Amazon changed how people buy books and clothing and the latest tech gear.
Now, many analysts think Amazon may be about to do the same for the prescription drug business.
Analysts started seeing signs last year that Amazon may soon enter the prescription drug market.
As of October, the online retail company had received approvals for wholesale pharmacy licenses in at least 12 states, reported the St. Louis Post-Dispatch.
In December, though, Amazon missed a deadline for a pharmaceutical distribution application in Maine, further clouding its plans.
The company has not yet commented publicly about its intentions.
Amazon’s entry into the prescription drug market would certainly shake things up — the way its purchase of Whole Foods Market is expected to do the same for the grocery delivery business.
Morgan Stanley estimates that mail-order prescriptions account for about $106 billion of the $465 billion U.S. pharmaceutical business.
Amazon’s entry into this market would boost the company’s bottom line.
But if and when Amazon opens up an online pharmacy, it will find the market dominated by Walgreens, CVS Health, and other companies.
Some analysts see Amazon’s current distribution capabilities and its Prime membership as strengths that could help the company capture a large share of the market.
It could also extend its reach by partnering with a pharmacy benefit manager such as ExpressScripts or directly with prescription drug manufacturers.
Saving money on online meds
It’s difficult to know what an Amazon online pharmacy would look like, especially since we don’t know the company’s plans.
But other companies have already entered this space, with clear benefits for consumers.
“The obvious benefit is that it’s convenient for the individual,” said Diana Graalum, PharmD, BCPS, clinical pharmacy manager at MedSavvy, an Oregon-based company that offers an online tool to compare medications by cost and effectiveness.
This is especially true for ongoing medications like statins or drugs for type 2 diabetes.
With automatic refills and regular shipments to your house, you no longer have to fit a trip to the pharmacy into your schedule.
You also save money on gas and all the impulse buys you usually make while waiting for your prescription to be filled.
Also, people may be less likely to miss doses if they always have their medications on hand. This can head off future health problems.
“For medications that can improve your survival, reduce your hospitalization likelihood, and increase your quality of life, we want to make those convenient and affordable so people can live a better, longer, healthier life,” Graalum told Healthline.
Online pharmacies can also cut out many of the steps between the manufacturer and consumers.
Those include the pharmacy benefit manager, the distributor, and the chain pharmacy.
This can reduce costs even more.
But not all medications purchased through an online pharmacy will be cheaper.
If you pay for your prescription drugs with health insurance, your copays will be whatever your insurer sets them at.
This can help you pay for costly brand-name drugs. But sometimes the copays on generic drugs are higher than what you might pay out-of-pocket for the same medication.
“We believe that a large percentage of Americans are paying more than they should be for their prescription medications,” said Joe Peters, president and chief executive officer of HealthWarehouse, an online pharmacy based in Kentucky that specializes in generic medications.
HealthWarehouse is a cash-only business and doesn’t accept health insurance. But Peters said the company can often offer many drugs cheaper than copays, especially for a 90- or 180-day supply.
This makes paying out-of-pocket a good deal for many people.
“It’s not just for those who are uninsured,” Peters told Healthline. “Right now, there are a huge number of people who are underinsured.”
As with other reputable online pharmacies, HealthWarehouse carries the Verified Internet Pharmacy Practice Sites (VIPPS) seal through the National Association of Boards of Pharmacy.
Challenges to buying meds online
While shopping online avoids the hassles of waiting in line or driving through traffic, you do lose some of the personal touch of a brick-and-mortar pharmacy.
“All medicines are intended to help us and not to harm us, but if taken incorrectly or missed, they can do harm,” said Graalum. “The interaction with a pharmacist is very useful to help avoid adverse effects.”
HealthWarehouse handles this step by offering counseling to all customers when they check out online. If they have any questions, one of the company’s pharmacists will give them a call on the phone.
People may also be turned off from buying their medications online because of the large amount of personal information they have to enter the first time they shop at an online pharmacy.
This includes the usual name, address and payment information, but also health information such as drug allergies, other drugs they are taking, and their doctor’s information.
While this is no different than what you would give to your neighborhood pharmacy, some people might balk at sharing this with Amazon.
As people become more comfortable interacting with their doctor and other health providers online, though, more will turn to online pharmacies.
The high cost of prescription drugs may help push this forward.
“When more people get that sticker shock — higher copays, higher deductibles — they’re going to start looking and shopping around,” said Peters.
For now, online pharmacies focus on filling ongoing prescriptions. This is partly due to cost because their overhead is lower when filling a 90- or 180-day supply.
But it’s also a matter of timing.
After receiving a prescription, HealthWarehouse ships the medication in one to three days. This works if you already have a supply of pills on hand.
But if your doctor prescribes an antibiotic for strep throat or pneumonia, you need it that day.
Graalum thinks that Amazon could use its drone delivery system to make that happen.
“Someday we might have a situation where your doctor prescribes a medication,” said Graalum, “and a drone flies up to your house and drops it off as you arrive home.”