What Other Forays Could Amazon Make Into the Pharmacy Space?


With Amazons purchase of PillPack, it leaves me wondering what other companies they may be considering in the pharmacy space.

Last year around this time I spent some serious time mulling what Amazon was going to do in the pharmacy space. You can see that thought process here, along with related graphics highlighting the potential paths. Nonetheless, one of the things I had speculated was that Amazon would get into the online/mail-order pharmacy space, and hilariously looking back, compete with PillPack. Color me surprised when I learned that Amazon just decided to buy them out.

That being the case, I suppose it brings me to what Amazon could be planning next because I do not think this is their only foray into the health space. I believe this could lead to further acquisitions. Last year, I discussed the idea that perhaps Amazon would partner with a pharmacy benefit manager (PBM) or Insurance company, which I think is out of the picture based on most media seeming to indicate that Amazon wants to target drug pricing through alternative means. The other was medication distribution a la Cardinal, but as I reported earlier this year, that seems off the table as well. So what's left is getting into the mail order pharmacy space and OTC drug options through their current online systems.

I don't think we'll see brick and mortar options any time soon, after all, if they were interested they could have gone after the Rite Aids that was split between Albertsons and Walgreens. I wouldn't say that they wouldn't try doing remote filling stations like Walgreens is with their MedAvail system or pick-up locations, which they seem to be pushing with other consumer goods at this time. The fact that Amazon is exploring stores without cashiers and virtual checkouts lead me to believe it could be a possibility to deliver drugs to such locations for patients to pick up possibly, but I think the mail order makes more sense at this time. The last option is building pharmacies into their Whole Food store locations, but that seems a ways off as well, and I think they are going to entrench in the virtual space for now.

All in all, what's next then? I had previously written about the number of startups coming to the pharmacy space, and can now envision Amazon gobbling some of them up, especially if they mesh well with each other and can spin profits off of their services. That being the case, there are some things to consider that have been published in Pharmacy Times and worth highlighting. For one, I have written in the past about the rise of virtual pharmacies in the US market targetting singular disease states. This includes companies looking at men's health issues—like Roman and For Hims—which allow a patient to remotely talk to a provider and get a prescription for sildenafil and then a third-party pharmacy fills it and mails it to the patient.1 This is a really interesting system, as it cuts out waiting to talk to your primary, works on your time, and deals with classification of medications that tend to be low risk. So where am I getting with this? Well, Roman is actually backed by TJ Parker (PillPack) as well. I think it's worth postulating a number of these companies may be attractive to Amazon to pursue for several reasons, especially given the increased relationship some of these investors will now likely bring.

Foremost, Amazon now has PillPack, which means they have a pharmacy licensed in all states but Hawaii, and can thus have a central location to handle such medication dispensing if companies like Roman comes on board. Depending on how Amazon works out benefits to drug costs, they could then undercut others and get these drugs cheaper and stand to make a decent profit I would suppose.

Second, Amazon could arguably use this as a means to get into the patient care business, and what better way than a low-risk environment for specific prescriptions for ED, birth control, skin care, etc. In essence, get the public to trust Amazon providing limited health care services, then expand to other telemanagement services. This would mainly be key if these services can be reached in low-income and low-health care provider locales that they could then leverage as an expansive service and attract a larger population in parts to their logistical services on the ground.

Lastly, I think these businesses are going to take off, but they seem to be made to be bought and conglomerated together under another industry. Looking for example at Nurx, one of the first such companies that deals in OBC, just got $36M in funding that I am sure is driven by anticipation of something more significant.2 I don't think these businesses can get by in the long-term focusing on just a singular issue, and thus I wonder if it a step for Amazon or someone else to come along and grab. A few months back I did a write-up on the number of start-ups in the pharmacy space, and if you are curious about them feel free to give a more detailed read.

I do think there are some limitations to this argument. One key thing is that while PillPack may be able to dispense to all of these states, the issue that many companies are facing is that they lack prescribers in all states to provide their services. So the rate-limiting step will be who grows and onboard prescribers fastest and expands to cover enough states to get to a tipping point they seem worthwhile. Other issues will be the pharmacy profession itself, which is seeing an uptake in prescribing power for limited areas, such as OBC.

For companies like Walgreens and CVS, Amazon must have them on edge.3 Even though CVS has had their own multidose packaging system for years, it was only after Amazon acquired PillPack that they seem to push the service. Coupled with CVS and Walgreens pushing same or next-day delivery, it's not hard to see that they are trying to keep ahead. But, would CVS and Walgreens try to compete with these teleservices and online pharmacies in providing patient services? This will be of interest to me, especially if they decide to take their current MinuteClinics online for teleservices, in which case I would say they recognize this as a potential threat.

In any event, that lays out my thoughts on what Amazon may be stacking their deck at this time, and will look forward to whatever new innovations is spurred by these digital pharmacy wars.


  • Men's health platform Roman launches with $3.1M. MobiHealthNews. November 2, 2017. Available at https://www.mobihealthnews.com/content/mens-health-platform-roman-launches-31m
  • Nurx gets $36M for telemedicine for birth control, adds Chelsea Clinton to board. MobiHealthNews. July 11, 2018. Available at https://www.mobihealthnews.com/content/nurx-gets-36m-telemedicine-birth-control-adds-chelsea-clinton-board
  • Why CVS May Be Less Vulnerable to Amazon's Healthcare Attack Than Walgreens. The Street. June 29, 2018. Available at https://www.thestreet.com/markets/cvs-less-vulnerable-to-amazon-than-walgreens-14638465.

Related Videos
Concept of health care, pharmaceutical business, drug prices, pharmacy, medicine and economics | Image Credit: Oleg - stock.adobe.com
Image credit: rawpixel.com | stock.adobe.com
Medical team -- Image credit: Flamingo Images | stock.adobe.com
Semaglutide Ozempic injection control blood sugar levels | Image Credit: myskin - stock.adobe.com
© 2024 MJH Life Sciences

All rights reserved.