This Is How Amazon Could Invade the Pharmacy Business
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Re: This Is How Amazon Could Invade the Pharmacy Business
#2[deleted]
Re: This Is How Amazon Could Invade the Pharmacy Business
#3It should be easy for Amazon to start delivering my meds: Convince my employer. Right now, I walk two blocks to Target for new prescriptions, and I'm required to buy any refills from Express Scripts. My clinic also has a pharmacy on site that I could use. I'm betting that refills (i.e., stuff that's taken chronically) is the bulk of the prescription drug business, but it would be interesting to know if that's true or not. I don't see much fat to trim.
Re: This Is How Amazon Could Invade the Pharmacy Business
#4There are lot of stories going around on this, all of which are based on the client note by Leerink’s Ana Gupte which was released on Friday, setting cat among the pharma industry pigeons:
http://www.barrons.com/articles/amazon-pharmacy-could-make-w...
This article re-packages all the points from the client note like shipping, generics, B&M stores etc without even attributing to the original report.
Re: This Is How Amazon Could Invade the Pharmacy Business
#5It should be easy for Amazon to start delivering my meds: Convince my employer. Right now, I walk two blocks to Target for new prescriptions, and I'm required to buy any refills from Express Scripts. My clinic also has a pharmacy on site that I could use. I'm betting that refills (i.e., stuff that's taken chronically) is the bulk of the prescription drug business, but it would be interesting to know if that's true or…
"I don't see much fat to trim."
Well, the obvious one is that Express Scripts probably isn't already sending you a package of other stuff every week or so to which a bottle of pills could be added at little or no increased cost, nor do they likely have the clout with shippers that Amazon does.
Yeah, not everyone gets an Amazon package every week, but enough people do that it's going to add up.
Re: This Is How Amazon Could Invade the Pharmacy Business
#6It should be easy for Amazon to start delivering my meds: Convince my employer. Right now, I walk two blocks to Target for new prescriptions, and I'm required to buy any refills from Express Scripts. My clinic also has a pharmacy on site that I could use. I'm betting that refills (i.e., stuff that's taken chronically) is the bulk of the prescription drug business, but it would be interesting to know if that's true or…
I suspect Amazon isn't overly concerned with trimming the fat in this case (Walmart took out a lot of what was left of that when they entered the business). At break-even in pharmacy, while not trimming so much as a dollar of fat, Amazon benefits big. Here's how:
- Increased shipping volume. This adds to their market leverage and it can bolster their own logistics business over time. Anything Amazon can do at scale, while at least breaking even, is a very big benefit to their flywheel.
- Another entry into the home, into a person's life. And in this case, a far more important one than most purchases. If Amazon can sell a 67 year old a prescription and get into her home, they're no doubt betting they can also sell her an artificial intelligence tool in the coming years (maybe it takes three years of advertising the Echo on the side of the prescription delivery box to convince the customer).
- It becomes a very sticky repeat business. People will stay with those so long as you don't treat them horrendously. That buys Amazon time to figure out new ways to make money in the segment. It may also be a long-term play on the fact that the US is guaranteed to increasingly shift to government healthcare, as the ACA or equivalent walks its way up the income ladder by necessity; Amazon may see an angle in that.
- Walmart is finally becoming a serious online competitor. They're growing at 2x the rate of Amazon, with about 1/3 the online retail sales. Walmart's online business appears to be kicking into another gear. They've got a $20 billion per year pharmacy sales business. Then there are obviously the other far larger pharmacy-centric giants (the big three have ~72% of the pharmacy business). Anything Amazon can do to press them all in that segment, is a win competitively. To grow at this point, Amazon has to take from everyone else, as US consumer spending is expanding relatively slowly.
Re: This Is How Amazon Could Invade the Pharmacy Business
#7It should be easy for Amazon to start delivering my meds: Convince my employer. Right now, I walk two blocks to Target for new prescriptions, and I'm required to buy any refills from Express Scripts. My clinic also has a pharmacy on site that I could use. I'm betting that refills (i.e., stuff that's taken chronically) is the bulk of the prescription drug business, but it would be interesting to know if that's true or…
Remember that Amazon loves low-margin businesses. You might not see much fat to trim, but I'm sure Amazon can save a few cents here and there.
Re: This Is How Amazon Could Invade the Pharmacy Business
#8It should be easy for Amazon to start delivering my meds: Convince my employer. Right now, I walk two blocks to Target for new prescriptions, and I'm required to buy any refills from Express Scripts. My clinic also has a pharmacy on site that I could use. I'm betting that refills (i.e., stuff that's taken chronically) is the bulk of the prescription drug business, but it would be interesting to know if that's true or…
I suspect Amazon isn't overly concerned with trimming the fat in this case (Walmart took out a lot of what was left of that when they entered the business). At break-even in pharmacy, while not trimming so much as a dollar of fat, Amazon benefits big. Here's how: - Increased shipping volume. This adds to their market leverage and it can bolster their own logistics business over time. Anything Amazon can do at scale,…
I would love to see Walmarts online growth split apart from the acquisition of Jet. Chance's are they are riding the coattail of that acquisition and once that drys up the only thing left is to spend a ton of money on customer acquisition to fuel "growth". Having both used Amazon and Jet, I find that Amazons customer support and checkout experience is significantly better then Jets.
Re: This Is How Amazon Could Invade the Pharmacy Business
#9It should be easy for Amazon to start delivering my meds: Convince my employer. Right now, I walk two blocks to Target for new prescriptions, and I'm required to buy any refills from Express Scripts. My clinic also has a pharmacy on site that I could use. I'm betting that refills (i.e., stuff that's taken chronically) is the bulk of the prescription drug business, but it would be interesting to know if that's true or…
"I don't see much fat to trim." Well, the obvious one is that Express Scripts probably isn't already sending you a package of other stuff every week or so to which a bottle of pills could be added at little or no increased cost, nor do they likely have the clout with shippers that Amazon does. Yeah, not everyone gets an Amazon package every week, but enough people do that it's going to add up.
How many people get weekly refills? I️ thought monthly would be a lot more efficient and common?
Re: This Is How Amazon Could Invade the Pharmacy Business
#10Amazon is spreading its wings and it won't stop at anything. The idea of using Alexa seems far-fetched, but who knows?!