Amazon Launches New Pharmacy Venture
With Amazon’s 2018 acquisition of PillPak, speculation has been growing regarding their entry into the pharmacy market in a bigger way. That speculation is now ended with the launch of Amazon Pharmacy and Amazon Prescription Benefit. Highlights of the Amazon pharmacy program include:
- Amazon pharmacy will be an added benefit of Prime membership
- Amazon will offer mail order prescriptions and prescription price comparisons and discounts
- Access to the pharmacy program through the Amazon App where all transactions can be completed
- Pharmacy mail order offered in all states with the exception of HI, IL, KU, LA and MN where technical requirements are not yet in place but are being worked on.
- Two day delivery of prescriptions via Amazon Prime
- 24 hour access to pharmacists to answer any medication related questions
- Significant discounts of up to 80% on generic medications and 40% on brand name medications.
- Discounts also available at over 50,000 pharmacies nationwide
- Search support to determine if insurance or cash prices for prescriptions are less expensive
- No use of customer information for marketing or research purposes without patient consent
- PillPak option for convenience packaging. PillPak will remain a distinct entity separate from Amazon Pharmacy.
- No CII controlled substances to be mailed
The immediate impact on the market has been a drop in competitor stock prices: Walgreens and CVS stock were down 9%, Rite Aid down 15% and Good Rx down 20%. While the Amazon entry is likely to cause more competition in this space, in it’s current iteration it does not represent any type of significant market disruption.
Amazon is partnering with InsideRx to manage the discount program. Inside Rx is part of Evernorth, which is part of Cigna. Evernorth is also the parent company for Express Scripts and Accredo. The relationship with Cigna raises some more interesting questions about future possibilities in the PBM space with ESI and specialty pharmacy with Accredo. The 340B space could also come into play through ESI with their acquisition of split biller Verity.
Additionally with Amazon’s acquisition of Whole Foods the opportunity to move beyond mail order pharmacy and to enter the brick and mortar pharmacy market through implementation of retail pharmacies in Whole Foods locations is still another possibility.
Hospital and health systems offering pharmacy operations in the retail and specialty space would be well advised to keep a close eye on Amazon’s progress and to work to ensure that their pharmacy services offer equal or greater value than the current Amazon mail order service or any future foray into specialty pharmacy. With hospitals and health systems still providing the medical care for patients, they maintain the distinct advantage of longitudinally managing the patient. With medications as the primary treatment modality for the majority of chronic condition patients, having access to the medication information is critical to the overall delivery of the best care for the patient. Fragmenting the prescription services and medication information is not the best approach to care delivery. Also, having hospital based clinical pharmacists that can spend time with patients and become in essence their “personal pharmacist” not only supports better care and outcomes but also further cements that relationship with the hospital pharmacy services.