Amazon Turns Up The Heat On Brick-And-Mortar Retailers With New Online Pharmacy

Amazon has turned up the heat on its brick-and-mortar competition Tuesday with the launch of an online pharmacy, which will deliver prescription medications to its U.S. customers and offer hefty discounts for those paying without insurance.

Key Facts

The company said that Amazon Pharmacy, a dedicated section of its website, will make sure that “filling prescriptions is as convenient as any other purchase on Amazon’s online store.”

The service will be available to U.S. consumers from Tuesday, and will allow them to easily compare prices between insurance and non-insurance options, both of which can be used. 

Members of Amazon Prime, the company’s subscription service, will be able to access sizable discounts if not paying with insurance — up to 80% on generic medicines and up to 40% on branded — both on Amazon’s site and in more than 50,000 participating pharmacies around the country. 

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The pharmacy offering expands upon Amazon’s acquisition of PillPack two years ago, which offers services to those managing multiple daily medications for chronic conditions and will remain open to those that need it. 

Key Background 

While Amazon has managed to crack, and often dominate, most retail markets, the lucrative one for prescription pharmaceuticals has remained elusive. In 2018, it signalled its intent to close that gap, acquiring the small online pharmacy PillPack, a move that didn’t seem to shake competitors at the time, with Walgreens CEO saying the company was “not particularly worried” about the deal. Perhaps competitors shall worry today, with pharmacy stocks tumbling after the announcement and as consumers, as Amazon points out in its announcement, conduct more and more of their business from home in the midst of the Covid-19 pandemic.   

Further Reading

Amazon Pharmacy Business Adds Online Store, Free Delivery For Prime Members (Forbes)

The inside story of why Amazon bought PillPack in its effort to crack the $500 billion prescription market (CNBC) Follow me on Twitter. Send me a secure tip

Robert Hart

Robert Hart

I am a London-based reporter for Forbes covering breaking news. Previously, I have worked as a reporter for a specialist legal publication covering big data and as a freelance journalist and policy analyst covering science, tech and health. I have a master’s degree in Biological Natural Sciences and a master’s degree in the History and Philosophy of Science from the University of Cambridge. Follow me on Twitter @theroberthart or email me at rhart@forbes.com 

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CNBC Television

Amazon is entering the pharmacy business with a new offering called Amazon Pharmacy, allowing customers in the United States to order prescription medications for home delivery, including free delivery for Amazon Prime members. CNBC’s Bertha Coombs reports. For access to live and exclusive video from CNBC subscribe to CNBC PRO: https://cnb.cx/2NGeIvi Amazon is entering the pharmacy business with a new offering called Amazon Pharmacy, allowing customers in the United States to order prescription medications for home delivery, including free delivery for Amazon Prime members.

Amazon has been quietly building out its pharmacy offering for several years after ramping up internal discussions in 2017 and acquiring PillPack in 2018. The pharmacy space is notoriously complex and competitive in the U.S., and Amazon Pharmacy is built in part on PillPack’s infrastructure, including its pharmacy software, fulfillment centers and relationships with health plans. Amazon Pharmacy, announced Tuesday, is the company’s biggest push yet into $300 billion market, and threatens the dominance of traditional pharmacies like CVS and Walgreens, as well as other large retailers that offer pharmacy services, including Walmart.

Pharmacy stocks tumbled following the launch of Amazon Pharmacy. CVS shares fell 8.6% on Tuesday. Walgreens Boots Alliance dropped 9.6%. Shares of Rite Aid slid 16.2%. GoodRx, which helps consumers find discounts on prescription drugs, fell 22.5%. Amazon shares closed slightly higher. For Amazon, the announcement is well timed. Americans are increasingly relying on getting their medicines via mail to avoid possible exposure to the coronavirus. That shift could be permanent, as more people than ever before are learning about new ways of receiving medication. “We wanted to make it easy for people to get their medication, understand the cost and get it delivered to the home,” said TJ Parker, Amazon’s vice president of pharmacy, who previously co-founded PillPack.

“The hard work is to make it easy … there were a number of complications behind the scenes.” “We think this new benefit will add tremendous value to our members,” added Jamil Ghani, vice president of Amazon Prime. “It’s relevant as folks try to do more from the comfort and safety of their homes.” » Subscribe to CNBC TV: https://cnb.cx/SubscribeCNBCtelevision » Subscribe to CNBC: https://cnb.cx/SubscribeCNBC » Subscribe to CNBC Classic: https://cnb.cx/SubscribeCNBCclassic Turn to CNBC TV for the latest stock market news and analysis. From market futures to live price updates CNBC is the leader in business news worldwide. The News with Shepard Smith is CNBC’s daily news podcast providing deep, non-partisan coverage and perspective on the day’s most important stories. Available to listen by 8:30pm ET / 5:30pm PT daily beginning September 30: https://www.cnbc.com/2020/09/29/the-n… Connect with CNBC News Online Get the latest news: http://www.cnbc.com/ Follow CNBC on LinkedIn: https://cnb.cx/LinkedInCNBC Follow CNBC News on Facebook: https://cnb.cx/LikeCNBC Follow CNBC News on Twitter: https://cnb.cx/FollowCNBC Follow CNBC News on Instagram: https://cnb.cx/InstagramCNBChttps://www.cnbc.com/select/best-cred…

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