Amazon rocked the pharmacy world in a big way last month with the announcement of its estimated $1 billion acquisition of PillPack, a 5-year-old company that made a name for itself with pre-sorted medication dose packaging delivered directly to patients’ homes.
The news, which broke June 28, sent pharmacy stocks tumbling, with shares of CVS, Walgreens and Rite Aid losing a combined $11 billion of market value in same-day trading. Spokespeople for the retail drug chains mostly downplayed the deal.
CVS said it already offers multi-dose packaging that can be mailed to a patient’s home or local pharmacy for pickup. Walgreens CEO Stefano Pessina said the company is “not particularly worried” about Amazon/PillPack, arguing that “the pharmacy world is much more complex than just delivering certain pills or packages.”
Nobody would argue that the pharmacy business, with its maze of insurance and regulatory considerations, is a much bigger hill to climb than selling consumer goods. However, Amazon has years of supply chain and logistics experience under its belt, not to mention a well-deserved reputation for shaking up markets, while putting the “cost squeeze” on established players.
PillPack’s CEO, TJ Parker, said the acquisition will boost his company’s mission to help patients “take the right medication at the right time” and live healthier lives. “Together with Amazon, we are eager to continue working with partners across the healthcare industry to help people throughout the U.S. who can benefit from a better pharmacy experience,” he said.
Can Independent Pharmacies Compete?
The PillPack deal is hardly Amazon’s first foray into pharmacy, or brick-and-mortar retail, for that matter. In 1999, Amazon acquired Drugstore.com (which it eventually sold to Walgreens). Just last year, Amazon purchased Whole Foods, and so far, grocery stores haven't gone out of business en masse.
So how does the Amazon/PillPack deal impact independent community pharmacies?
At RxSafe, we see three major takeaways from Amazon’s move.
- Patients aren’t exactly in love with mail order pharmacy. Despite decades of mail-order prescription availability, most patients still get their medication from a local pharmacy. Plus, mail delivery presents the risk of delay and theft, as well as potential exposure of medicines to heat or cold that exceeds pharmaceutical manufacturer recommendations.
- Amazon can’t deliver face-to-face interaction. Independent pharmacies already take pride in fostering deep, in-person relationships with patients, which Amazon/PillPack can’t possibly match. And no amount of logistical expertise can rival a community pharmacy’s ability to provide personalized customer service, resulting in better quality care and lower costs.
- You can beat Amazon at its own game! With RapidPakRx™ strip packaging technology, independent pharmacies can expand their geographic reach and grow their customer base, while improving customer service and medication adherence at the same time. Once patients have a PakMyMeds™ box, they are far less likely to transfer to Amazon/PillPack. And patients already prefer their local pharmacist.
Strip Packaging for Independent Pharmacies
“RapidPakRx is the first-ever system for adherence packaging designed specifically for retail pharmacies to complete a rapid, on-demand fill at the lowest possible cost,” says William Homes, Founder and CEO of RxSafe. “Adding RxSafe’s automation technology means that independent pharmacies can tangibly demonstrate to customers a level of tailored services that online/mail order pharmacies and big-chain stores simply cannot.”
Designed and manufactured in the USA, RapidPakRx uses universal cartridges and built-in vision inspection. That means no more “exception” trays or remote tray filling stations, no more wasted time to load trays, no more pill-at-a-time loading, and no more errors from hand filling trays.
In as little as 10 minutes, from label printing to handing the prescription to the customer, RapidPakRx can produce a 30-day supply of medication packaging for as little as $5, including labor and materials. “We have the lowest consumable costs in the industry, with the clearest labeling and easiest-to-open pouch,” Holmes adds.
“To our community pharmacy friends: if you’re worried about losing business to companies like Amazon/PillPack, be aware is that the best defense is a good offense,” Holmes says. “And remember: patients first. If you get a call to transfer a prescription, always call the patient to confirm that the request came from them.”
RxSafe also offers adherence strip packaging marketing services, known as PakMyMeds. We can help you in your marketing efforts with packaging, collateral and best-in-class marketing assistance to make adding an adherence program to your pharmacy’s offerings as simple as possible.