There are still sectors that Amazon does not have a grasp on. As they hate not being able to satisfy every customer's needs, the company is closing the gaps one by one. The next one can be ticked: prescription drugs.
What the news?
Does anyone remember Amazon's $753 million acquisition of Pillpack, the prescription medicine delivery service? Well this was 2 years ago, and after some careful thoughts, brilliant insights and a touch of magic, Amazon is now launching Amazon pharmacy, its own online medication service.
(Source: Amazon website)
How will it work?
Clients have a secure pharmacy profile where they can add all necessary information such as insurance information, outstanding medical issues like allergies, manage their prescription and pay with whatever means are available on Amazon. Of course, if it were only a way to buy medication, it would be way too simple. Amazon also introduced self-service help tools, where clients can get more information about sicknesses, medications, and also have the opportunity to speak with real life pharmacist on the phone for advices on how they ought to medicate a certain condition, copying the experience you would get in a classical pharmacy. This will of course require some staffing on Amazon’s side.
The service will offer a wide 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.” However, the sale of opioids will not be authorized.
“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 Doug Herrington, senior vice president of North American Consumer at Amazon, in a statement. “PillPack has provided exceptional pharmacy service for individuals with chronic health conditions for over six years. Now, we’re expanding our pharmacy offering to Amazon.com, which will help more customers save time, save money, simplify their lives, and feel healthier.”
What is means for Amazon
The last time they pushed for the healthcare sector was when they launched their "over-the-counter" drugs line in 2019. The offer is now complete and may make other companies such as Walgreens or GoodRx tremble. The online service seems even more appropriate in the middle of a pandemic where people do most of their shopping online - so you can also get prescription drugs next to your orange juice and new headphones. What a time to be alive really.
However, we must note that the concept of buying everything at the same place is not entirely new. Indeed, pharmacies in the US have become stores when one can also buy food and other necessity products next to the prescriptions.
Source: The Times
In the same way, this is an opportunity for the e-commerce giant to keep cross-promoting products. Having a throat ache? Want some medicine to cure that? No problemo. But what about some nice tea to go along with it? Oh, and I'm sure that a warm blanket would do nicely to get all comfy and help you get better. By the way, w
hy don't you have a look at our healthy food lines, here are all the nutrients you need to get back in shape, sharp and strong. You get the picture.
As for revenue projections, it's looking good so far: revenues are expected to be of $131 billion by 2025 worldwide, with an industry expected to be at around $1.31 trillion. This translates into a solid 10% market share in the pharmacy service market, not bad when you initial business plan was to sell books - old joke sure, but I always like to remember it.
Exclusive Prime advantages
If you paid for your prime membership – like 82% of American households – you want some advantages. And you'll get them. In addition to all of these beautiful prescription drugs services, Prime members will get an unlimited free two-day delivery on their Amazon orders. In addition, prime members paying without an insurance will be able to save up to 80% off generic drugs and up to 40% off brand names. When you do not have insurance, a privilege that will also be available throughout 50'000 partnering pharmacies in the US.
“We understand the importance of access to affordable medication, and we believe Prime members will find tremendous value with the new Amazon Prime prescription savings benefit,” said Jamil Ghani, vice president of Amazon Prime, in a statement.
Crushing the competition?
Well, we are not going to lie to you, this announcement is an important blow to competitors, who worked hard to develop their own reach and services. Companies like GoodRx, RxSaver and ExactCare will certainly feel the presence of the giant in their sales of the coming quarters. Nevertheless, companies like GoodRx already took a turn in prevision of this competition by diversifying their services and offering telemedicine. Sadly, that might not be enough as Amazon is, of course, already working on such a project. If they do end up rolling out the Amazon Care which they provide to their workers, that would mean that Amazon has a grasp over almost every healthcare service, aside maybe from catastrophic care. But that's of course, until they provide a solution for it (I do wonder how though).
The effect on drugstores was massive as well, as the news made shares of company such as CVS Health, Walgreens Boots Alliance, and Rite Aid plummet. The reason why? Well, 70% of people get their medication in pharmacies. However, 60% of Amazon prime members - which is, remember, 82% of households - admitted considering having their prescription delivered at home. Simple math shows how bad it could be for drugstores.
There is a name for that: opportunity of adoption (and a big one).
Once again, it seems that Amazon is one step closer to satisfying all of their consumers possible needs.
82% of US households have an Amazon Prime membership, in Digital Commerce 360
EXCLUSIVE: Amazon's first-ever plan for its new pharmacy business, which included partnering with Pfizer and J&J, highlights the challenges and ambitions of the secretive business, in Business Insider
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