‘Community pharmacies should sit up and take note.’

amazon box Photo credit: Mike Seyfang. https://www.flickr.com/photos/mikeblogs/
Photo credit: Mike Seyfang flickr.com/photos/mikeblogs/

US e-commerce giant Amazon has this month filed a trademark for the term “Amazon Pharmacy” in Australia… should local pharmacy owners be worried?

This month, Amazon filed a trade mark for the term “Amazon Pharmacy” with IP Australia, covering a number of goods and services including pharmaceutical preparations, online retail pharmacy services, distribution and delivery of prescription medication, and preparation of prescriptions in pharmacies.

It additionally lists a “pharmacy packaging service that aligns, sorts and packages a patient’s medications by date and time into individual packets”, which describes exactly the type of service Amazon Pharmacy is now offering in the US.

In June 2018, Amazon acquired the online pharmacy company PillPack for a reported US$753 million (AU$1.09 billion), signalling a major foray into the pharmacy space.

PillPack was founded by pharmacist TJ Parker and computer scientist Elliot Cohen in 2013.

In November last year, the company made a subtle change in their branding from “PillPack, an Amazon company” to “PillPack by Amazon Pharmacy”.

Customers can order and pay for their medications online through the PillPack by Amazon Pharmacy website.

Source: Amazon.com

The service packages medications including vitamins and over-the-counter medications into organised, labelled packets and delivers them directly to customers.

Inhalers, creams and other supplies are also packaged and sent by mail.

PillPack by Amazon Pharmacy offers customers the ability to chat online with a pharmacist 24 hours a day, seven days a week.

“Now you’ll never sort your pills, never stand in line at a pharmacy, and never miss your medication again … it’s your medication made easy,” Amazon advertises.

Behind the scenes at PillPack by Amazon Pharmacy. Source: Amazon.com

Amazon Pharmacy in Australia

Based on its recent trade mark application, Amazon Pharmacy now has its eyes set firmly on the Australian market.

Robert Read, CEO of MedAdvisor, has been warning Australian pharmacists of this for the past few years.

In 2018 he said Australia was “an attractive market for Amazon, there’s huge dollar sales … I don’t think the regulatory hurdles will hold forever.”

“For the Australian pharmacy landscape to think that Amazon won’t enter is naïve,” Mr Read told AJP this week.

“I think they’re timing their run to coincide with the introduction of e-prescribing which is clearly a necessary part of a successful online pharmacy model.”

National e-prescribing is set to roll out over the next year or so, with amendments passed in October last year providing the legislative framework for prescribers and their patients to have the option to use an electronic prescription as an alternative to a paper-based prescription.

“What we’ve seen as we’ve looked globally is that when e-prescribing comes in and online pharmacy becomes part of the landscape, somewhere in the order to 10-20% [of the community pharmacy] market share is eroded,” said Mr Read.

Mr Read has in the past suggested Amazon could use their logistics power in retail to acquire a large pharmacy group like Chemist Warehouse and have a large physical presence as well like they’ve done in the US with Whole Foods.

“They’ve certainly got the money for that,” he said.

“What a combination that would be, it would be quite terrifying for a lot of community pharmacy.

“There is no limitation to their money… A company like Amazon can sustain losses for a serious amount of time and it hardly makes a dint on their overall earnings,” he said.

However Mr Read told AJP that Amazon will more likely come into Australia with a PillPack-type model similar to what it’s done in the US.

This could pose the next big shift in the market since the rise in big box discounters.

“Because of the timing, so coming in with e-prescribing … if you haven’t done the work to lock in your patients digitally then they’re digitally mobile and may be ready for that transition [to Amazon].”

This week AJP ran a poll on social media asking “Do you think Amazon will disrupt the pharmacy sector if and when it enters the Australian market?

Out of 319 votes, 251 (79%) responded ‘Yes’ while 68 (21%) voted ‘No’.

