- Amazon has ventured into the US pharmaceutical arena by launching Amazon Pharmacy.
THD NewsDesk, US: On November 17, Amazon announced its latest venture, Amazon Pharmacy, for delivering prescription medications in the United States. The inaugural of Amazon’s online pharmaceutical store has made it difficult for drug retailers such as Walgreens WBA.O, CVS Health CVS.N, and Walmart WMT.N to secure their loyal consumers.
The online drug store makes it convenient for its customers to compare medicines’ prices as they buy drugs on the company’s website or application. Subscribers of the Prime club enjoy the added benefit of heavy discounts on their purchases and can toggle at checkout between their co-pay and a non-insurance option.
This move comes with the acquisition of PillPack in 2018 as a part of its efforts to ship generic drugs throughout the country. Moreover, Amazon has been actively trying to secure state licenses to expand its drug supply chain. The entry of Amazon into the American pharmaceutical market has caused pharmacy chains, drug wholesalers, and grocers to dwindle. At the same time, the shares of Amazon have gone up by 1%.
CEO of PillPack, T J Parker and Vice President of Amazon Pharmacy said that the retailer aimed to bring “customer obsession to an industry that can be inconvenient and confusing.”
“Amazon’s launch of an online pharmacy is a meaningful threat to brick and mortar pharmacies,” Northwestern University’s Kellogg School of Management professor Craig Garthwaite said.
“These retail pharmacies must now offer more than just easy access to a prescription.”
“New entrants to the highly competitive pharmacy market come as no surprise to us,” said CVS Health in a statement. “While pharmacy is a core component of our business, CVS Health is so much more than your corner drug store.”
Although Walgreens can offer similar features – from providing a full and growing range of pharmacy and health and wellness solutions to free same-day delivery, Amazon has definitely upped the game by introducing heavy discounts.
Amazon promises discounts on non-insurance purchases that apply to more than 50,000 pharmacies to its customers. Further, Prime subscribers may avail of discounts up to 80% off on generic and up to 40% on off-brand drugs on non-insurance purchases. However, Amazon Pharmacy is yet to expand to Illinois, Minnesota, Louisiana, Kentucky, and Hawaii.
The surge of the pandemic may have led to a tremendous increase in the sales of E-commerce ventures. As people are being encouraged to opt for cashless transactions and as little contact with the outer world as possible, online pharmaceutical stores are witnessing a boom. It is predicted that more than 150 million Prime members may choose online medication, given their trust in Amazon.
Source: CNBC
