“Alexa, Refill My Prescription!”

RemedyOne Insights leverage our team’s deep industry experience across disciplines to help readers find more clarity in the complexity of how healthcare systems work.
VP Contracting & Strategy

Introducing: Amazon Pharmacy…..

What this launch means for the $300 billion prescription drug market and the traditional pharmacy chains currently dominating it.

There are very few consumer markets where Amazon is not a leading competitor.  It all started with books and e-books, then music and video streaming services, add on the ability to purchase and receive delivery of almost anything including groceries delivered in 2 hours or less from your local Whole Foods Store. There has been a significant amount of discussion on how this is impacting small brick and mortar stores, big box stores and even malls…but what’s new is how Amazon’s presence will impact healthcare, specifically the pharmacy landscape, and how we fill prescriptions.

In the US, the pharmaceutical market is known to be extremely complex and competitive. Amazon has clearly done their homework as Amazon Pharmacy is launching as a multi-faceted, well thought out completely digital solution to prescription drug fulfilment, and the timing couldn’t be better as the coronavirus is leading so many of us to 1- look for convenient delivery options to avoid going out into crowded retail stores and 2- look for savings opportunities due to job loss and health insurance loss.

What does Amazon Pharmacy offer?

Amazon Pharmacy at its core is a full-service online prescription fulfillment solution starting with a simple patient profile set up, then physicians can order prescriptions directly to Amazon Pharmacy or patients can request a transfer from another pharmacy. Other standard services include refill ordering, tracking, free 2-day delivery for Prime Members and online web chat with a pharmacist. Enhanced services include specialized dose packaging for patients using multiple daily medications with the integration with the PillPack which was acquired by Amazon in 2018. Prime members will have increased transparency to drug pricing and access to discounts through the “Amazon Prime Prescription Savings Benefit” offering. This savings program is administered by Inside Rx, a subsidiary of Evernorth (Cigna) and offers discounts of up to 80% on generic medications and up to 40% on brand-name prescriptions. These discounts are available to patients without prescription insurance, and it can be coordinated with a patients prescription plan. There are other consumer based discount programs in this competitive space already, but the Amazon Pharmacy system is set up such that the patient will always pay the lowest of the insurance cost or the savings plan cost, which could be a valuable differentiator.

Will patients use it?

A recent survey of 2,500 individuals by Cowen & Co found almost 60% of Prime members would consider having their prescriptions delivered. If extrapolated across Amazon’s over 120 million Prime membership base, we could see nearly 72 million amazon prime members giving this new service a try over time.

What challenges will be seen with this launch?

Amazon is not the only pharmacy provider looking to further online expansion, Walmart is also heavily investing in this area, and CVS Health offers free delivery through the CarePass program. Amazon Pharmacy does not have any physical locations at this time but may leverage Whole Foods or Amazon Fresh locations for future expansion. Amazon will not dispense CII Controlled medications or offer same day- immediate delivery for prescriptions needed right away. Although Amazon has best in class privacy measures, as with any online ordering service, there is always the fear or threat of data security and/or packages being stolen upon delivery. Lastly and most importantly, customer loyalty and personal interaction. Local pharmacies both chain and independent and the dedicated pharmacists and staff are trusted by millions of Americans filling prescriptions every day.

What’s next?

Integration is the future…. Amazon Care (virtual care currently available to Amazon employees) could be expanded to the pharmacy customer base, integration with the Halo application, which can be used to track activity, sleep and other health metrics, purchase recommendations based on health profile, insights into medication adherence and other trends through broad cloud based data collection and of course someday, Alexa will be able to fill your prescription.



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Rebate and Formulary Management

RemedyOne cuts through the complexity of the pharmaceutical world by providing guidance and cost savings to PBMs, Employer Groups, Health Plans, and Third-Party Administrators.
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Rebate and Formulary Management

RemedyOne cuts through the complexity of the pharmaceutical world by providing guidance and cost savings to PBMs, Employer Groups, Health Plans, and Third-Party Administrators.
Play Video


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