If the Pharmacy Guild of Australia is concerned about the possible entrance of a global retail giant, they’re not showing it.

A spokesperson for the Guild told AJP that Australians still prefer to have their prescriptions filled face to face.

“Australia’s pharmacy network model and regulatory requirements around the supply of prescription medicines has meant most people continue to source their medicines from their local pharmacy where they can get face-to-face advice and assistance,” the spokesperson said.

“Most Australians live within 2.5 km of a local pharmacy, where they can access subsidised medicines immediately.

“Furthermore, the Pharmaceutical Benefits Scheme significantly subsidies many prescription medicines, including all PBS medicines dispensed to concession cardholders – so it is unlikely Amazon could supply medicines at a cheaper price.”

The “Amazon effect”

Community pharmacy owners should take note of the “Amazon effect” and how consumers’ expectations will change once the company enters the pharmacy market in Australia, said Mr Read.

“I’ve been campaigning that community pharmacy thinks hard about the Amazon proposition – why is it that people want to go to Amazon, what is that Amazon effect that has actually happened that means that consumers expect a certain experience from their retail shopping experience?

“Pharmacy is rightly or wrongly attributed more and more to a retail shopping experience, so the expectations of the consumer head towards what they’ve seen in other parts of the retail landscape,” he said.

“It’s incumbent on community pharmacies to sit up and take note, and to think hard about how they’re going to compete in that world.”

Aaron D’Souza, General Manager of Guild Digital and Pharmacy Click and Collect, agrees that the pressing matter is consumer expectations.

“Amazon doesn’t worry about quick market wins, they are playing the long game. Will a possible Amazon Pharmacy disrupt the industry tomorrow? No. Will they change customer expectations next week? YES! This is the danger,” said Mr D’Souza.

“Research shows that customers have a higher expectation of their health carers because of great experiences with online retailers.

“The best way to combat that is recognise your digital weaknesses then get the basic digital infrastructure in place now.”

Mr Read believes if community pharmacies can get on the front foot digitally then they can stay competitive in the changing market.

“While Amazon is getting their pharmacy proposition ready, then community pharmacy can be thinking about how they can help their patients connect more seamlessly,” he said, for example to their regular GP or if they go into hospital.

“Community pharmacies have a massive opportunity here. This could actually be a really, really galvanising point for community pharmacy if they take the right actions today.”

However he added: “Those that don’t will go by the wayside.”

Mr Read provides the followings advice for community pharmacies:

  1. Get your patients digitally connected. That can be SMS or app (such as MedAdvisor).
  2. Allow the patient to pay in advance for goods. Offer a true click-and-collect service.
  3. Provide home delivery service for those who are prepared to pay for it.
  4. Drive health programs and services as this diversifies revenue.

While Amazon Pharmacy may not happen immediately, pharmacy owners should be preparing now, said Mr Read.

“The supermarkets had their pharmacy brands registered and then they got rid of it, so it’s not going to say it’s necessarily going to happen tomorrow,” he said.

“But I think we know what Amazon is capable of so no one should spend their time underestimating it.”

Previous Dispensing in the spotlight
Next Dentist repeatedly breached conditions

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


  1. Matt Low

    Most pharmacies invest in MedAdvisor for prescription management yet MedAdvisor still have not provided a seamless platform for patients to use. Take home delivery as an example.

    • Dani Li

      Hi Matt, we are currently working on delivery and will commence the pilot phase next month. Exciting times ahead! Kind regards, Dani


    Many years ago I predicted that E-prescribing, digitisation etc will be no good for community pharmacy. Look at the UK where online pharmacy Rx trade has flourished and the severe pressures it has placed on ordinary high st pharmacies that have higher overheads. I have recently spoken to several such UK operators who have confirmed this. This will only benefit corporate operators and those that have $$$ to access economies of scale. Automation+E-scripts will result in a Vending-Machine style operation. The longer you as an industry prevent that the better. Good Luck!

Leave a reply