Will Amazon’s new online pharmacy disrupt the U.S. drugstore business?
Amazon.com announced the launch of Amazon Pharmacy, a new online pharmacy service and another free perk for the e-tailing giant’s Prime members.
The new service offers free unlimited two-day deliveries of prescriptions filled by Amazon and lower prices (up to 40 percent off brand name; 80 percent off generic medications) for members who do not have health insurance. Amazon is also touting that there are over 50,000 pharmacies participating in its program across the U.S., all offering discount pricing, as well.
Consumers who want to use Amazon Pharmacy can go online or use the Amazon app to set up a profile with their insurance and payment information.
“We designed Amazon Pharmacy to put customers first — bringing Amazon’s customer obsession to an industry that can be inconvenient and confusing,” TJ Parker, vice president, Amazon Pharmacy, said in a statement. “We work hard behind the scenes to handle complications seamlessly so anyone who needs a prescription can understand their options, place their order for the lowest available price, and have their medication delivered quickly.”
For years, speculation has circulated over Amazon’s eventual entrance into the retail pharmacy business and its likelihood of success. The e-tail and tech giant’s acquisition of PillPack in 2018 was seen as a key development that would help Amazon navigate the legal and operational complexities of the business. While that service did not seriously disrupt the balance of power in retail pharmacy, it did indicate that Amazon was likely only getting started.
The novel coronavirus pandemic helped create a situation in which Amazon sees as an opportunity to make inroads into gaining market share.
“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, SVP of North American Consumer at Amazon. “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.”
The added free pharmacy perk just presents another competitive bar that Amazon is setting up for rivals, from CVS to Walmart, to jump over.
CVS, which rolled out its CarePass subscription program across the U.S. last year, offers free delivery on prescription medicines, over-the-counter remedies and other products sold by the chain with no minimum order for an annual fee of $48 or $5 a month. The drugstore powerhouse can not match other perks offered to Amazon Prime members.
The same is true for Walmart+, which offers unlimited same-day deliveries of groceries and general merchandise goods from the retailer’s supercenters for an annual subscription of $98, but not other elements of Amazon’s program.
- Introducing Amazon Pharmacy: Prescription – Amazon.com
- Will Amazon’s PillPack acquisition disrupt the retail pharmacy business? – RetailWire
- CVS subscription program goes big to outdo Amazon Prime – RetailWire
- Will Walmart’s best shoppers ditch Amazon Prime for Walmart+? – RetailWire
DISCUSSION QUESTIONS: Does the launch of Amazon Pharmacy mark the beginning of the company becoming a major force in the U.S. pharmacy business? Do you see Amazon expanding Pharmacy’s presence in Whole Foods or other stores it operates? How do you expect rival pharmacies, from national chains to independents, to respond to this development?