Amazon Pharmacy: How the Company’s Newest Program Keeps Customers Front and Center
Updated: Dec 9, 2020
The conscientious self-care movement among Americans was gaining traction long before COVID-19 jolted people into thinking more proactively about their health. Shifts in nutritional preferences—made easier by access to wholesome, organic foods—is just one indication that individuals are taking their health into their own hands.
Now, Amazon has made that effort even simpler by launching Amazon Pharmacy, an online pharmacy that delivers prescription medications just like any other item ordered from Amazon. Delivery is a perfect fit for those “maintenance” medications individuals receive every month—similar to a replenishment-type program. But, Amazon Pharmacy has also accounted for unexpected prescriptions that may arise (e.g. antibiotics, anti-inflammatories, etc.).
This companion initiative allows members to obtain their prescriptions from more than 50,000 brick-and-mortar locations—and not just community pharmacies, as one might expect. Even big-box pharmacies such as CVS, Walgreens, Walmart, and Rite-Aid are participating in the in-store option.
Healthcare: Ripe for Disruption
While these pharma entities are outwardly showing brand confidence via their cooperation, it’s evident that Amazon’s induction into the prescription medication realm represents an inevitable shift in their business models. Initiating a pharmacy presence, in such a well-established industry, is further evidence Amazon is progressing its customer-centric dedication in every way possible.
Tom Furphy, CEO and Managing Director of Consumer Equity Partners and CEO of Replenium, and Kevin Coupe of Morning News Beat, returned to discuss Amazon’s overall momentum on The Innovation Conversation—a virtual discussion platform that explores how consumers and retailers alike are impacted by the rapidly-changing, technology-driven digital landscape.
“When you look at what Amazon is doing across the board, this was very logical. Healthcare is one of the top expenditures for families. It’s wrought with inefficiency; it’s expensive. But, it’s an industry that is ripe for disruption. For the way Amazon thinks about the customer,” states Furphy.
“If [Amazon’s] goal is to be inextricably interconnected in every part of our lives, clearly this is the place to be,” asserts Coupe.
How Does Amazon Pharmacy Compare to “Traditional” Pharmacies?
Currently, Amazon Pharmacy delivers to 45 states, with only Hawaii, Illinois, Minnesota, Kentucky, and Louisiana yet to jump on board—yet likely soon to follow. Most insurance policies will be accepted, although insurance is not necessarily required. According to Amazon, estimated cost savings with Amazon Pharmacy will be up to 40% for brand name drugs and 80% for generic. Health savings accounts (HSAs) and flexible spending accounts (FSAs) can also be applied.
Of course, one concern individuals may have turns once again to data privacy. Just like any other pharmacy or medical establishment, privacy rights will be protected under HIPAA—another area in which Amazon is transforming digital capabilities within healthcare.
“Look at all Amazon is doing in healthcare. The app they're using for employees, that we know will ultimately turn to the consumer range of what Alexa does. All the HIPAA compliance skills in Alexa; again, the data is protected. And then you have to consider what they are doing on the AWS side with Comprehend Medical, what they're doing with data lakes, cancer research, COVID research... It's pretty awesome, frankly, the scope of what Amazon is doing and their ability to bring all this to a complete healthcare solution,” shares Furphy. “It's clear it's going somewhere.”
The only “non-pharmacy” aspect is that opioids will not be distributed through Amazon Pharmacy—an influential move, considering the epidemic that has ravaged communities across the nation.
Creating a New Essence of Familiarity
Some critics argue Amazon Pharmacy is just one more attempt to edge out the “little guy.” Furphy contends that disruption is in no way punching down. In fact, it’s needed for every existing pharmacy to progress in an innovative society—from both a behind-the-counter and front-of-the-counter perspective.
“Independent pharmacies have been differentiated in the location, the relationship with customers; a familiarity—which has been a strength. And yet, technology enables us to know a lot more about someone. A platform like Amazon, a program like Prime, where you feel a membership to something, that creates a lot of closeness and familiarity also. You can't just sit on past differentiators. You have to keep focusing on the customer. Keep pushing the envelope. Keep pushing ways to serve the customer.”
Watch for future Innovation Conversations between Kevin Coupe and Tom Furphy by subscribing to the Morning News Beat YouTube Channel.