Daily Insights

Amazon’s Prescription for Potential

By: Mackenzie Baker | Dec 08, 2020

Amazon takes a slice out of the pharmacy industry by launching a new, quick service that fills prescriptions and medications. 

Amazon Pharmacy allows consumers to get prescriptions filled and shipped to their home via the service. Amazon Pharmacy will be tied into Amazon Prime, meaning members can have their prescriptions filled and sent to them with free two-day shipping. The service launches at a key time in the pharmaceutical industry as more consumers opt for mail-in prescriptions during the Coronavirus. As such, the industry could face a permanent shift to online orders, priming Amazon Pharmacy for demand. The new business will put Amazon head to head against brick and mortar leaders like CVS and Walgreens, both of which have made multiple efforts during the pandemic to digitize services in order to retain relevance. However, with the introduction of Amazon Pharmacy, competing businesses may have to do more in order to sustain connections, convenience, and consumer loyalty, according to a Gartner report. 

Amazon Pharmacy has been in the works since 2018, when Amazon acquired PillPack, an online medication service. Amazon weaved PillPack’s infrastructure, software, and fulfillment centers into its pharmacy business, which allows the operations to quickly get off the ground. For its initial launch, Amazon Pharmacy will only serve consumers in 45 U.S. states who can enter their insurance information and have a doctor send their prescription orders through the site. To cut down on potential fraud or underhanded prescriptions, Amazon will verify physician’s orders and not fill any Schedule II classified medications, which includes most opioids. Additionally, Amazon will not share any consumer data needed to fill prescriptions with advertisers or marketers, though some consumers may still feel uncomfortable putting information into the database at all. As Amazon has a history of using consumer data to personalize ads and offer product discounts, it may have to reevaluate its data strategy for its pharmaceutical business in order to keep consumer trust. 

The launch of Amazon Pharmacy could boost the tech titan’s image as a well-rounded, lifestyle platform, allowing consumers to shop for everything from cold weather apparel to cold medicines. Though the service is digital-only for now, Amazon could emulate its blueprint for its grocery service and potentially create brick and mortar pharmacy locations, too.