Friday, 22 December 2017

Will Amazon’s Next Big Move Be Pharmacy Delivery?

Whether you’re looking for the latest bestselling novel, a kayak or a coffin, you can buy just about anything on Amazon. If their latest endeavor is successful, the Internet giant may also be where you turn when you need prescription medication. Reports indicate Amazon has obtained wholesale pharmaceutical licensing in 12 states within the past year. What could Amazon be offering in the pharmaceutical industry, and what will this mean for other distribution centers?

Special report by Megan Ray Nichols

Same-Day Delivery

Pharmaceutical delivery isn’t a strange concept — most independently owned pharmacies have offered prescription delivery as a free service for decades. Even if you live in a big city, you can probably find at least one little pharmacy still offering that sort of service.

Amazon has been debating the idea of pharmaceutical deliveries for a quite a few years now — it’s a topic that’s come up at nearly every board meeting for the past several years. They’ve even started offering same-day delivery of non-prescription pharmacy items from Bartell Drugs in Seattle as a test platform.

When you look at this information, along with the fact that Amazon is seeking — or, perhaps, has already hired — a health care program manager, it appears they’re looking to make the move into pharmacy delivery. This move could benefit patients who are unable to make the trip to their local pharmacy, or those who require medication that is not easy to obtain locally. From a logistical perspective, the most important part of pharmaceutical delivery is keeping the medications secure, especially any medication that needs to be temperature-controlled throughout shipment.

Wholesale Licensing

Amazon’s move toward obtaining pharmaceutical licenses is the first step toward creating a pharmacy distribution network where consumers can have their medications, medical devices or other prescription items delivered directly to their home, rather than having to visit a pharmacy in person.

If this is the direction Amazon is heading, they have quite a few more steps to complete. First, they would need to obtain wholesale pharmacy licenses in the remaining 38 states — a task experts predict could take up to two additional years. Amazon would also have to obtain pharmacy licensing to enable them to fill individual prescriptions.

Some sources also suggest the Internet giant is looking to either purchase a pharmacy benefits management company, or partner with one. If you’re not familiar with the term, a pharmacy benefits manager, or PBM, handles the communication between pharmacies and insurance companies — making sure the prices on the medication are correct, and that the insurers are paying or reimbursing pharmacies where appropriate.

Specialty Pharmacy

Amazon may not be moving into traditional pharmacy services — all this planning and license acquisition may be a precursor to the company moving into specialty pharmacy services instead. Specialty pharmacy covers things like complicated drugs and treatments, administered at home, that may not be available at your neighborhood pharmacy. Things like treatment for HIV/AIDS, blood diseases, MS and cancer all fall under the specialty pharmacy umbrella.

By stepping into the ring, Amazon could potentially change the game, making it easier and possibly more affordable for patients to obtain their necessary medications while adding millions of dollars of additional revenue to their bottom line each year.

By way of comparison, CVS reports specialty pharmacy accounts for approximately $50 billion of revenue for them every year. Experts are predicting this form of pharmacy could bring in more than $240 billion a year by 2021. The majority of this type of pharmaceutical distribution takes place by mail — which is where Amazon excels.

It is important to note that this is all speculation — industry experts are looking at the steps Amazon has taken and the licenses it has received because this information is all public record, but the company has yet to make an official statement about its intentions. It is possible they won’t announce anything until after their preparations are complete, or even just before they’re ready to go live.

They’re playing their cards close to the chest with this one, but if they are planning to step into the world of mail-order pharmacy, Amazon could quickly become one of the biggest competitors in the field.

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