Amazon on Drugs

What does the future hold for pharmacy benefits as Amazon enters the market?

In Q4 of 2020, as the world copes with the consequences of the COVID-19 pandemic, Amazon launched two independent campaigns as it entered the pharmacy space. First, they announced a mail order pharmacy solution. Secondly, they've released a cash drug discount program (to compete with products such as GoodRx).

In 2018, Amazon acquired PillPack, which is an independent, online pharmacy that is heavily focused in creating custom-dose packs, and improving patient compliance. This ultimately paved the way for the e-commerce giant to enter the pharmaceutical space, and disrupt pharmacy benefits programs in place around the US.

It is worthy to note that some exclusions will apply (as do most competitor pharmacies) – i.e. Amazon will only fulfill 30 days supply prescriptions at a time, no auto-refills, no coupon card billing, and no controlled substances. Additionally, you'll have to become an Amazon member.

For more information on this -- we invite you to check out Amazon's pharmacy website and a great article by CNBC.

After discussing with the Arxcel team, here are our main takeaways from this news:

  • We are always in favor of solutions that will increase transparency, and ultimately cost awareness for our members

  • Amazon will likely be able to expand and utilize some of their core competencies – membership, automation, shipping/technology innovation -- to increase deliverability and satisfaction amongst users

  • This solution may add convenience, for members who currently utilize Amazon’s suite of services (i.e. Prime membership)

  • The immediate opportunity will likely be with un-insured, or under-insured customers who may tap into the cash discount program

So what are the million dollar questions that we will need to figure out?

Will Amazon’s pharmacy be added into national PBM pharmacy networks? And can they replicate the clinical services provided at traditional, brick and mortar pharmacies?

The Arxcel team is already on the case, gathering as much information as possible to advise our clients and future clients on what this could mean to their organization.

If you're looking to have a conversation around Amazon pharmacy solutions, PBM's, copay assistance programs, or pharmacy benefits in general, please contact us. The sooner we begin to work with your company, the sooner you can be improving your bottom line.