Amazon.com Inc (AMZN) launched Amazon Pharmacy on Tuesday, an online pharmacy that provides people with and without insurance with online ordering and delivery of doctor-prescribed medications.
The launch comes at a good time as the COVID-19 pandemic has led shoppers to change their habits from buying medicines at physical pharmacies, where there are risks of infection, to buying them at online pharmacies.
The online pharmacy of Amazon will be available in 45 States this week, not counting Hawaii, Illinois, Kentucky, Louisiana and Minnesota, where the launch will take place later. The online giant says it works with all major insurance firms.
Shares of American pharmacy chains dropped sharply on Monday against the background of news about the emergence of such a large competitor as Amazon. Shares of traditional CVS and Walgreens drug stores fell 8.6 percent and 10.7 percent respectively on the day, while Walmart (WMT) shares also fell 2 percent, as pharmacies were also placed in its largest physical supermarket chain in the United States. Shares of GoodRx, a service that helps consumers find prescription drug discounts, also fell 22.5%.
Shares of Amazon that are up 69.69 percent since the beginning of the year, took a slide of 0.96 percent on Wednesday to conclude at $3,105.46.
Another big plus for customers with a one-year Prime subscription will be the Amazon Pharmacy service, as they will receive free two-day delivery of medications. In January, Prime membership reached 150 million, according to Amazon CEO Jeff Bezos (a number equal to almost half the population of the United States).
Discounts will be given to Amazon Prime members on certain generic medicines, through Amazon’s cooperation with the Inside Rx savings program,.
Also, Prime customers can get a bonus benefit card that they can use at more than 50,000 pharmacies, including CVS, Walgreens, Rite Aid and Walmart. For clients who urgently need medication and cannot wait two days for delivery, according to the company, this can be convenient.
Amazon Pharmacy’s additional advantages include order history and medication data in customer’s account; facility to consult with pharmacists 24/7; and pharmacists from Amazon Pharmacy check orders for the safety of using multiple drugs at the same time.
For five days, consumers who do not have a Prime subscription will get free shipping, or pay $5.99 for delivery for two days.
Amazon also said it will not abandon its PillPack company (acquired in 2018), as this service is intended to deliver medication packages on a 30-day schedule for each day.
T.J. Parker, Amazon’s Vice President of Pharmacy, who previously co-founded PillPack, said that Amazon Pharmacy’s storage and collection of customer health information will comply with Federal HIPAA regulations, and the company will not share pharmacy data without permission with advertisers or marketers.
Amazon.com Inc (AMZN) does not currently have regular pharmacies; Parker said and declined to reveal further plans. Amazon, however, owns a chain of Whole Foods stores and Amazon Fresh stores, to which pharmacies or cells can be added for medicine self-pickup. The Amazon Pharmacy is the company’s biggest move to a market of $300 billion and its competitive advantages threaten the dominance of traditional pharmacies in this market.