After years of toying with the idea of selling medications online, Amazon may be finally getting serious about entering the multibillion-dollar pharmacy market due to the rise of consumer-driven health plans, CNBC reports.
The Seattle-based eCommerce giant is bringing on a new general manager to help formulate a strategy on how to break into the competitive pharma market, which includes pharmacy benefits management giants like Express Scripts and CVS Health, sources told CNBC.
Amazon also hired Mark Lyons two months ago from Premera Blue Cross to be the pharmacy benefits manager for Amazon employees, which might be later scaled out, sources said. The company recently started selling medical supplies and equipment in the U.S., and is currently recruiting pharma professionals for its “professional health care program” to ensure that the company is meeting regulatory requirements.
Stephen Buck, co-founder of GoodRx, an online platform that provides discounts on prescriptions, told CNBC that if executed well, the pharma business could be a $25 billion to $50 billion market opportunity for Amazon.
“I think Amazon would introduce a lot of transparency to what drugs really cost,” Stephen Buck said, though U.S. pharma regulations could prove challenging to navigate.
“Prescription transfer laws and e-prescribing make it a little more difficult than putting something in a cart and checking out,” Buck told CNBC.
In the late 1990s, Amazon had backed Drugstore.com, but the online platform was later sold to Walgreens, which eventually shut it down, CNBC wrote.
This time, it appears Amazon is testing a new venture into the pharma market by first trying it out in Japan. According to an article last month in The Japan Times, Amazon.co.jp started selling on its platform “category No. 1” drugs, which require consultation with a pharmacist before purchase.
“Before placing orders, customers need to report their symptoms and medical history via a form on Amazon’s site,” The Japan Times wrote. “Items will only be delivered after approval by a pharmacist.”
Amazon also teamed up with Japan pharmacy chains Cocokara Fine Inc. and Matsumotokiyoshi Holdings Co. to deliver cosmetics and other daily supplies within one hour after an order is placed, according to the publication.