Amazon Causes A Stir With New Pharmacy Business Launch

by Jonathan Adams
Amazon pharmacy

Ecommerce behemoth Amazon sent shockwaves through the pharmaceuticals sales and supplies markets last week with the launch of its new Amazon Pharmacy business.

The giant retailer’s intention to launch an assault on the prescription drugs business, worth $4 trillion annually in the USA alone, was no secret. It was signposted two years ago by the $750 million acquisition of Pillpack, a start-up that posts prescriptions to patients in the USA. But the official launch announcement of the Amazon-branded business still saw the share price of Walgreens Boots Alliance, which owns British pharmacies chain Boots, fall by almost 10% on Thursday. The share price of CVS Health, the USA’s largest chain of pharmacies, fell by 8.6%.

Amazon, which started as an online bookstore before moving into pretty much every kind of consumer product either as a direct seller or through third-party companies using its platform, has shown increasing aggression in moving into new markets. Its ambitions in online groceries delivery are well known and it already has a functioning business in the sector it is investing heavily in. Prescription drugs are now clearly the next new ‘ecommerce’ sector.

The boom in online shopping over Covid-19 pandemic-themed 2020 has seen Amazon’s value hit $1.6 trillion from $950 billion at the start of the year. It’s capitalising on its popularity with financial markets to expand again.

Prescription drugs ordered online and delivered to the patient is a market with huge potential growth. Currently online orders represent just 20% of the market in the USA and far less in other economies. Amazon Pharmacy will offer free 2-day delivery to Prime subscribers. The new business is also offering customers discounts of up to 80 % for generic drugs and 40% for branded medications when paying without insurance.

There is no official announcement on when Amazon Pharmacy might launch in the UK, but the company has already applied for the trademark under controversial circumstances. Infohealth Laboratories, a small Harrow-based healthcare company, also moved to trademark the same name a month earlier. Rajive Patel, a director of Infohealth, said that the British company had formally opposed Amazon’s later application but had been “bullied out of it” by the U.S. tech group.

Infohealth say they had applied for the Amazon Pharmacy name for an ethical pharmacy business that plans to use ecologically sustainable packaging. The company owns the domain name. Infohealth appointed a trademark attorney to defend its claim but was convinced to back down on advice Amazon would ‘flex its financial muscle’ and any legal battle would cost the small UK company a lot of money.

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