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Could Prescription Drugs Be Amazon’s Newest Category?

Written by: Rebecca Bowden on Tuesday, May 30, 2017 Posted in: Home Infusion, Specialty Pharmacy

What started out as “Earth’s Biggest Bookstore” in 1995 transitioned, in less than a decade, to become the source of “Earth’s Biggest Selection,” and today, according to the most recent annual report, seeks to be “Earth’s most customer-centric company.” Perhaps this “customer obsession,” as it’s described in annual reports, is what drives Amazon.com to continue to foray into new markets, the latest of which may be pharmaceuticals.

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Estimated at more than $400 billion annually, the U.S. pharmaceutical industry is obviously a market worth pursuing, and according to CNBC, the online giant has been considering the move for some time. Recently, though, Amazon hired Mark Lyons to serve as the company’s pharmacy benefits manager and is looking for someone to fill a regulatory and compliance position for its professional healthcare program, so it seems likely that the company is continuing its advance into pharmacy.

Already, Amazon sells professional medical supplies and consumer medical supplies and equipment, so prescription medications aren’t the huge stretch they might have been in the past. However, Adam Fein, PhD, CEO of Drug Channels Institute, that “Amazon has limited feasible options for disrupting pharmacy and PBM markets.”

While Fein recognizes that it’s unwise to discount Amazon’s recent efforts, he doesn’t believe specialty pharmacy is a viable option: “It is also unlikely that Amazon can compete in the higher margin, higher touch business of dispensing specialty pharmaceuticals. A specialty pharmacy’s personalized and complex services are unlike Amazon’s highly scalable yet impersonal infrastructure.”

I agree that specialty pharmacy isn’t likely to be a good fit for Amazon, but like Fein, I realize we can’t ignore the online supplier as a potential competitor. However, until Amazon reveals more about its plans, all we can do is provide the best possible care for patients while closely monitoring business metrics to ensure ongoing profitability.

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