There’s Amazon Fresh, Amazon Video, Amazon Web Services, and much, much more. Is it just a matter of time then, before the e-commerce giant begins selling prescription drugs?
According to a new 30-page report by Goldman Sachs, outlined by CNBC, the potential is certainly there.
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Compiled by five research analysts, the document reportedly discusses how Amazon could get a foothold in the industry and what impact it might have.
Among the findings, Goldman Sachs suggests that targeting the work of pharmacy benefit managers (PBMs) could be a good entry point for Amazon and an area to quickly prove its value. And as an independent third-party, customers may get more price transparency — a quality lacking from PBMs today.
There are other benefits, so to speak. If it moves into prescription drug delivery, Amazon could draw on its powerful supply chain to fast track home delivery times. Goldman Sachs – and others – also point to the possible integration of Amazon Echo, its web services, and telehealth.
While there’s no indication that the company will follow this path, it has been highly ambitious in the healthcare space — particularly in 2017.
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Amazon has reportedly been hiring top pharmacy experts, ahead of an expected push into this space. In late July, for example, the team recruited Missy Krasner, vice president and managing director of Box’s healthcare and life sciences group. Box sells cloud management products and services.
CNBC also reported last month that Amazon has created a secret lab called 1492, focused on healthcare technology. That could include tools for making EHRs more accessible to physicians and patients and/or building a telemedicine platform.
Amazon’s entry into healthcare is an exciting prospect, but there’s no denying it’s a tough market to crack. There are inherent complexities and, as highlighted by the Goldman Sachs report, a discrepancy exists between Amazon’s young and tech-savvy user base and the older generations that rely most on prescription medicines.
Lorrie Carr, chief commercial officer of Boston-based ZappRx and a previous divisional VP of enterprise specialty sales and product management at Walgreens, said she sees two schools of thought on Amazon’s move into healthcare.
“One is that Amazon may displace current pharmacies given their technological capabilities and connection to consumers,” Carr wrote via email in June. “The other is that the pharmacy environment is too complex for them to be as disruptive as they’ve been in other industries. Selling to consumers is very different from selling to patients, in terms of the regulatory environment and the complexities of ‘who pays for what’.
“I tend to fall somewhere in the middle of these two schools of thought,” Carr said. “Any ‘winners’ or ‘losers’ would be determined by the business model Amazon chooses. At this point, it is way too soon to tell.”
Goldman Sachs has some inside access. The firm reportedly helped Amazon with its $13.7 billion acquisition of WholeFoods in June and its analysts have high expectations for its future growth. In July, the firm projected Amazon’s annual sales would grow 21.5 percent from 2016 to 2019.
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