Amazon May be Working with Generic Pharmaceutical Manufacturers

Amazon has yet to confirm whether it has plans to enter the pharmacy space, despite speculation that has generated headlines since June 2017. One such report showed that the online retailer has already received wholesale licenses in 12 states, with 1 pending application.

Specialty Pharmacy Times® was the first to report on the location of Amazon’s fulfillment center that the licenses are registered to that is adjacent to an Express Scripts and Accredo location in Indianapolis, Indiana.

A new report from CNBC said that Amazon is in talks with generic drug manufacturers, including Mylan and Sandoz, about entering into pharmacy. Although the alleged conversations have been high-level, Amazon has yet to formulate a concrete plan.

Leerink also confirmed that a Sandoz executive met with Amazon to discuss making a plan for entering health care, but the investment bank did not say whether Amazon is seeking to become a drug wholesaler or a retailer, according to the article.

Other speculation regarding Amazon suggests that it is seeking a role in drug purchasing or distributing, CNBC reported.

Despite the numerous reports about Amazon entering pharmacy, Stefano Pessina, CEO of Walgreens Boots Alliance, said that they are not concerned about the implications, according to Business Insider.

"They will not come in an industry so complicated as our industry," Pessina said at the Forbes Healthcare Summit, as reported by Business Insider.

Pessina also said that Amazon would have to acquire another company or partner up to successfully enter the complicated pharmaceutical industry.

This opinion may change, however, if Amazon decides to distribute prescription drugs for uninsured patients. Giving patients this option and taking away cash purchases from brick and mortar pharmacies may severely impact business, according to the article.

Since selling prescription drugs to patients with insurance is more complicated, Amazon would likely have to take additional steps to enter that space, as Pessina said at the summit.

Another article from CNBC reported that Tim Wentworth, CEO of Express Scripts, said that he’s confident Amazon will enter the pharmacy space but does not see the online retailer as a threat. Wentworth said that Express Scripts sees Amazon as a potential partner.

While he did not comment about whether the companies are in talks, these comments may add more weight to SPT story about the proximity of their Indiana locations.

However, CNBC reported today that Amazon canceled a pharmaceutical wholesaler application in the state of Maine, which casts doubt on its entry into the pharma market.

"In Maine, a medical device license was not needed for the sale of medical supplies so industry sources have implied the Maine license was a strong leading indicator of whether or not Amazon would enter the drug supply chain," analysts RBC Capital Markets wrote in the report. "We see this cancellation as a negative indicator of the likelihood that Amazon enters pharmacy in the near term and thus as a positive for the pharmacies and drug supply chain."