Dear Amazon, please stay out of pharmacy
Friday, May 26, 2017
I'm a big fan of Amazon. Their huge selection of new and used books, convenient shopping platform and unbeatable prices make me a regular customer.
But when I read news that the online superstore founded by Jeff Bezos in Seattle in 1994 was looking to get into the mail-order pharmacy market, it made my stomach turn a bit.
Yes, there are plenty of things wrong with our current medication delivery and reimbursement system in the U.S. I fully understand that a smart businessman like Bezos sees an opportunity here.
In an article published in Modern Medicine, Ron Geraty of AxisPoint Health describes him as "patient, disciplined, [and] has demonstrated he can break up current practices. The entire pharmaceutical/PBM/pharmacy system of collusion on pharmacy pricing needs to be disrupted. The implications for all of medicine is significant."
Nevertheless, in my opinion, this is a bad move for Amazon, for patients and for pharmacy in general.
Bad for Amazon
This move is bad for Amazon. I know that a major factor driving Bezos' interest in this market might simply be the vast number of employees Amazon currently has — well over 300,000, according to online sources.
Presumably these employees — at least the full-time employees — are offered benefits that include a prescription plan. By filling their prescriptions elsewhere, they are running hundreds of thousands (likely millions) of dollars of revenue through competitors' pockets every year.
Why shouldn't they wet their beak a bit in that big revenue pool?
But hidden behind those large revenue dollars is the gloomy reality of a low-margin business. Ever since Walmart led the way in 2006 to drop prices to rock bottom with their $4 generic list, pharmacy profits have been on a downward spiral. And the PBM industry has been squeezing every last penny of profit out of community pharmacies for a long time now.
Even if Amazon is comfortable earning 1 percent on their money from expensive drugs, they may be shocked to find out those really expensive specialty drugs won't be able to be filled at their pharmacy, most likely.
Bad for patients
The move may be bad for patients, too. It will even further fracture patient care by splitting up their prescription business between pharmacies, as mail-order can never meet all the needs of most pharmacy patients. Mail order separates patients from face-to-face contact with their local pharmacist and pharmacy team.
And how much, exactly, are patients likely to save using Amazon for their prescriptions?
Unlike virtually everything else Amazon sells, drug copays are not open for discounting. Insured patients will likely pay the same price at Amazon as anywhere else, and Amazon will have to ship these meds for free.
Bad for pharmacy
And finally, the move is bad for the profession of pharmacy. I know this isn't exactly a factor in the minds of the Amazon executive team. But pharmacists and pharmacy leaders should pay attention to what is going on.
A new major player in the mail-order pharmacy arena could cause another significant shift in jobs and career opportunities. As consumers move their medications from local pharmacies to their Amazon account, you can be sure that pharmacy jobs will start disappearing as quickly as you can click your mouse.
You see, it is not just the prescription that gets taken out of the local economy, but the jobs vanish as well.
Amazon is an amazing company, and I've always been impressed with their innovation, simplicity and service. But for the sake of everyone involved — Amazon included — I wish they would stay out of pharmacy.
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