Amazon to Enter the Pharmacy Business?

Amazon.com may be entering the multibillion dollar pharmaceutical dispensing business, at least according to a report published by CNBC on Tuesday. According to the article, Amazon has reportedly hired a general manager whose sole role would be to help the online retailer explore how to formulate a strategy around the pharmaceutical market and ultimately lead a team. Reportedly, Amazon is also in deep discussions with industry experts and has started to recruit more broadly from the pharmacy space. The report estimated that if executed well, the pharmacy business could be a $25 billion to $50 billion market opportunity for Amazon. However, the company would also face the challenges around entering a regulated market, including complicated drug prescription transfer laws and e-prescribing rules. Amazon hasn't publicly commented on the news.

Total Retail's Take: The fact that Amazon.com is contemplating entering the pharmacy market isn't that surprising, given that in Japan, Amazon has added drug and cosmetics delivery to its Prime Now options and its site in the country boasts a pharmaceuticals category page. Furthermore, Amazon typically tests new offerings outside the U.S. before launching them domestically. In addition, Amazon had originally backed drugstore.com. For the last few years, Amazon has reportedly held at least one annual meeting at its Seattle headquarters to discuss whether it should enter the pharmacy business. While this move isn't a done deal yet, the news is already moving markets: investors this week sold off shares of pharmacy giant CVS Health and Walgreens amid the renewed speculation that Amazon would start selling prescription drugs.