Amazon shakes up pharmacy landscape with launch of online prescription service

CVS Health and Walgreens are already feeling shock waves from the opening of Amazon’s new online pharmacy.

The e-tail titan is launching Amazon Pharmacy, which allows U.S. customers to order prescription medications for home delivery, with free delivery for Amazon Prime members. The new offering is Amazon's biggest push to date into a $300 billion market that is dominated by pharmacy giants such as CVS Health, Walgreens and Rite Aid, along with supermarkets and discounters that offer prescriptions, such as Walmart.  

 According to CNBC, shares of  CVS fell 7.5% in premarket trading following Amazon's announcement on Tuesday, Nov. 17, about the new service. Similar share declines occurred in premarket trading of other major drugstore chains such as Walgreens (more than 10%) and Rite Aid (11%).

Amazon Pharmacy is a distinct offering from PillPack, the online pharmacy startup Amazon acquired in 2018. Now known as PillPack by Amazon, it specializes in delivering presorted dose packaging for managing multiple daily medications for chronic conditions. 

“As more and more people look to complete everyday errands from home, pharmacy is an important and needed addition to the Amazon online store,” said Doug Herrington, senior VP of North American consumer at Amazon. “PillPack has provided exceptional pharmacy service for individuals with chronic health conditions for over six years. Now, we’re expanding our pharmacy offering to Amazon.com, which will help more customers save time, save money, simplify their lives, and feel healthier.”

Using a secure pharmacy profile, Amazon customers can add their insurance information, manage prescriptions, and choose payment options before checking out. Customers can ask their prescriber to send new or existing prescriptions directly to Amazon Pharmacy for fulfilment, with purchases made by confirming the request online.

Medications require a prescription from a licensed health care provider. Amazon Pharmacy says it securely manages customer information in compliance with HIPAA, and does not share protected health Information outside of the pharmacy for advertising or marketing purposes without clear permission from the customer. The service does not deliver Schedule II controlled medications, which includes most opioids.

Customers can browse the Amazon Pharmacy store for branded and generic versions of medications in different forms or dosages. Before checking out customers can compare their insurance co-pay, the price without insurance, or the available savings with the new Prime prescription savings benefit to choose their lowest price option.

Amazon Pharmacy also offers online self-service help options combined with phone access to customer care at any time. Pharmacists are available 24/7 to answer questions about medications.

In addition, Amazon Prime members can obtain savings on medications at Amazon Pharmacy when paying without insurance, as well as at over 50,000 other participating pharmacies nationwide, including CVS, Walgreens, Rite Aid, and even chief Amazon rival Walmart. The Amazon Prime prescription savings benefit saves members up to 80% off generic and 40% off brand name medications when paying without insurance. Prime members will have access to their prescription savings at checkout on Amazon Pharmacy.

“We designed Amazon Pharmacy to put customers first – bringing Amazon’s customer obsession to an industry that can be inconvenient and confusing,” said T.J. Parker, VP, Amazon Pharmacy (and former cofounder of PillPack). “We work hard behind the scenes to handle complications seamlessly so anyone who needs a prescription can understand their options, place their order for the lowest available price, and have their medication delivered quickly.”