be fine and more so if the professional service quality is upped before Amazon opens here. But just believing ‘pharmacy’ will broadly not be impacted is fallacious as it depends on the level of open selling commodity lines are stocked and what strategies if any are being employed to stop market share wandering off to Amazon.

    • William
      25/09/2017

      Fully agree Bruce but we know pharmacists are past masters at keeping their heads in the sand and relying on historical protection to save them. Unfortunately the world has moved on and these days most protections are falling away.

Leave a reply