Amazon Launches Amazon Pharmacy, a Prescription Drug Delivery Service

A little over two years after its $753 million acquisition of the prescription medicine delivery service Pillpack, Amazon.com has launched Amazon Pharmacy, an online and mobile prescription medication ordering and fulfillment service. After launching its own line of over-the-counter drugs in 2019, this is arguably Amazon’s broadest push into the healthcare business to-date, one that could open up very large, new revenue opportunities for the company. While Amazon Pharmacy looks to be a U.S.-only launch for now, it’s a global opportunity. Online pharmacy services are projected to hit revenues of $131 billion by 2025 worldwide. Prescription drugs, meanwhile, have been estimated to be a $904 billion industry this year, growing to nearly $1.3 trillion by 2025.

Total Retail's Take: This is an announcement that many industry analysts have been waiting for. Amazon's 2018 acquisition of Pillpack portended that the e-commerce giant had plans to push further into the prescription drug business. And with the COVID-19 pandemic leading more consumers to both remote care and online shopping, the timing is right for Amazon. Prescription drugs and wellness in general is a targeted growth opportunity for Amazon, much like grocery. The retailer is counting on the ease of its customer experience for general merchandise translating to shopping for prescription medication, and is introducing services to help consumers feel comfortable with their buying decisions. For example, users are provided with “self-service help” tools on Amazon’s portal, and they also have the option to speak to pharmacists for advice. While they've been preparing for this development for some time, the clock has started ticking for drug store chains such as CVS, Walgreens, Rite Aid and others. Can they fend off Amazon in the product category, at least to a degree, or will the e-commerce giant conquer another vertical?