Venture: Amazon Pharmacy

Amazon Pharmacy

Amazon is sticking their long arm into another industry,  recently announcing that they will be releasing a pharmacy division, which will allow customers to have their medications delivered to their door on a scheduled basis. The fight over medicine has been fought by many large players such as CVS and Walgreens,  but now the conglomerate shipping business is getting involved.

In recent news, Amazon stated that its customers would be able to buy prescription medications through a new store on its platform. This new feature is another exclusive service for members of Prime; as there are already many advantages to pay the yearly fee to a Prime member, there is another way. Members can receive two-day shipping on all medications ordered through the pharmacy at no charge. Amazon also told its members that they would have access to discounts negotiated by industry middlemen.

Tech Impacts

Amazon has been selling prescriptions through a company known as PillPack previous to this news, PillPack was a lot more intense where many patients have to go through rigorous steps to get their medicine by having several steps of verification of a long period of time to make sure that the medicine you are asking for is correct. . If they wanted a higher-level drug such as opioids it would be very hard. Amazon Pharmacy now owns Pillpack and will ship items like insulin, asthma inhalers, and other common generic or branded medications. However, high-level drugs like opioids that are subject to theft will be not be distributed by Amazon.

Your typical brick and mortar pharmacy will run Amazon Pharmacy. After a doctor submits a prescription, an Amazon hired pharmacist will handle the medications and any questions that will come along with that. Amazon will have to make this very appealing for consumers because, as of now, most Americans still fill their prescriptions at a traditional drugstore. Drug sales at pharmacies totaled $336 billion in 2018, where mail-order prescriptions account for only 5.8% of that.

There has been a recent uptick in the number of mailed prescriptions due to the pandemic; they have risen from 5.8% to 21%. There have been many changes that companies had to make, and shipping prescriptions is going to be one of them. Amazon already has a significant online presence, and technology is one of the best globally, which puts great trust in the consumers that they will get their prescriptions on time and be right.

Competitors

CVS and Walgreens had felt the pressure from Amazon for a long time before this as many products that consumers used to buy from these stores, such as shampoos, shaving materials or medicine, have switched to purchasing these products online. Since the release of Amazon Pharmacy, stock in CVS and Walgreens have dropped, with many investors fear the drugstore chains will suffer the same effect that Amazon had on bookstores. CVS dropped 8.6%, Walgreens dropped 9.6%, and Walmart dropped 1.24%; these drops are inductive of what the future may hold. One aspect where Amazon will not fulfill is services such as vaccinations and what will keep the other competitors afloat.

Walgreens CEO Stefano Pessina stated, “ The pharmacy world is much more complex than just delivering certain pills or packages, I strongly believe that the role of the physical pharmacy will continue to be very, very important in the future.”

Pessina knows that competitors in all fields will arise, but it is about keeping ahead of the others and maintaining one step forward. Walgreens will be able to fight against Amazon if they can make the process of giving consumer medication easier.

Overall

Amazon will never stop expanding and try to take over all the markets they can; it will be up to the everyday consumer to keep Amazon in line and allow the “small man” to keep their business running. Although companies like CVS and Walgreens do not have current small men statuses, they may be so in the near future if they lose a large consumer base to Amazon if it is easier to do so. Whatever is the easiest way to obtain a product that will attract consumers to that. Whether the government steps in to stop Amazon from expanding or is everyday consumers will be a massive hurdle to jump to prevent them from developing.