On November 17, 2020, Amazon announced the launch of Amazon Pharmacy, entering the pharmacy industry with a bang. Stocks for pharmacy chains like CVS, Walgreens, and Rite Aid fell instantly (some by double digits), while differing opinions quickly emerged. Some were grateful for the convenience of another low-cost prescription option that will deliver meds to their door for free. Others were worried about the potential for prescription fraud and the impact the move could have on their community pharmacies. After all, competing with big chains like Walgreens and CVS can be hard enough. Amazon is on a different level.
Independent pharmacies need to pay attention. Many took notice when Amazon purchased PillPack in 2018 and announced their own line of generic medications in 2019. But this move could have a significant impact on independent pharmacies if they don’t take action now.
What Amazon Pharmacy Offers Patients
Amazon Pharmacy capitalizes on a need many patients have right now: at-home convenience. Their physician can send a prescription directly to Amazon Pharmacy, and that prescription will show up on their doorstep two days later. For pharmacy patients who don’t take advantage of community pharmacy delivery programs (or who simply don’t have access to one), that’s big. Now that we’re hearing talk of further lockdowns and mandates as the pandemic worsens, prescription delivery is a necessity.
Amazon is also appealing to customers in another pandemic-affected area: their wallets. Thanks to a relationship with Inside Rx, Amazon has negotiated discounts on both generic and brand name medications. For many patients, the discounted price will be less than their insurance co-pays. For uninsured patients, the price could be significantly less than they are used to paying.
What Amazon Pharmacy Cannot Offer Patients
Amazon Pharmacy is limited in what it can offer, however. While patients can get most commonly prescribed medications, Amazon will not deliver Schedule II drugs. Pain medications like Vicodin, Demerol, and OxyContin fall into this category, as do stimulants like Adderall.
Because it is an online store, Amazon Pharmacy also cannot currently offer anything that falls under the clinical care umbrella. Immunizations, point-of-care testing, medication therapy management — these all still take place under pharmacy roofs, not in the home.
For all its features and discounts, there is another thing Amazon cannot offer: you. While Amazon customers will have access to pharmacists through an online portal or over the phone, they won’t have access to their pharmacist. And, as anyone who has seen a different physician in a large provider group can tell you, there’s a difference between seeing a doctor and seeing your doctor. Any pharmacist can look at a medication list and patient history and make good decisions. But a strong pharmacist-patient relationship improves patient outcomes. When patients trust their pharmacist, they act on the pharmacist’s good decisions and improve their health.
The Potential Impact on Independent Pharmacies
So where does Amazon Pharmacy leave independent pharmacies? It’s not pretty, but it’s not hopeless. Let’s dispense with the bad news first. Amazon will likely be able to offer medications cheaper than most independent pharmacies, particularly for patients without insurance. As most mom-and-pop retail stores found out, there’s no competing with Amazon on price. The way independent pharmacies survive this is by embracing the things they offer that Amazon cannot. And that’s the good news.
Becoming a New Era Pharmacy could lessen Amazon Pharmacy’s impact on your business. Making the shift from dispensing to clinical care services could offset any potential loss in prescription revenue. As Mark McCurdy, RPh, said in his care planning webinar, “Don’t fit clinical care into your dispensing schedule. Fit dispensing into your clinical care schedule.”
Also, relationships matter. Many patients who use independent pharmacies do so because they want to know their pharmacist — and they want their pharmacist to know them. Amazon Pharmacy will have data on their patients, but you have a name, a face, and a story for each one of yours. For some people, that doesn’t really matter. But you’d be surprised how many people think it does matter.
Amazon saw a huge sales boost during the pandemic because of stay-at-home orders and general fear of going to retail stores. Ordering products and waiting a few days for them to arrive has become a norm for many people. With planning, they’ll adjust to ordering medication that way also.
That’s why pharmacies have to find ways to set themselves apart. They have to offer the things that patients can’t get with free 2-day delivery — things like compassionate clinical care and expertise. That’s how the independents survived competition from big box stores like CVS and Walgreens. That’s how they will survive Amazon.