Amazon’s Pharmacy Announcement

Three years ago, we wrote an article describing Amazon’s options in the pharmacy market and expected challenges.  Their announcement this morning confirms a number of our expected services, and we were three years ahead of time!  Please see our previous article at:

http://phsirx.com/wp-content/uploads/2017/10/SeptOct_Viewpoints_2017.pdf

Program Highlights

Amazon Pharmacy has been able to enroll in third party plans and will be accepting these prescriptions.  However, the focus appears to be on the cash market. They have partnered with Inside Rx to offer discount cash prices.  This appears to prevent losing margin dollars on third party prescriptions by avoiding the lower of clause in many third party agreements.  For insured patients, Amazon will provide patients with both their insurance copay and the cash pay amount, enabling them to choose the lower cost fill option.

Amazon will be leveraging Amazon Prime membership by offering free 2-day shipping on prescriptions compared to free 5-day shipping or $5.99 2-day shipping for non-Prime patients.  Amazon will offer their branded discount card for use at retail pharmacies, giving them additional information and opportunity to market to those patients.  It’s unclear why a retail pharmacy chain would want to support these programs.  Finally, Amazon Pharmacy is not including Schedule II controlled substances in its pharmacy offering at this time.

What impact do you think the Amazon Pharmacy will have on the market?

 

Posted November 2020

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