Replacing electronic tablets with actual tablets: Could Amazon change the pharmacy business?

Imagine the simplicity of getting home from work, realising you have forgotten to go to the pharmacy for the 3rd time this week and then just asking Alexa to order your repeat prescription instead. Right now, this is just a dream, but the possibility is on the horizon. Ever since 2018, when Amazon acquired Pillpack, an American pharmacy that sorts and delivers medication to the customer’s door, the idea of Amazon entering the pharmaceutical marketplace has had the ecommerce world talking.

85% of Amazon Prime users indicated interest in an Amazon pharmaceutical service

Right now, prescription medication is one of the few items consumers can’t buy on Amazon. If Amazon can enter this marketplace, it would disrupt the $934.8 billion global pharmaceutical industry and perhaps lead to the complete overhaul of the pharmaceutical industry in the US in particular. Doing so will be extremely difficult even for Amazon though as it is a highly extreme and entrenched competition where many companies have tried and failed. Unlike other areas that Amazon has entered and dominated, the pharmaceutical industry is highly regulated and dominated by brick-and-mortar officials and middlemen that manage price and distribution. However, that doesn’t mean Amazon can’t initially make a mark on the pharmaceutical marketplace and build on it.  

Since Amazon have obtained several approvals from state pharmaceutical boards to become a wholesale distributor and owns Pillpack, analysts believe the company can begin their campaign by targeting consumers who are paying for their prescriptions out of their own pockets. Due to the move into the consumerisation of healthcare, where patients are put into the position as a consumer, there is a huge market of people who are financially incentivized to think about their healthcare. Amazon already has an infrastructure in place to package and ship to a large-scale market that other businesses do not and has the experience of a marketplace to allow patients/consumers to pick and choose certain prescriptions by price.

20-30% of medication is likely to be being paid for out of pocket

With Amazon chomping on the bit for a share of the pharmaceutical industry, is there any businesses safe from the company? Are there even any industries left for Amazon to dive into? Pharmaceuticals was a bit of a curve ball for all concerned, so no industry should consider themselves safe from the global conglomerate – cars, pets, houses, what will Amazon decide to challenge next…? Only time will tell.

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