Skip to content

Amazon may disrupt the space of prescription drugs Next

The rumor that Amazon aims to disrupt the pharmaceutical industry has recently gained popularity, only a few months after the company set fire to grocery stores with the acquisition of Whole Foods, and amid its widely publicized search for a second location at the US headquarters.

Amazon reportedly took significant steps to become a distributor and a drug vendor – actions that raised concerns among potential competitors and could have involved much in CVS negotiations to buy the health insurance company Aetna for $ 66 billion.

Amazon obtained licenses to sell drugs as a wholesaler in 12 states, including Nevada, Arizona, Alabama, North Dakota and Louisiana, according to a report in on St. Louis Post-Dispatch .

The E-Commerce Times was able to obtain documents showing that Amazon has licenses to sell drugs wholesale in New Jersey and Connecticut, two other states on the newspaper's list.

If Amazon wanted to start shipping pharmaceuticals directly to consumers, it should also get pharmacy licenses, the report notes.

The new licenses are related to the expansion of the company's healthcare delivery business, which is part of an expanding B2B segment at Amazon, said spokesperson Lori Torgerson.

As part of this activity, Amazon sells professional medical supplies to doctors, dentists, and other health professionals.

"Wholesale licenses are required for Amazon Business to sell products for professional use only to healthcare companies," Torgerson told the E-Commerce Times.

B2B Boom

Amazon announced this summer that its Amazon Business segment, launched in 2015, had reached more than one million customers. The supply business has grown to more than 85,000 commercial sellers, providing professional supplies to a range of health and other business customers.

See also  What's up with Facebook?

Amazon has sales licenses to various health care providers, including hospitals, doctors, dentists and health care clinics, in most states.

The news that CVS Health was in talks to buy out Aetna, the nation's third largest health insurance company, appeared last week in a report Wall Street Journal . The $ 66 billion rumored transaction puts Aetna's stock at $ 200 per share. CVS is not only one of the largest retail pharmacy chains, but also one of the largest pharmacy benefit managers in the United States.

The negotiations, which have been going on for months, have directly involved the leaders of both companies – Larry Merlo, CEO of CVS and Mark Bertonlini, CEO of Aetna – according to multiple reports.

One of the main reasons given for these discussions was the rampant speculation that Amazon has embarked on entering the prescription drug sector following the acquisition of Whole Foods for 13, $ 7 billion, a decision that has shaken the US food industry. ]

CVS officials did not respond to our request to comment on this story.

"We do not comment on rumors or speculations," Aetna spokeswoman T. Crawford told the E-Commerce Times.

Mature for the disturbance

Amazon is likely to disrupt the retail pharmacy as it is a highly competitive market where the majority of profits are taken not on the drugs themselves, but on the household products, supplements, grocery store and other purchases.

"With Amazon's focus on customer comfort and automatic orders / orders, it's a logical next step for the company," Cindy said. Zhou, Senior Analyst at Constellation Research.

See also  AI-based client data platform supports ABM operations

"Bulk orders for regular prescriptions have been offered by insurance companies for decades, but Amazon can deliver them to the end customer conveniently," she told the E-Commerce Times.

Rearranging prescription drugs easily could be accomplished using Alexa voice commands or Amazon Dash buttons, suggested Zhou.

"I think the logical reason for Amazon would be that when consumers go to pharmacies, they have to walk back and forth to take their medications," said Paula Rosenblum, associate Director at RSR Research.

"This is so that chain stores are generating real profits: they have much larger margins on the products that they pick up when returning or leaving," she said. at the E-Commerce Times. "So I guess that's another way for them to increase their share of the wallet."

David Jones is a freelance writer based in Essex County, New Jersey. He wrote for Reuters, Bloomberg, New York Crain Affairs and The New York Times .