Amazon is making its biggest push into the healthcare industry yet with the launch today of Amazon Pharmacy: a new service offering home delivery for prescription medication.
Customers can sign up to the new store by creating a ”secure pharmacy profile,” with the option of adding information about their health insurance, any outstanding medical issues like allergies, and any regular prescriptions. The store will offer a range of “generic and brand-name drugs,” reports CNBC, including “commonly prescribed drugs like insulin, triamcinolone steroid creams, metformin for controlling blood sugar, and sumatriptan for migraines.” Notably, the pharmacy will not sell Schedule II medications, which includes many common opioids like Oxycontin.
As usual for Amazon, Prime members will get a number of advantages over regular customers. These perks include free, two-day delivery on orders and discounts on medication. Amazon claims Prime members will be able to save “up to 80 percent off generic and 40 percent off brand name medications when paying without insurance.” Prime members will also be able to save on medication bought in person from over 50,000 pharmacies across the US, including Rite Aid, CVS, Walmart, and Walgreens.
Amazon Pharmacy will be available in 45 states this weeks, reports CNBC. States currently not covered include Hawaii, Illinois, Kentucky, Louisiana and Minnesota, though Amazon plans to expand to those areas in the future. Amazon says it accepts “most” insurance plans, and will give customers the option of speaking to a pharmacist for advice.
The launch of Amazon Pharmacy is a significant move from Amazon, but far from unexpected. The company has been steadily building up its position in the healthcare market for years now, with signs pointing to a launch into pharmaceutical services.
In 2018 it bought pharmaceutical delivery startup PillPack for just under $1 billion. The company later rebranded the service as PillPack by Amazon Pharmacy, and CNBC reports that PillPack’s infrastructure (including its fulfillment centers and relationships with healthcare providers) were used to create Amazon Pharmacy. Amazon says PillPack by Amazon Pharmacy will continue as a “distinct service,” aimed at customers “managing multiple daily medications for chronic conditions.”
According to Healthcare Weekly, the pharmacy industry is worth $312 billion in the US, with annual growth rates of 3 percent driven primarily by the rise of online stores and home delivery. Given Amazon’s prowess in logistics and its network of warehouses and drivers, entering this space seems logical. And at a time when more people are staying at home because of the pandemic, the prospect of delivering medication is even more attractive.
In a press statement, Amazon’s Senior Vice President of North American Consumer, Doug Herrington, suggested that this dynamic would work in the company’s favor. “As more and more people look to complete everyday errands from home, pharmacy is an important and needed addition to the Amazon online store,” said Herrington.