Amazon gains wholesale pharmacy licenses in multiple states
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Re: Amazon gains wholesale pharmacy licenses in multiple states
#2This is going to be interesting. Drug wholesaling is a tough business with razor thin margins. Wholesalers don't make much off of branded drugs because the big drug companies have most of the negotiating power. It's not unusual for their cut to be in the tens of basis points.
They make the most money off of generic drugs and often use arbitrage as a revenue source when price increases happen. Price increases for generic drugs have been weak lately and it's hurting them.[1]
[1]http://www.drugchannels.net/2017/09/drug-wholesalers-struggl...
Re: Amazon gains wholesale pharmacy licenses in multiple states
#3they will sell weed also
Re: Amazon gains wholesale pharmacy licenses in multiple states
#4This is going to be interesting. Drug wholesaling is a tough business with razor thin margins. Wholesalers don't make much off of branded drugs because the big drug companies have most of the negotiating power. It's not unusual for their cut to be in the tens of basis points. They make the most money off of generic drugs and often use arbitrage as a revenue source when price increases happen. Price increases for gene…
> razor thin margins
That's everything amazon does besides AWS
Re: Amazon gains wholesale pharmacy licenses in multiple states
#5sounds bad for the opioid problem
Re: Amazon gains wholesale pharmacy licenses in multiple states
#6This is going to be interesting. Drug wholesaling is a tough business with razor thin margins. Wholesalers don't make much off of branded drugs because the big drug companies have most of the negotiating power. It's not unusual for their cut to be in the tens of basis points. They make the most money off of generic drugs and often use arbitrage as a revenue source when price increases happen. Price increases for gene…
There's definitely savings that amazon could deliver.. take the (slim) wholesale profits + add the pharmacy profits.
They did something similar with books.. they cut out the wholesalers like ingram, and negotiated directly with the publishers.. allowing Amazon's retail price to be equal or less than Ingrams price that small book retailers pay... meaning even at 0% markup, amazon undercuts the small book retailers. (this was even before ebooks)
They could do the same here.. giving up the retail pharmacy profits.. undercutting every other pharmacy
Plus, at pharmacies efficiency could definitely be improved.. at the very least by reducing the number of $120k/yr pharmacists that are needed.
Re: Amazon gains wholesale pharmacy licenses in multiple states
#7Finally my dream of getting my cough legally prescribed meds cough dropped by a drone straight into my hands or mouth may come true!
Re: Amazon gains wholesale pharmacy licenses in multiple states
#8This is going to be interesting. Drug wholesaling is a tough business with razor thin margins. Wholesalers don't make much off of branded drugs because the big drug companies have most of the negotiating power. It's not unusual for their cut to be in the tens of basis points. They make the most money off of generic drugs and often use arbitrage as a revenue source when price increases happen. Price increases for gene…
The 3 big wholesalers (Amerisource, McKesson, Cardinal) also own/operate PSAOs that provide various value add services to independent pharmacies.
I would say PBMs are far more creative with arbitraging and financial engineering, because they deal directly with plan payers, pharmacists, distributors, pharma, DME mfr, and patients.
They offer price guarantee/inflation protection, rebates to payers; they have very granular reimbursement agreement with pharmacies along with performance guarantees or penalties depending on how much generics they dispense, there is copay assistance program with pharma and patients.
PBM is a complex business, but there's no huge pool of money sloshing around. Money is in pharma and overall healthcare systems.
This is a long game for Amazon.
Re: Amazon gains wholesale pharmacy licenses in multiple states
#9This is going to be interesting. Drug wholesaling is a tough business with razor thin margins. Wholesalers don't make much off of branded drugs because the big drug companies have most of the negotiating power. It's not unusual for their cut to be in the tens of basis points. They make the most money off of generic drugs and often use arbitrage as a revenue source when price increases happen. Price increases for gene…
The 3 big wholesalers (Amerisource, McKesson, Cardinal) also own/operate PSAOs that provide various value add services to independent pharmacies. I would say PBMs are far more creative with arbitraging and financial engineering, because they deal directly with plan payers, pharmacists, distributors, pharma, DME mfr, and patients. They offer price guarantee/inflation protection, rebates to payers; they have very granu…
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Re: Amazon gains wholesale pharmacy licenses in multiple states
#10They're coming for you too CVS and Walgreens.