Amazon: Medicines At Your Doorstep!

Jul 10, 2018 By Arbaaz M, Writer Intern
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What if you never had to sort your pills? What if everything was delivered to you, so you wouldn’t have to waste time standing in line?

These are questions that PillPack asks in its television advertisement, and answers through its products.

PillPack is a company that delivers medication as well as other pharmacy items directly to its customers. The medicines are sorted by dosage into small packets that fit into a dispenser.  Customers simply need to do is open the packet marked by day/time for their daily medication! In addition, the company works directly with doctors to monitor and manage refills, and with insurance companies to process bills and claims.

It may come as a surprise that something so convenient is so far from public attention. But that’s about to change. On June 28, Amazon announced its intention to buy PillPack in a deal valued at $1 billion in cash!

The Amazon Effect

The effects of a partnership between PillPack and Amazon could be far-reaching.

So far, PillPack charges the same for medications as other well-known pharmacies like CVS and Walgreens. But if Amazon’s acquisition of Whole Foods was any indication, that will change. Under Amazon’s ownership, PillPack will be more efficient, and this could translate into lower prices for consumers.

According to research firm Iqvia, 90% of prescriptions are filled at pharmacy counters. Clearly, today’s pharmaceutical industry is centered around brick-and-mortar stores. Although this may seem like a problem for Amazon, it’s actually an opportunity. With its acquisition of PillPack, Amazon will not just be changing the consumer experience – it will change the pharmaceutical industry as a whole. If the acquisition turns out to be a success, it will catalyze an industry-wide shift from physical pharmacies to online ones. But not everyone is a fan of such huge changes.

Future Of Neighborhood Stores

On the day that the acquisition was announced, Walgreens Boots Alliance, CVS Health, and Rite Aid lost $12.8 billion in market value. These are companies that have had years to build up their experience and their reputations. Now, they have to deal with a new competitor that challenges the very foundation of their industry. The responses have been mixed.

Some of these companies are going on the defensive. One example is Walgreens. PillPack gets its supplies from AmerisourceBergen, which happens to be partially owned by Walgreens. Earlier this year, Walgreens was reportedly in talks to buy AmerisourceBergen. If these talks continue, PillPack could potentially be left with no supplier and consequently, with no products to sell. Another example is CVS, which began offering next-day delivery of prescription drugs and same-day service in June as a way of competing with Amazon.

Others see Amazon as a potential friend instead of a foe. Tim Wentworth, the CEO of Express Scripts, a company that offers prescription drug plans, has shown interest in working with Amazon. PillPack already has the license to operate in all fifty states in the U.S.

It is easy to lose sight of the bigger picture in the midst of all these negotiations and strategical maneuvers. The acquisition of PillPack has forced pharmaceutical companies to look in the mirror – to question how they uniquely benefit their customers and to change for the better. No matter how the acquisition ends, we’ll all be closer to having our health at our fingertips.

Sources: NYTimes, CNBC, CNN, Techcrunch