What’s Happening? Amazon customers can now order prescriptions via the Amazon Pharmacy store, which has launched on the US-based ecommerce site. Customers can set up a secure profile to add insurance information, manage prescriptions and select payment options before placing an order. Prime members get free two-day home delivery. Amazon has also initiated the Amazon Prime Prescriptions saving benefit, which offers Prime members discounts when medications are paid for without insurance at Amazon Pharmacy and 50,000 other participating pharmacies nationwide. A 40% discount on branded medicines and an 80% discount on generic versions are available.

Why does this matter? Prescription prices in the US are the highest in the developed world, and for some the cost means they avoid filling their prescriptions because they simply can’t afford it. Amazon Pharmacy displays how much medicines will cost if the customer chooses to pay with or without insurance, and this transparency enables them to select more affordable products.

Prime membership, which costs $119 per year, will drive costs down even further and the pharmacy benefits could attract more people to sign up, which would be another win for Amazon. The service will also give customers more product choice as they can browse a range of drugs, both branded and generic, along with different forms and doses. Additionally, if customers have any questions or concerns, they can access self-service help tools or call a pharmacist at any time of the day.

Amazon’s announcement saw shares of competing pharmacies such CVS Health, Walgreens Boots Alliance and Rite Aid take a hit, even though these companies offer their own internet services. Also affected was GoodRx, an online drug price comparison service that also offers discount packages.

Retail pharmacies not participating in the Amazon Prime Prescriptions savings benefit scheme could see their customers choose to go elsewhere to purchase more affordable medications. Other stores that provide pharmacy services could also be affected as customers will often buy items during their visit to pick up medication. That’s not good news, especially when considering the impact Covid-19 has already had on footfall. Diversifying their offerings to include services that can’t be made available online could help keep or draw back customers.

It’s too soon to tell what Amazon Pharmacy’s impact on retail pharmacy will be but, if it takes off, some stores could close, leaving customers with the choice of ordering their medicines online even if they don’t want to or going to an alternative pharmacy to see a pharmacist in person – which could be difficult in rural areas. Although Covid-19 has driven more people to put greater trust in digital health services, some remain sceptical or unable to access them. For these individuals, being able to see a pharmacist in person is critical not just for obtaining their medications, but also for seeking health advice.

Lateral thought from Curation – It’s worth referencing Amazon’s health care venture Haven, announced initially in 2018 in partnership with JPMorgan and Berkshire Hathaway. What was initially billed as a serious disruptor to US health services has seemingly struggled to make an impact, with top executives leaving and initial plans for the companies’ workforces reliant on policies from incumbent insurers.

Commentators, however, have noted the pandemic may have created a favourable environment to kickstart the venture. Increasing familiarity with telemedicine, coupled with doctors becoming comfortable with accepting a flat-fee structure to manage patients’ needs could see the venture build some momentum if it’s determined to disrupt.