Amazon Pharmacy Won’t Be a Disrupter Now, But It Could Be Later

It won’t change the game of online medicine today, but the experience could help improve it tomorrow

Dylan Hughes
Nov 26, 2020 · 3 min read
Image for post
Image for post
Photo by HopeMedia Stock Photography of Flickr

Amazon has mastered the art of delivering well-priced products to customers at a fast pace, making them the favorite retailer of people of all economic levels. Rich, poor, or in between, it is hard to deny a cheap and convenient service without having to sacrifice quality.

Thanks to this level of service, Amazon has amassed an insane amount of customers and is currently worth $1.56 trillion. This massive valuation isn’t just from online retail, though. The company has entered many different markets over the years, including entertainment, grocery stores, and cloud computing.

In 2018, Amazon also entered the pharmacy game, acquiring PillPack for $1 billion.

PillPack is an online pharmacy that fills prescriptions and delivers them to your door. As recently announced, Amazon will now be adding to this service through Amazon Pharmacy.

PillPack is not a unique business. Companies like Hims can prescribe medicine online and deliver those drugs to your doorstep. GoodRx offers discounted medicine just as Amazon is with Amazon Pharmacy.

The one advantage Amazon has over these competitors is its huge customer base and overall reach.

Amazon shoppers are accessing the website or app on a daily or weekly basis, adding things to their cart and making purchases. The really committed customers are Prime members, paying $12.99 a month for free two-day shipping and access to certain deals. There are upwards of 126 million Prime members.

Prime members will benefit more than anyone with the Amazon Pharmacy: members will receive up to 80% off generic drugs and 40% off name-brand medications as well as a savings card to use at up to 50,000 pharmacies. They will also receive the typical free two-day shipping of Prime purchases.

One of the issues with packing all these benefits into Prime membership is that it excludes the people that need cheap medication the most.

While a Prime membership is just a drop in the bucket for middle- and upper-class U.S. citizens, the uninsured and underinsured would likely have a tougher time putting up $13 a month for the service.

Non-Prime members can still access the Amazon Pharmacy, they just won’t receive the same discounts or quick delivery (free five-day delivery instead of two). Amazon will accept most health insurance or paying without it.

The telehealth industry is coming along and perhaps Amazon’s increased effort in it will help it grow that much quicker. For many, however, being able to pick a prescription up on the same day of seeing the doctor is the preference.

Unless Amazon is able to offer such a drastic difference in price than what GoodRx can get you at a pharmacy counter or promise same-day delivery of all medications, they won’t gobble up market share like they would in most industries.

The retail goliath’s entry into this space is ultimately a good thing as it should help continue driving down drug prices. Over time, as Amazon’s pharmacy gains experience, perhaps it will kill off other telehealth competition and brick-and-mortar as we know it.

For the foreseeable future, however, your local CVS, Walgreens, or Rite Aid will still most likely be the preferred option of most Americans.

The Startup

Medium's largest active publication, followed by +756K people. Follow to join our community.

Medium is an open platform where 170 million readers come to find insightful and dynamic thinking. Here, expert and undiscovered voices alike dive into the heart of any topic and bring new ideas to the surface. Learn more

Follow the writers, publications, and topics that matter to you, and you’ll see them on your homepage and in your inbox. Explore

If you have a story to tell, knowledge to share, or a perspective to offer — welcome home. It’s easy and free to post your thinking on any topic. Write on Medium

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store