Amazon has been slowly expanding into the pharmaceutical industry, which could mean many things for the industry. Currently the industry is worth 412 billion dollars annually and this could change the way we look at medicine, imagine if you could just be shipped your prescription, if you didn't have to leave your house. It would effectively eliminate Walgreens, CVS, Rite-Aid, etc.. from the market of pharmaceuticals. The biggest challenges facing Amazon are Government regulation and Health Insurance. In many states prescriptions are heavily regulated, so shipping around the country could be very difficult with different regulations in each state, it could easily drive production prices way up. Then the issues with healthcare is that many people pay for prescriptions via health insurance, the entire Amazon model is based around consumers paying for ti whole, upfront. How does Amazon combat these issues? Do you think that Amazon could drive prices down or have little to no affect?
https://www.wsj.com/articles/amazons-push-into-pharmacy-business-is-full-of-promise-and-pitfalls-1509188400
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ReplyDeleteUnless Amazon can create even faster shipping methods than pharmacies, they will struggle with this idea. Because with pharmacies even though you have to drive there; you get your prescription that day. The only way amazon would be successful if they changed the pharmaceutical industry as a whole and started suppling directly to hospitals and doctors offices, thus cutting out pharmacies. This would only be effective if they pass all of the state regulations.
ReplyDeleteI can't imagine if I can get my prescription as long as I go the amazon.com to describe my illness condition. It is such a novel thing. However, as Camille saying that: unless Amazon can create even faster shipping methods than pharmacies, they will struggle with this idea. Meanwhile, different states have different laws. It is really a practical problem. But who knows what will happen. Maybe the new things will stimulate people's consumption in a short time. Market and time will tell us if Amazon's innovation is good or not.
ReplyDeleteAside from the convenience of in home delivery, I agree with the comments above in that Amazon's 2-day Prime shipping cant possibly top the day-of-pickup method of current pharmaceutical pickup. However, if Amazon creates system to simply act between local pharmacies and recipients on a quicker timeline than the two-day Prime method, they could win. If Amazon can figure this obstacle out, they very well could take over this industry just like they have the department store industry and more recently the food industry with the acquisition of Whole Foods and doorstep food delivery.
ReplyDeleteI agree that same day pick-up will definitely help pharmacies to stay in business, however it can be argued that there is still room for Amazon in this market. While some prescriptions need to be filled during the same day, like for antibiotics, other prescriptions that need constant refilling might be easier to get delivered to your house. If you have a standard and set prescription that you simply need refilled every so often, it is reasonable that a standing order with Amazon might be the simpler route, which could significantly affect long term profits of pharmacies.
ReplyDeleteWhile Amazon has dominated many markets it has recently gotten involved in, this surely seems that it will cause the greatest roadblock yet. As mentioned above, Pharmacies are able to deliver most prescriptions in a couple hours. The most available current shipping method Amazon offers is a two-day shipping, free available to prime members. While they are testing one and two hour drone delivery, it will be quite some time until that will be up and running nationwide. While Amazon perfects this new method of shipping, they will also have other loopholes to jump through, such as pharmacy licensing, and contractual agreements to be made with the pharmaceutical industry.
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