When Amazon acquired the online pharmacy PillPack in 2018, the move allowed the retail giant to operate as a pharmacy in almost every state. In November, the vision behind the acquisition was finally realized, with the announcement that customers could now purchase their prescription medications through Amazon Pharmacy, a new store on Amazon.com. 

Key Takeaways

  • Amazon has launched a new store, Amazon Pharmacy, where customers can purchase their prescription medications with or without insurance.
  • Amazon Prime members will receive discounts of up to 80% on generic drugs and 40% on brand-name drugs, if they forgo using insurance.
  • Prime members will also get free two-day delivery.

How Amazon Pharmacy Works

Amazon is no stranger to disruption, and it’s expanded its empire considerably in recent years with smart devices, grocery delivery, and other offerings. Amazon Pharmacy is the latest venture into new territory for the e-commerce behemoth, and it’s been a couple of years in the making.

Now, Amazon shoppers can order their prescription drugs through Amazon.com, along with anything else they purchase on the website. They start by requesting that their physician send their prescriptions to Amazon Pharmacy instead of the pharmacy they’ve used in the past.

Once that’s happened, the patient can log into the website and enter the last four digits of their Social Security number to pull up their insurance information. Then they’ll be able to view the prices for their prescription with and without insurance.

For many, paying without insurance is generally more expensive. But Amazon Prime members can take advantage of discounts of up to 80% on generic drugs and 40% on brand-name drugs if they choose self-pay instead of involving their insurance plan.

Once the process is completed, the patient will pay, and the prescription will be shipped. And yes, for Amazon Prime members, that’ll be two-day free shipping.

What Kind of Impact Will Amazon Pharmacy Have?

As of right now, Amazon Pharmacy likely won’t have a major impact on other big chain pharmacies like CVS and Walgreens. 

Both of those companies have anticipated more online competition and already provide free shipping and discount services—essentially the same thing Amazon Pharmacy is offering, though without the convenience of buying your prescription along with, say, a new kitchen knife set or the latest bestseller.

One company that could suffer is GoodRx, which offers discounts to patients with poor or no insurance coverage, but without the retail convenience Amazon provides. The day Amazon Pharmacy launched, GoodRx’s stock price dropped 22.5%. 

Unless Amazon takes more steps to disrupt the online pharmacy industry—for example, by offering even faster shipping through its free two-hour delivery service Prime Now—it won’t make too many waves.

At the moment, Amazon appears to be testing the waters and gathering information before making further moves in the U.S. healthcare system. However, if it can build a sizable market share and start competing with pharmacy benefit managers, which work on behalf of insurers and negotiate prices with drug manufacturers, it might gain enough leverage to help lower drug costs.