Will Amazon Enter – and Dominate – the Pharmacy Industry?


No, Amazon has not made an “official” announcement that they are entering the mail-order-drug or PBM market. However, it has been widely reported that Amazon has its eyes on entering the pharmacy industry from both a refill and PBM (pharmacy benefits manager) standpoint. As CNN Money recently speculated, “Amazon could also take advantage of its considerable heft and surging stock price to acquire a would-be rival in the pharmacy business like CVS or Express Scripts. Or it could do a joint venture.”

How would this affect retail pharmacies and even the pharmacy industry? Amazon pharmacy

Wall Street analysts predict that drug store chains and pharmacy-benefit managers are at risk. MarketWatch reports, “After transforming such industries as publishing, consumer electronics and cloud services – and decimating key players along the way – Amazon has built a reputation for dominance.”  

CNN Money shared this view, “Two analysts at Leerink, a boutique investment firm that focuses on the health care industry [reported that Amazon will "almost certainly] get into the prescription drug distribution business within the next two years.”  The article noted that Amazon’s appetite for brick-and-mortar acquisitions and partnerships, e.g., Whole Foods (acquisition) and Kohl’s (partnership) leaves pharmacies vulnerable. David Larsen, another Leerink analyst quoted in the CNN Money article, pointed out in his report that “Amazon is nothing if not disruptive.”

So, is the pharmaceutical business forecast looking bleak?

CNN Money says maybe not.

CVS CEO Larry Merlo said on the company's most recent earnings conference call with analysts in August that "there are many barriers to entry when you're looking at pharmacy."

And Express Scripts CEO Timothy Wentworth told analysts in July that setting up a pharmacy benefits management company is more than just "dispensing drugs." Entering the business "requires you to figure out how not [emphasis added] to dispense drugs or to dispense the right drugs as much as it does to dispense them," he said.

In other words, Amazon may not want to deal with the regulations that come with selling medication. It's a lot easier to sell gadgets, make TV shows, run a cloud-hosting unit and do all the other myriad things Amazon now does.

It wasn’t all gloom and doom in the MarketWatch article either: “Those who are skeptical of Amazon’s potential pharmacy entry have noted Amazon’s difficulty breaking into highly regulated markets [such as alcohol distribution].”

What can independent pharmacies do now in the face of such uncertainty?

Now is not the time close up shop, nor is it time to “wait and see” what happens.   Every business owner knows that success in a competitive enterprise is about staying ahead of the curve.  A wait-and-see approach may be too late.

One option: consider ways to beat Amazon at its own game! With RxASP 20 strip packaging technology, for example, independent pharmacies can expand their geographic reach and grow their customer base, while improving customer service and medication adherence at the same time.  

Community pharmacies can take advantage of cutting-edge strip packaging and compliance with just-in-time delivery – and offer the personalized service customers want. As Forbes magazine recently pointed out, “Community pharmacies have deep relationships with patients -- and Amazon never will.”

Independent pharmacies already take pride in providing personalized customer service and patient care.  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.  

Customers of independent pharmacies know that their pharmacy and health-care needs are in the most capable and caring hands.

Don’t wait!

If you would like to learn more about how RxSafe’s innovative pharmacy automation technology can help you edge out the big competitors – and have a big impact on your profits, call 877-797-2332 or click through to find out about our webinars, how the IRS Code Section 179 deduction can put profits in your cash register now, or check out our FAQs.


RxSafe

RxSafe is the leader in robotic automation that improves patient safety and boosts profitability for retail and outpatient pharmacies. Our technology solutions include the RapidPakRx™ adherence strip packager, the RapidCardRx™ system for filling single or multi-med blister cards, and the RxSafe 1800™ high-density storage and retrieval system. Learn more at www.rxsafe.com.
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